India has targeted NetZero by 2070. Between different stakeholders, mass action programmes are underway, such as the National Green Hydrogen Mission, renewable energy expansion, FAME scheme for EV’s, the Pradhan Mantri Surya Ghar Yojana (PMSGY), and the National Hydrogen Mission. Especially green hydrogen and green ammonia projects significant to large, hard-to-abate sectors like industrials, heavy road transport, shipping, aviation, increasing the country’s global competitiveness as India is a powerhouse supplier to the world. But most of the initiatives are supply and top-driven.
“Right now, we are at the initial project stage that kickstarts the virtuous cycle that enables penetration of the mass market,” says Bakul Pant, chief commercial officer, OCIOR Energy, a green hydrogen and green ammonia producer and supplier.
We need better measures to see results, says Vibhuti Garg, director South Asia, Institute for Energy Economics and Financial Analysis (IEEFA). “Except the NITI Aayog analysis that is underway, there are no scientific measures of various technologies needed in different sectors to achieve Net Zero. A comprehensive analysis is needed to draw a sector roadmap,” she adds.
“All the initiatives need be backed by technology so that the electricity that is produced is reliable. And it must be produced at a cost that is commercially viable,” says Pinaki Bhattacharyya, CEO, MD, AMPIN energy, a renewable energy (RE) transition.
India’s climate risk is beyond survivability limits. Yet, India is also among the few countries that have its national climate goals on track, the World Economic Forum (WEF) reports. With half of the energy consumption and emission of greenhouse gasses contributed by the corporate and industrial sector, about 200 companies in India have committed to a focused decarbonisation through a planned approach on production and operation optimisation, resource use, supply chain engagement, and employee training. These businesses are already acting to curb their emissions in line with science, says Tracy Wyman, chief impact officer, Science-based Target Initiatives (SBTi), a global corporate climate action organisation. “Between 2022 and 2023 alone, there was a 520% increase in the number of GHG-emissions reduction targets set by companies in India. Since as many companies in India are part of the value chains of large companies headquartered elsewhere, growth in India can have a powerful effect on scope 3 emissions of companies all over the world,” she reasons out the impact.
In addition to emission control and energy efficiency, Pant points out the pragmatic corporate actions that are underway in the ammonia industry. “The substitution of the raw material (Natural Gas) with green hydrogen creates a larger impact towards Net Zero vis-à-vis substitution of grey power with RE. Multiple grey ammonia producers in India, in collaboration with SECI, the governmental intermediary, have sought proposals from developers to supply green ammonia to their facilities,” he tells us.
Bhattacharyya shares some going-green endeavours. “Some big organisations buy the International Renewable Energy Certificates (IRECs), some commit to buy the power long-term from the plant or support the specific power price in the energy exchange if it is quoted there. If the organisation already has rooftops, RE from the grid and Interstate RE power, they buy Virtual Power Purchase Agreements (VPPAs), where the organisation gets environmental attributes in place of electricity,” he explains.
To drive more green investment from corporates and to attract investor interest, carbon emission trading and green attributes trading are the best ways. With respect to Green hydrogen and Ammonia, “The Carbon Finance solutions model allows the electronic global trading while the physical molecule can be sold locally,” says Pant.
Backed by economies of scale, India’s utility sector growth is pegged at 50 GW a year and the C and I sector is 15 GW a year. Debt financing is big in India with a thriving stock market, bond market and infrastructure investors trust funds. Still, other than solar PVs, wind and bioenergy, both public and private capital is needed to boost investments for other types of RE and for long-term development, says Garg, “We need participation from MDBs, institutional investors and philanthropic money.” On the market front, she says, “Establishing Time of Day Pricing, virtual power plants and future market to improve demand for RE and carbon markets and green public procurement can be adopted to drive demand for adoption in various sectors.” Whereas in terms of policy, it is crucial to improve the financial health and performance of DISCOMs. "While stipulating stricter governance framework and regulatory compliance, cost-reflective tariffs, reduction in cross subsidy charges, rationalisations and provision of subsidies to targeted consumers will work in favour, adoption of smart grid technology and digitalisation and weather forecasting, AI and machine learning can strengthen it further,” she insists.
In addition to further cost reduction and availability of low-cost financing options for RE, “Relaxing the import mandates on utilities such as ALMM on solar modules will help Indian manufacturers to thrive,” says Bhattacharyya.
And finally to expedite action for net-zero, says Wyman, "Increasing data and disclosure, decarbonizing high-emitting industries such as steel and cement, and unlocking green finance will help leading the national economy to decarbonise further and faster.”
