Author: Kent Moors, Ph.D.
As the Biden Administration ramps up an American reentry into the Paris Climate Accord, it remains politically problematic in the US. Elsewhere, the 2015 agreement is a quite different story.
Take India as a good example.
Despite combatting a debilitating rise in COVID infections, the government there has announced it will exceed the goals set in Paris by 50 percent and three years ahead of schedule. The new initiative will also eliminate the need for any new coal-fired power plants in the country.
The ambitious plan was unveiled in late 2017 and has attracted some major outside investment. The ten-year energy draft strategy (it can be read in its entirety here: http://www.cea.nic.in/reports/committee/nep/nep_dec.pdf) commits India to have 57 percent of its total power generation coming from non-fossil fuel sources by 2027. In contrast, the Pairs targets are 40 percent by 2030.
The Indian commitment is important in another political respect. Much of the Western in general, and American in particular, opposition to the Paris Accord centers about the well-established argument against international climate agreements as a whole. This position says all the climate “breakthroughs” since the 1997 Kyoto Protocol have allowed developing countries to continue emissions while Europe and North America are obliged to cut theirs.
The Kyoto Protocol extended the commitments made in the 1992 United Nations Framework Convention on Climate Change to reduce greenhouse gas emissions.
India will overtake China as the largest energy consumer, probably before the end of this decade (if not sooner). What happens there in the energy mix will have importance well beyond its own borders. That begins with its own distribution of investment.
By declaring there will be no new coal-fired power stations likely until at least 2027, India’s plan raises further questions about its mining investments in other countries. Heading the list is the major Carmichael mining project by Indian energy company Adani Queensland. Carmichael is the largest new coal mine to be built in Australia.
One of the often-overlooked limitations of any national commitment to renewable sources such as solar and wind power is the fact that the move will still require backup generating capacity. That is necessary because these are intermittent energy sources. The sun does not always shine and the wind does not always blow.
Advances in battery and storage technology/capacity have improved the picture somewhat but regular and predictable economic performance requires availability of electricity on demand.
This has been an ongoing problem in India where is it still the norm that rolling blackouts and brownouts continue to hamper commerce. COVID has simply made the problem worse. Even in developed areas, plant floors are still idle for several hours a day because power is not available. The push for electric vehicles (EVs) has placed further pressure on the national distribution of power.
All of this means that the door remains open somewhat for the continued use of fossil fuels. It is also a major limitation on exceeding, or even reaching, the government’s 57 percent goal of power generated from non-fossil fuel sources by 2027.
Additionally, options remain limited in any move to integrate energy sources into what is an increasingly aging national grid worsened by an insufficient number of generation sites.
Nonetheless, the Indian plan remains one of the most ambitious worldwide. According to the plan, by 2027, New Delhi expects 275 gigawatts (GW) of total renewable energy, in addition to 72GW of hydro energy and 15GW of nuclear. Nearly 100GW would come from “other zero emission” sources, with advancements in energy efficiency expected to reduce the need for capacity increases by 40GW over 10 years.
While not explicitly mentioned in the ten-year plan, analysts have estimated that about 50GW of coal power projects being developed in India would be “largely stranded,” The plan does seem to indicate that none of the plants would be needed before 2023 and possibly not until 2027, if even then.
The overall price tag for the ambitious renewable project is put at more than $1 trillion. This is not coming from state sector investment. That means there is a huge capital infusion needed from the Indian and foreign private sectors.
Some of that has already arrived, providing interesting pairings between Indian and outside sources. Softbank (Japan) has committed to invest $20 billion in the Indian solar energy sector, along with Taiwanese company Foxconn and Indian business group Bharti Enterprises.
Several years ago, the largely French state-owned energy company EDF said it would invest $2 billion in Indian renewable energy projects, citing the country’s enormous projected demand and the “fantastic” potential of its wind and solar ventures.
Meanwhile, local Adani opened the world’s largest solar plant in Tamil Nadu back in 2016, and in late 2017 the energy conglomerate Tata announced that it would aim to generate up to 40 percent of its power from renewable sources by 2025.
There is now additional interest developing. The United Arab Emirates, the location for some of the largest solar power commitments worldwide, announced that an official delegation has discussed investment in the Indian plan. According to Piyush Goyal, Indian Minister of State with Independent Charge for Power, Coal, New and Renewable Energy, the delegation included His Highness Shaikh Mohammad Bin Zayed Al Nahyan, the Abu Dhabi Crown Prince, and the deputy commander of the UAE Armed Forces.
The UAE interest both in solar power and foreign investment opportunities in renewables was a matter I discussed during my last meetings in Abu Dhabi and Dubai. There is considerable upside here.
That interest is manifest in a piece appearing recently in the Gulf News. According to their source – identified as a “senior UAE official”:
“India has a $1 trillion investment opportunity in the energy sector, which will see 40 percent of renewables in the energy mix by 2030 as part of India’s commitment to [the] Paris agreement. We expect investment and technology from the UAE for this transformation…” This will need $250 billion in renewable investments by 2023 [the source added].
A regional move into the Indian plan is afoot. Countries such as the UAE view this as an opportunity to develop their own local renewable energy technology while tapping a huge potential expansion in foreign markets. Already, I hear discussion of the opportunities provided for rising exports of technology and support.
The Indian plan is going to be an approach having wider visibility on the international energy sector’s radar moving forward.
Dr. Kent Moors
This is an installment of Classified Intelligence Brief, your guide to what’s really happening behind the headlines… and how to profit from it. Dr. Kent Moors served the United States for 30 years as one of the most highly decorated intelligence operatives alive today (including THREE Presidential commendations).
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