On the freeway to net zero

India, like the rest of the world, is not yet visibly on the freeway to net zero. Greta Thunberg and others of her persuasion believe this is because young people—future victims of climate change—are not in charge. This could well be true. But consider the recklessly fast-forwarded track for Artificial Intelligence (AI), Fintech, or social media—all three youthful endeavours, with no safeguards or oversight in place—and one could be forgiven for looking beyond well-meaning, potential victims, for global leadership on energy transition. Three things must happen before India can reach net zero. First, renewable electricity (RE as defined expansively to include all non-fossil fuel sources including atomic power) capacity must reach around 1,000 GW by 2040 versus just 179 GW presently. Second, battery, pumped storage, or hydrogen/ammonia storage (400 GW) must become available by 2050. Per a 2020 estimate, battery costs for storing 25 percent of the electricity produced are expected to decline to INR 1.02 per kWh in 2025 and INR 0.83 per kWh in 2030. Co-locating storage with RE power costing INR 3 per kWh makes imminent sense with the additional advantage of being able to even out the daily variability of solar and wind power.

Atomic power is mature but yet to overcome its primary downsides—high cost, long construction schedules, the existential risk from disasters or leaks posing threats to those living within a 100-km radius of such plants, and high decommissioning costs.

Solar and wind power could account for two-thirds of generation capacity by as early as 2040. Their dominance continues even beyond the commercialisation of hydrogen as a clean fuel, sometime between 2040–2050. By 2060, solar and wind could account for 80 percent of the generation capacity. This projected dominance can be upturned by future technological developments. Today, these mature technologies appear to be the only option. Green Hydrogen, still in the developmental stage, is dependent on RE as an input into its manufacture. Atomic power is mature but yet to overcome its primary downsides—high cost, long construction schedules, the existential risk from disasters or leaks posing threats to those living within a 100-km radius of such plants, and high decommissioning costs. Fission-based Small Modular Reactors (SMR) are hot topics for discussion in informed gatherings as attractive alternatives to centralised nuclear reactors—in configurations as small as 10 MWe and generally below 300MWe. SMRs offer flexibility in deployment, shorter construction periods, more safety in operations, lower upfront cost on account of being mass designed and produced centrally and assembled on site, and longer refuelling cycles. Their lifecycle cost-effectiveness can only be proved through trial runs. Whether the high levels of governance and oversight required to ensure that decentralised plants run safely even as this option excites nuclear aficionados is the real concern for an average citizen. Third, a resilient transmission grid; here India has both strengths and opportunities. Our transmission and distribution grid must be reimagined. It is not generally appreciated that, globally, India is the third-largest consumer of electricity and energy. Around 21 percent of generating capacity (CEA Annual Review 2021) is for self-utilisation in industry and, therefore, not grid dependent. This proportion is an underestimate because almost every commercial, middle class and rich residential building also has a backup generator or battery storage. Nevertheless, it is via the grid that the bulk of electricity is supplied to customers—retail and wholesale.

SMRs offer flexibility in deployment, shorter construction periods, more safety in operations, lower upfront cost on account of being mass designed and produced centrally and assembled on site, and longer refuelling cycles.

The affordability of electricity supply in future will depend as much on the cost of generation as on the cost of transmission. The future grid will look very different and cost more because the outlays on transmission lines to evacuate energy and supply it to demand centres will escalate. Also, the cost of a resilient, stable, digital grid with adequate storage and quick ramp-up generation capacity to ensure black start recovery is substantial.

The embarrassment of future riches 

First, unlike the existing select club of less than 550 centralised generators and suppliers (273 thermal, 250 hydro, and 8 nuclear stations), the grid offtake points could increase to over 200 million as solar residential rooftops, farm establishments, and an estimated 100 million EVs by 2030 (McKinsey 2022) choose to become “prosumers” – both consuming from and supplying to the grid—via net metering as envisaged under the Pradhan Mantri Kisan Urja Suraksha evam Utthan Mahabhiyan (PM KUSUM) Scheme. Managing these decentralised retail flows in an integrated manner to maintain grid stability requires an institutional and technological overhaul.

