SDG 5: Gender Equality

Affordable and Clean Energy

Introduction

Energy is pivotal to almost every major challenge and opportunity the world faces today. Access to energy is essential for agriculture, corporates, fishery, aviation, and many other industries, which are vital for the everyday survival of the human species. However, now, the focus should not only be limited to energy; instead, it should shift to "clean" energy.

Clean energy is the energy derived from renewable, zero-emissions sources as well as energy saved through energy efficiency (EE) measures as defined by NCSEA (NC Sustainable Energy Association, 2019).

Currently, 1 in 7 people lack electricity coverage (UNDP, 2019), and most of them live in the rural areas of developing countries, particularly in Sub-Saharan Africa. Even today, around 40% of the world population relies on "polluting" and unhealthy fuels for cooking, thus getting exposed to dangerous levels of air pollution, which has far-reaching consequences in causing various respiratory diseases (SDG Academy, 2019).

In the past decade, some progress regarding the use of renewable electricity from water, solar, and wind power has been made, and the ratio of energy used per unit of GDP has also declined. As of 2015, more than 20% of power was generated through renewable resources. However, there is still a long way to go.

To ensure universal access to affordable electricity by 2030, extensive investments in clean energy sources such as solar, wind, and thermal need to be made. Also, adopting cost-effective standards for a broader range of technologies would help in reducing the global electricity consumption by industries and buildings by 14 percent, thus eliminating the need for roughly 1,300 mid-size power plants (Sustainable Development Goals Fund, 2019).

In order to create sustainable and inclusive communities having resilience towards climate change and other environmental issues, an increase in the use of clean energy through increased use of renewable energy and increased energy efficiencies are essential. Striving towards achieving affordable and clean energy goals is particularly relevant as other sustainable development goals are also dependent on it.

Relevance of SDG to India 

India, being the first country to establish a dedicated ministry for renewable energy resources, has always had a pro-clean energy stance. This is proved by the installation of a net 40,922 MW of renewable energy by the Indian Government in the past five years(MNRE, 2019). India, after the 2015 Paris summit by UNFCCC, has committed to reach a target of producing 40% of its total electricity generation from renewable energy resources by the year 2030(MNRE, 2015). According to the 2027 blueprint, India aims to have 275 GW from renewable energy, 72 GW of hydroelectricity, 15 GW of nuclear energy, and nearly 100 GW from “other zero emission” sources. To further promote the growth of clean energy, the Indian Government has introduced tax rebates, nominal interest rates, and amplitude of other incentives to enable a large scale adoption of renewable energy. India has been especially proactive in the domain of Solar Energy. India is a founding member of the International Solar Alliance, whose primary objective is to promote the development of solar energy in 120 identified sunshine countries.

Along with that, it houses some of the largest solar parks in the world, which includes the Bhadla Solar Park in Rajasthan and Kurnool Solar Park in Andhra Pradesh with a capacity of 2255 MW and 1000 MW respectively (Solar RPO Targets, MNRE, 2019). India’s total electricity generation in 2019 includes 35.7% of renewable energy along with 2% from nuclear power and 8% from small hydro and other sources, which accounts for approximately 366 GW (MNRE, 2019). The growth of demand in energy required by the country can be a significant factor in promoting the development of clean energy in India, which can, in turn, boost our economies.

However, the adoption of Renewable Energy in India and energy independence from conventional energy sources is hindered by two major factors: distribution network and development of advanced storage technology. To tackle this problem it is imperative that the government looks at the entire value chain of distribution and storage through a sustainable lens. This must be accompanied by increasing awareness about how to leverage the benefits of clean energy across various parts of society.

Business Implications & Responses

The middle-class population is expected to rise in numbers by 53% over the next decade. This is going to increase the demand for energy substantially and increase the stress on the already inadequate natural resources. We, as a society, must ensure access to affordable and reliable power and at the same time, enhance the share of renewable energy globally. A coordinated effort to provide universal affordable and clean energy could prompt massive disruption along multiple verticals in every business. Significant market reforms in the energy sector, robust energy efficiency standards, the more extensive use of carbon pricing, and the rapid integration of the multiple sectors are all likely. Various governments and private players around the world have taken multiple initiatives to promote cleaner energy. Even Greenpeace under-estimated the rise of solar, expected 335,000 MW in installed capacity (US) by 2020, but we already had 486,000 MW by 2018!

M-KOPA, a solar energy company in Kenya, provides pay-as-you-go solar power that addresses the tremendous demand for affordable off-grid energy. It connects over 3,40,000 houses in Kenya, Uganda, and Tanzania to affordable electricity. M-KOPA's initiatives helped 99% of the households save money on kerosene. Also, it enabled the society to leap from using non-renewable energy to sustainable practices which in turn helped in reducing carbon dioxide emissions.

40% of the global population living without proper access to clean-cooking solutions offers massive potential to make progress in integrating clean energy solutions into our daily life. Private businesses with support from the government can come up with innovative ideas to completely transform the lives of individuals.

The Indian government has set ambitious targets, an aggressive goal of 175 GW of renewable energy resources by 2022 as part of its Paris Agreement commitments. These include the introduction of 100 GW of solar power and 60 GW of wind power. Government plans to set a capacity of 500 GW for renewable energy by 2030. In India, 60 solar cities will be built as part of the Solar Cities initiative of the Ministry of New and Renewable Energy.

