At a time when the global energy market is facing a drop in demand due to COVID-19 pandemic, turning immune to the situation, the renewable sector has seen a growth. An India Energy Outlook report for 2021 by the International Energy Agency (IEA) highlights that going by the current momentum, the electricity sector in India is on the cusp of a solar revolution.
In an exclusive interview with Moneycontrol, Fatih Birol, IEA’s Executive Director expressed hope that solar energy will overtake coal within the next ten years. He also batted for the usage of hydrogen, carbon capture storage and clean natural gas to reduce the dependency on coal.
Q. India is talking about introducing a hydrogen mission. A lot of focus is there on solar too. How are you seeing this scenario?
Hydrogen can make the decarbonised system much more cleaner. When it comes to solar, India is set for explosive growth. Today, less than 5 percent of India’s electricity generation is coming from solar and 70 percent from coal. Our numbers show that due to extra-ordinary cost-competitiveness of solar and right policies, renewables, mainly solar can overtake coal within the next ten years.
It is a huge change and wonderful news for India in terms of its economy and air pollution in the cities.
Q. What is your take on India’s steps towards making energy accessible to the common man?
When people ask me whether or not India will be able to steer its economy and energy sector in a successful way, I say absolutely yes. I have two reasons to say this. First, when I released our first India Energy Outlook in 2015, I said India is moving to the Centre stage of world energy. Today, without hesitation I can say that India has arrived at the centre stage of the world energy. The second reason is that India added 900 million electricity connections since 2000, it has never been the case in the history of any country. In my view, it is a history written in the world energy sector.
Implementation of LED is a big step towards energy efficiency improvement and an example for many countries and the Ujjwala program that brought clean fuel for millions of people are the reasons why I believe that India can have a much brighter, affordable and cleaner energy future.
Q. India is targeting to become a gas-based economy. Is it a strategy in the right direction?
Today, the share of gas in India’s energy mix is 6 percent. It is one of the lowest in the world. There are ambitions of the government to increase this. We expect growth, mainly in industry and city gas distribution, for cooking and transport sector. This can definitely improve the air quality and displace coal, which is good news.
It is very important that this gas comes from the countries where we have control over methane emissions. I believe the share of gas in India will increase significantly. When we talk about coal, we talk about the electricity sector. But a lot of coal is used in iron and steel, cement and others, we have to decarbonise them and make them environment friendly. Gas can play an important role here.
Q. How can India bring down the share of coal in its energy basket?
Coal has a huge share of 70 per cent of electricity generation in India. For electricity generation, continuous support for renewables, especially solar, coupled with battery storage is needed to decarbonise the power sector. We use a lot of coal in India also for iron and steel and cement, here we can use, hydrogen, carbon capture storage and clean natural gas to reduce the dependency on coal.
If India goes in this direction, it will not only be god for the Indian economy and energy sector, but the country can be a pioneer by setting a new model of clean growth.
Q. With vaccines in place, do you see the global energy demand recovering?
If we can bring the pandemic under control, we can see recovery in the global energy sector. I believe coal is very difficult to recover because of lesser emphasis on coal. The oil will recover in a few years, but renewables proved to be Covid immune in 2020. Although global energy declined by 5 per cent in 2020, renewable energy saw an increase. In 2021, it will increase significantly.
Q. How do you rate India’s steps towards ensuring energy security?
India is making good steps in the right direction. For example, I can remember that during the low oil prices, India was one of the countries that put a lot of oil in their stocks. Our numbers show that the reliance on imported oil in India will go up substantially as a result of road transport, especially trucks, which is a major contributor to oil imports in India. Trucks in many countries, we use for freight. I think it may be a very good idea to transfer a big chunk of it to railways, which can run by electricity. It will be good for energy security, reducing pollution and will be good for the Indian economy.
I am following the developments in the Indian Railways sector, I can say it is an outstanding success in terms of logistical transformation to what kind of energy it is using and the way it is modernised. It can be a model for many countries.
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