SUBJECT :Climate Change 

Like everybody else in the energy business, Anil Gupta had followed the negotiations for the climate change deal in Paris closely. His firm Smart Buildings was formed in Bengaluru three years ago, as the more enlightened IT companies in the city had set about improving their energy efficiency. Now that India has made some moral commitments on tackling climate change, one of which is to make the country's GDP more emission-efficient, Gupta expects a large increase in awareness and hence, business.

The concept of energy efficiency does not need to be sold vigorously to the multinationals and the export-oriented companies, but many conventional businesses are still reluctant to invest on saving energy. Companies like Smart Buildings, whose business is to improve energy efficiency in buildings, now expect a countrywide drive to improve energy efficiency in all sectors. "India can now leapfrog if it adopts global standards in energy efficiency everywhere," says Gupta.

The Easy Part

Among the three key moral commitments India has made at Paris (not legally-binding yet), improving the emissions-intensity of its GDP is the easiest to achieve. The country had committed to reducing its emissions intensity by 33-35 per cent by 2030, compared with 2005 levels. Since it seems to have achieved about 12-15 per cent efficiency improvements in the last decade, India is on target to easily achieve its target and could even exceed it.

The private sector accounts for more than half of the electricity consumption in India. Commercial buildings account for only 9 per cent of the total power consumption in the country. However, the commercial sector is growing fast, and efficiency improvements here can make a big difference to the country's future power consumption and hence total emissions. Since most of the big projects in the country are yet to come, energy experts see it also an opportunity to move to cutting-edge technology quickly.

So far, the energy efficiency movement in the private sector has had little to do with government regulations. According to the non-profit Carbon Disclosure Project, more and more Indian companies are now reporting their energy productivity data voluntarily. Data in the last three years show that the reporting companies are making improvements in energy efficiency. "The total carbon emission of companies may go up due to expansion," says Damandeep Singh, director of CDP India. "But our impression is that the carbon intensity of the top companies has been coming down."

Reducing energy efficiency is not related to investments in renewables. India's emissions intensity targets, however, are closely related to the proportion of renewable energy in the country's energy mix. If India succeeds in its proposed plan to create 175 gigawatts of renewable energy by 2022, it will meet its emissions intensity target even in the absence of significant efficiency improvements. Combined with efficiency improvements, an aggressive renewable energy push can reduce the emission intensity of GDP far more than 35 per cent, say experts. But achieving its promise of 175 gigawatts of renewable energy by 2022 seems tough now.

Of the 175 gigawatts of renewable energy that India plans to create, 100 gigawatts is just solar energy. Compare this with the world's current solar capacity of about 200 gigawatts. India's current capacity is just 5 gigawatts, according to the consulting firm Bridge to India, but rapidly growing. India has to create 60 gigawatts of wind power while the current capacity is about 25 gigawatts. Paradoxically, despite the current problems in wind power in India, experts say that wind power targets are far easier to achieve than solar targets. India's electricity consumption starts rising when the sun begins to go down, and so a high proportion of solar energy will affect grid stability. Wind, on the other hand, does not go down completely at any point. In many places, it blows harder at night and early mornings, when solar power is either absent or present in negligible amounts. So wind power is considered a perfect balance to large solar plants. India's wind power potential has been revised of late from 48 gigawatts to above 1000 gigawatts, as the assessments of potential have now been done at a higher altitude.

Source: December 22, 2015, The Economic Times