The latest World Energy Outlook details the altering of global energy systems, falling costs of clean energy and the encouraging role of developing economies like India

The advent of renewable power is changing energy systems worldwide (Photo by Erich Westendarp)

Over the past decade, there has been a noticeable change in the energy scenario across the globe, and developing countries like India are leading the charge. An increasing emphasis on clean energy to combat the threats of climate change and warming has led to the large-scale use of renewables and sustainable technologies.

This has now been corroborated by a report by the International Energy Agency (IEA). “Four large-scale shifts in the global energy system set the scene for the World Energy Outlook 2017: the rapid deployment and falling costs of clean energy technologies, the growing electrification of energy, the shift to a more services-oriented economy and a cleaner energy mix in China, and the resilience of shale gas and tight oil in the US,” says the World Energy Outlook (WEO) 2017, released earlier this month. “These shifts come at a time when traditional distinctions between energy producers and consumers are being blurred and a new group of major developing countries, led by India, moves towards centrestage.”

“It is true and evident that there is rapid deployment of clean energy technologies and cost becoming competitive owing to high efficiency turbines with a lower levellized cost of energy,” D.V. Giri, Secretary General of the Indian Wind Turbine Manufacturers Association (IWTMA), told indiaclimatedialogue.net. “The very fact that the government has set a target of 60 GW from wind by 2022 (which may be scaled up to 80 GW), is sufficient demonstration of this. As far as wind energy is concerned, India and China will continue to be prime markets for onshore and offshore will lend itself to even larger turbines.”

Concurring, a source in the renewables energy (RE) industry explained that since India has been emerging as a major economy along with China, this carries a direct correlation to its energy demand. “Consequently, India’s energy demand is set to grow at over 4% annually in the next decade, faster than all major economies. This, after India is already the third highest consumer of oil, after US and China.”

These changes are opening up new opportunities for affordable, sustainable access to modern energy, reshaping the response to the pressing environmental challenges and demanding a reappraisal of our approach to energy security, according to Tim Gould, Head of Supply Division, World Energy Outlook.

India is central to many of these changes, and affected by all of them, so the context for considering its energy development is fundamentally different from a few years ago, he said. “The other change is in global energy governance,” Gould told indiaclimatedialogue.net. “India is moving to centrestage in global energy affairs, and its new status since 2017 as an Associate Member of the IEA is very much part of this process.”

Renewables to meet growing demand

“In the central scenario of WEO (called the New Policies Scenario), global energy needs are projected to rise more slowly than in the past, but they still expand by one-third between today and 2040,” Gould said. “The largest contribution to demand growth — almost 30% — comes from India, whose share of global energy use rises to 11% by 2040 (still well below its 18% share in the anticipated global population).”

Giri explains that the per capita energy consumption is expected to go up by leaps and bounds not only by the industry, but also the domestic sector with higher living standards. The government has announced electrification of all villages ahead of the target of May 10, 2018. RE, more so wind, will play a great role as a non-polluting power source, he said. However, thermal power has to be used for peak loads, while hydropower, gas and other forms of storage will have to be used as balancing loads, Giri pointed out.

The potential of around 302 GW onshore and a good potential of offshore wind power is promising to meet the demand. Moreover, the manufacture of high efficiency turbines means that technology is not an issue. Connectivity across the country and uniform policies, especially on land acquisition, to treat wind as a national resource is the key to further enhancing efficiency of the wind sector, Giri told indiaclimatedialogue.net.

Systems change

The way that the world meets its growing energy needs is starting to change, Gould said. Over the past 25 years, the main roles were taken by coal and oil, but the lead in the future is projected to come from natural gas and, especially from renewables.

Change in primary energy demand (Source: IEA)

“We shouldn’t think only about the supply side. Improvements in efficiency also play a huge role, and without them, the projected rise in final energy use would more than double,” he said. “How fast we are able to increase our deployment of clean and more efficient energy technologies will determine our success in limiting climate change and improving air quality.”

In the New Policies Scenario of the IEA report, renewables capture two-thirds of global investment in power plants, as they become the least-cost source of new generation for many countries. Rapid deployment of solar photovoltaics, led by China and India, helps solar become the largest source of low-carbon capacity by 2040, by which time the share of all renewables in total power generation reaches 40%, the report said.

Rise of solar

As per the report, the rapid deployment of solar photovoltaics (PV), led by China and India, is helping it to become the largest source of low-carbon capacity. Gould avers that there is a positive feedback loop between deployment and costs that has been critical to the rise of solar PV. The policy-driven deployment that has been led by China and India in recent years has allowed costs to come down sharply, and this has enabled a whole range of countries to ramp up their policy goals and implementation measures.

India’s solar ambitions, expressed also in its leadership in the International Solar Alliance, have been very important to this process, not just the headline targets for 2022 but also the progress that is being made on the ground with policy support and specific investments. There are challenges that remain, including the financial restructuring in the distribution sector, the need for continued investment in the network, and the drive to give the power system the flexibility that it will need in its operations, the report said.

India’s goal is to generate 100 GW through solar power by 2022. It now has an installed capacity of 20.1 GW of solar power.

The role of electric vehicles is also important. India has an aspirational goal to change the nation’s transport fleet to EV by 2030. The eco-friendly and cheaper operation cost for EVs can help control air pollution and out-of-pocket costs for increasingly expensive petrol and diesel variants, but this benefit is off-set by the high cost of production due to R&D costs and related infrastructure like charging stations, batteries, etc.

How fast the EV fleet grows will depend on the interplay between supportive policies and cost reductions, and how quickly this produces vehicles that consumers find affordable and are ready to buy at scale, according to Gould. In India, as elsewhere, this will also depend on how rapidly the recharging infrastructure is built. So there’s a lot of uncertainty over policies and technology, but this is undoubtedly going to be a growth area, he said.

The rise of electric vehicles (Source: IEA)

Giri says it is too early to comment on the role of EVs in India. “There is evidence of technology in the country and as in many industries, the technology for EVs can also be got from other countries. Vehicle pollution has to be arrested and CNG is not the long lasting answer,” he told indiaclimatedialogue.net. “The transition from conventional fuels to EV may take time, though the ambitious plans of the country for electrical vehicles by 2030 still remain.”

End of coal?

Experts says that greater efficiency from R&D, both in terms of solar cell efficiencies and wind turbine technology, will ensure that the economics are always more lucrative with the passage of time.

“The consumption of coal — after seeing rapid growth since 2000 — is already essentially flattening out, while RE continues to grow rapidly in the future,” Gould said. “So, the explosive growth of renewables in the power sector is marking the end of the boom years for coal. The momentum, both globally and in India, is shifting towards cleaner energy and this will need to continue and accelerate if the world is to reach its climate and air quality goals.”

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