India has significantly low traditional energy resources compared to its vast population and fast-growing economy's energy needs. Nonetheless, India, as it enjoys sunlight most of the year, is just starting to tap the huge potential of solar energy, just like the hydroelectric sector that is being explored in the country's north-eastern states. India installed a total of 80.46 GW of renewable energy potential as of June 2019, including 29.55 GW of solar and 36.37 GW of wind power. India is expected to exceed the targets of the Paris Agreement. It is anticipated that renewable sources would help meet 40% of India's power needs by 2030. This has introduced competition into the industry, particularly in the solar energy segment, in which tariffs in December 2017 reached a record low of Rs 2.43 (US$ 0.037) per unit and the same level was again reached in September 2018. Similar to the smaller contractors, the broadly distributed companies are in a better position with higher returns. India's wind tariff also dropped to a historic low of Rs 2.64 per unit (US$ 0.04).

Clean energy costs may be falling rapidly; however there are still a lot of areas where a strategic government policy support is required to scale the clean energy deployment. The government help could be in the form of subsidized cleaner stoves, renewable energy contracts, or trials for ocean energy technologies. In the shorter run, such changes might result in an increase in taxes, higher carbon prices, and more expensive energy for organizations which have a larger carbon footprint.

Disparate strategies have been adopted, worth noting for upcoming companies in the industry. Suzlon, a vertically integrated company, and a key player in the wind power segment, has all the wind turbines built and installed together with the servicing. It has service centers around the world. Adani Power also aims to become a fully integrated producer of solar photovoltaics. We can thus see fully integrated game returns outweigh those of contractors in manufacturing, production and construction (EPC).

Finally, it is no overstatement that the business opportunities arising from meeting clean energy demands could add up to trillions of dollars. According to the International Energy Agency, executing the national pledges under the Paris Agreement would require $13.5 trillion investment in cleaner energy alternatives and R&D to achieve lower costs and energy efficiency between 2015 and 2030.

Analysis & Suggested path ahead 

In India, some major steps need to be taken towards energy security. An attractive, as well as stable policy, is necessary to ensure private and foreign investment to increase capacity for renewable energy. Investments in foreign assets, especially for natural gas and uranium, need to be stepped up. Adequate substitution strategies also need to be created keeping in mind that the demand for energy is much higher than supply in India. To address this it is also necessary to create sustainable solutions that keep in mind long term issues such as climate change. Thus it is also important to assess the environmental impact of any such solution.

Important issues that are of concern include the creation of transmission infrastructure to transport renewable power as well as making sustainable business models for projects regarding renewable energy. Issues regarding the adoption and transfer of new technologies need to be addressed. Clean energy options have the potential to mitigate the gap between the demand and supply of energy, however, there are major socio-environmental issues that are faced in this regard such as flooding, construction of dams, resettlement of the affected persons as well as damage to the surrounding ecosystem. Thus work needs to be done in developing more holistic and balanced models.

Currently, in the Indian Government, responsibility for energy-related policies is divided between five different ministries and several other commissions and agencies. The State and Central Government sharing responsibility adds to the complications. Thus it is extremely important to achieve a synergy between these various agencies to create a substantial and lasting change.

Another important factor to consider is how cities will play a role in the transition to clean energy. Urbanization inevitably will lead to an increase in energy consumption in cities - not only due to commercial and industrial activities but also growth in income and changes in demographics, especially in the developing economy of India.

However, India’s structure of governance does not explicitly allow administration at the city level to take decisions on energy-related issues such as electricity production and distribution, fuel use policies, and prices of energy/electricity. Cities can only, to some extent, control the flow of energy. They lack jurisdictional powers to decide its form. They also have to conform with decisions taken at the state level and have no control over contextualizing its structure, scope or implementation.

Thus, when it comes to the energy sector, cities in India are not significant decision-makers. However, in the closely related issue of climate change, they are essential in the implementation of Intended National Determined Contributions (INDCs). In effect, they are the most important sites where targets within Goal 7 of the SDG would be achieved. Hence, it may be a viable prospect to revisit the 74th Constitutional Amendment of India and empower the city government with greater decision power regarding electricity generation and distribution. To attain a desirable climate-energy transition, this may be vital.

In the private sector, with proactive support from the Government, as well as an increasing concern amongst the people, there is a visible switch towards cleaner energy alternatives. Companies are taking a pro-stance at implementing cleaner methods of energy consumption. The focus of meeting sustainable goals of 100 GW of solar power and 60 GW of wind power by 2022 in India has brought the companies and citizens alike to take a step towards giving back to society.

MNC giants like HUL, Amazon, P&G and a lot more have ensured that they take accommodative measures to follow a sustainable life cycle of the product. HUL has already switched to 100% renewable electricity across 5 continents. They are working towards the goal of being “Carbon Positive” by 2030, by eliminating the use of hydrocarbon fuels in their operations and contributing towards generation of cleaner energy way more than their consumption, which will further be used to help organizations and markets involved in their operations. Amazon is playing its part by establishing 66 wind and solar energy projects across the world to help generate about 3.9 million MWh of annual clean energy. P&G, on the other hand, is focusing on purchasing 100% renewable clean energy for all their consumptions and operating, thus substantially reducing carbon emissions.

As responsible citizens, it is of utmost importance that we prioritize in providing a safe environment and living space with access to all basic resources and amenities for our future generations. Research and development in new cleaner alternatives will help us explore new dimensions of generating energy and not disrupting the environment at the same time. Clean Energy will help reduce carbon emissions, pollution and toxic gas levels in the atmosphere, and decrease radioactive and harmful chemical release, and thus leave Earth as a habitable planet for the coming generations at the end of the day.

References:

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Sustainability Reports:

1. Amazon sustainability report (2018)
2. HUL sustainability report (2018)
3. P&G sustainability report (2017)

Authors: Anushree Ghosh (B19126); Apoorva Rastogi (B19127); Gayathri S (B19137); Reshmi Sriram (B19157); Shekhar Singh (B19167); Utkarsh Jain (B19177).