Integrated grid management 

Today, we have a fractured grid with respect to the interface with customers, working in silos defined by state boundaries and the voltage of supply. The Union government manages all the inter-state high voltage and extra high voltage transfers whilst individual state-level controllers do the same within their jurisdictions. The two sets of controllers work synchronously, to the extent possible. Why this institutional compromise is a mess can be appreciated by imagining the Indian Railways (IR)—a unified management operation presently—being run like the electricity grid in India. The Rajdhani, Shatabdi, and Vande Bharat trains and super haulage freight trains would run on tracks ending at state boundaries with central controllers managing the exchange on the interchange points when the trains cross state boundaries. The entire track system and stations would be managed by State governments or large cities with fractured management, varying functional standards and police jurisdictions to handle disasters and crime. Instead, the IR is an integrated system insulated from external pressures—a bit like army cantonments and large Union government-owned public sector enterprises.

The Union government manages all the inter-state high voltage and extra high voltage transfers whilst individual state-level controllers do the same within their jurisdictions.

One can only shudder to conceive of a network infrastructure being managed otherwise. But this is exactly what the Grid Controller of India (originally POSOCO) has to tussle with every minute just to keep the electricity grid stable and to supply electricity at the normative frequency and in the time-differentiated volume demanded by each state silo for further distribution. States also have their own generation and transmission. These supplies have to be factored in at the State level before raising the demand for inter-state grid power on a daily basis that is changeable every hour in advance. With just 220 GW of peak electricity demand presently, the resultant inefficiencies are significant. Imagine what could happen with 1,500 GW of electric power demand surges through the system in 2050.

The trishul of decarbonisation 

The trishul of decarbonisation comprises first, high quality, green, affordable power; second, efficient appliances and industrial equipment on the demand side; and third, institutional development to generate savvy regulations, which capitalise on using market principles to price and trade carbon. Institutional revival can be forged by reimagining the differential mandates of the Union government, 30 state governments and 52 cities with more than a 1 million population (Kozhikode at number 19 is bigger than the 16th largest state of Nagaland, according to the 2011-12 census population). Electricity is a concurrent subject with retail supply entrusted to state governments. This is sensible given the contextual variations courtesy India’s cultural multipolarity, but the grid must be integrated.

The time for playing to our anti-colonial instincts by developing indigenous technology options will come once we have the fiscal base, the managerial strength, and deep manpower resources for going at it alone.

This is why the entire programme for decentralised decarbonisation should be outsourced to state governments and million plus cities with Union fiscal and technical support. To ensure that both large-scale and small-scale RE run parallel to each other, fiscal support for the latter should be linked to facilitation of the former by state governments by making land available for large-scale RE.

Deepen global research collaborations 

Fiscal support for targeted research and development, built around structured collaborations with international research centres and laboratories via a structured diplomatic and private sector outreach should be a driver for the ongoing reimagining of India’s geopolitical alignment

Barter domestic markets for jobs

The time for playing to our anti-colonial instincts by developing indigenous technology options will come once we have the fiscal base, the managerial strength, and deep manpower resources for going at it alone. China embarked on a collaborative journey in 1978, whilst we were still languishing in autarky. Apple started manufacturing in China in 2001. Incidentally, China’s GDP in 2002 was equal to our GDP in 2022—a 20-year lag. Catch-up is possible but only by entering into collaborative, technological, and commercial alliances, with India contributing its vast pool of relatively low-cost technical expertise, savvy private management practices, and potential business profits from unmet domestic market demand. Action on the ground sans deep institutionalisation is as hollow as institutions that are no longer fit for purpose in a dynamic world order. Shunning the tempting, low-hanging fruits of short-termism and going for the long haul is advised.

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Sanjeev S. Ahluwalia is an Advisor at the Observer Research Foundation

• Economics and Finance
• Energy
• Energy Access
• Energy Efficiency
• China
• India
• AI
• Atomic power
• Climate change
• Decarbonization
• fintech
• green hydrogen
• Net zero
• renewable electricity
• SOLAR POWER
• Wind Power

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