Country Snapshot: India

Publication October 2015


On 1 October 2015 the Indian government submitted its Intended Nationally Determined Contribution (INDC).

India does not have a greenhouse gas (GHG) emissions issue to the extent that other countries do and it recognises this fact in its INDC submission stating,

‘Even now, when the per capita emissions of many developed countries vary between 7 to 15 metric tonnes, the per capita emissions in India were only about 1.56 metric tonnes in 2010.’

However, India as a developing country, faces different issues due to the fact it must place significant emphasis on growth and social development in order to eradicate poverty in the country. India accounts for 2.4% of the world’s surface area, but supports around 17.5% of the world population and it houses the largest population without access to electricity (304 million), therefore, dealing with these issues must be its foremost priority and the country must focus on doing this in a sustainable way,

‘Given the development agenda in a democratic polity, the infrastructure deficit represented by different indicators, the pressures of urbanization and industrialization and the imperative of sustainable growth, India faces a formidable and complex challenge in working for economic progress towards a secure future for its citizens.’

India’s INDC states that it intends to reduce the emissions intensity of its GDP by 33 to 35 percent by 2030 from 2005 levels. India intends to achieve circa 40 percent cumulative electric power installed capacity from non-fossil fuel based energy resources by 2030 with the help of transfer of technology and low cost international finance including from the Green Climate Fund (GCF). Additionally, the INDC sets out a plan to create an additional carbon sink of 2.5 to 3 billion tonnes of CO2 equivalent through additional forest and tree cover by 2030.

The full text India’s INDC submission can be accessed here.

Policy and Regulation

Article 48-A of the Constitution of India states that “The State shall endeavour to protect and improve the environment and to safeguard the forests and wildlife of the country”.

The broad policy framework on environment and climate change is laid down by the National Environment Policy (NEP) 2006, which promotes sustainable development along with respect for ecological constraints and the imperatives of social justice. The current development paradigm reiterates the focus on sustainable growth and aims to exploit the co-benefits of addressing climate change along with promoting economic growth. The National Action Plan on Climate Change (NAPCC) provides a sharper focus on required interventions. Currently, NAPCC is implemented through eight National Missions, outlining priorities for mitigation and adaptation to combat climate change.

Thirty-two states and union territories have put in place the State Action Plan on Climate Change (SAPCC) attempting to mainstream climate change concerns in their planning process. The National Policy for Farmers focuses on sustainable development of agriculture. The National Electricity Policy (NEP) underscores the focus on universalizing access to electricity and promoting renewable sources of energy, as does the Integrated Energy Policy (IEP).

Policies to promote actions that address climate concerns also include fiscal instruments such as a carbon tax which is levied on coal, lignite and peat (otherwise known as the clean energy cess), cuts in subsidies, increase in taxes on petrol and diesel, market mechanisms including Perform Achieve and Trade (PAT), Renewable Energy Certificates (REC) and a regulatory regime of Renewable Purchase Obligation (RPO).

Renewable energy

India’s INDC talks about a two pronged attack on the growth of carbon emissions. The first prong deals with the generation of energy, whereby the Government is promoting greater use of renewables in the energy mix mainly through solar and wind power and shifting towards supercritical technologies for coal based power plants. The second prong deals with the demand and use of energy which is dealt with under the heading Energy Efficiency below.

India is running one of the largest renewable capacity expansion programs in the world. Between 2002 and 2015, the share of renewable grid capacity increased over 6 times, from 2% (3.9 GW) to around 13% (36 GW). This momentum of a tenfold increase in the previous decade is to be significantly scaled up with the aim to achieve 175 GW renewable energy capacity in the next few years.

The INDC sets out India’s renewable energy targets as summarised below:

  1. Wind energy has been the predominant contributor to the renewable energy growth in India accounting for 23.76 GW (65.2%) of the renewable installed capacity, making India the 5th largest wind power producer in the world. With a potential of more than 100 GW, the aim is to achieve a target of 60 GW of wind power installed capacity by 2022.
  2. Solar power in India is poised to grow significantly. Solar power installed capacity has increased from only 3.7 MW in 2005 to about 4060 MW in 2015, with a Compound Annual Growth Rate (CAGR) of more than 100% over the decade. The ambitious solar expansion programme seeks to enhance the capacity to 100 GW by 2022, which is expected to be scaled up further thereafter. A scheme for development of 25 Solar Parks, Ultra Mega Solar Power Projects, canal top solar projects and one hundred thousand solar pumps for farmers is at different stages of implementation. The Government of India is also promoting solarisation of all the 55,000 petrol pumps across the country out of which about 3,135 petrol pumps have already been solarised.
  3. Biomass energy constitutes about 18% of total primary energy use in the country and more than 70% of the country’s population depends on it. However, it is currently used in an inefficient manner with high levels of indoor pollution. A number of programmes have been initiated for promotion of cleaner and more efficient use, including biomass based electricity generation. It is envisaged to increase biomass installed capacity to 10 GW by 2022 from current capacity of 4.4 GW.
  4. Hydropower contributes about 46.1 GW to current portfolio of installed capacity, of which 4.1 GW is small hydro (up to 25 MW) and 41.99 GW is large hydro (more than 25 MW). Special programmes to promote small and mini hydro projects, new and efficient designs of water mills have been introduced for electrification of remote villages. With a vast potential of more than 100 GW, a number of policy initiatives and actions are being undertaken to aggressively pursue development of country’s vast hydro potential.
  5. India is promoting Nuclear Power as a safe, environmentally benign and economically viable source to meet the increasing electricity needs of the country. With a 2.2% share in current installed capacity, total installed capacity of nuclear power in operation is 5780 MW. Additionally six reactors with an installed capacity of 4300 MW are at different stages of commissioning and construction. Efforts are being made to achieve 63 GW installed capacity by the year 2032, if supply of fuel is ensured.
  6. Clean Coal policies: Coal based power as of now accounts for about 60.8% (167.2 GW) of India’s installed capacity. In order to secure reliable, adequate and affordable supply of electricity, coal will continue to dominate power generation in future. The Government of India has already taken several initiatives to improve the efficiency of coal based power plants and to reduce its carbon footprint. All new, large coal-based generating stations have been mandated to use the highly efficient supercritical technology. Renovation and Modernisation (R&M) and Life Extension (LE) of existing old power stations is being undertaken in a phased manner. About 144 old thermal stations have been assigned mandatory targets for improving energy efficiency. Coal beneficiation has been made mandatory. Introduction of ultra-supercritical technology, as and when commercially available is part of future policy. Besides, stringent emission standards being contemplated for thermal plants would significantly reduce emissions.

The Government’s goal of Electricity for All is sought to be achieved by the above programs that would require huge investments, infusion of new technology, availability of nuclear fuel and international support.

Energy efficiency

On the demand side, efforts are being made to efficiently use energy through various innovative policy measures under the overall ambit of the Energy Conservation Act. The Energy Conservation Act has been enacted to encourage efficient use of energy and its conservation.

The energy intensity of the economy has decreased from 18.16 goe (grams of oil equivalent) per Rupee of GDP in 2005 to 15.02 goe per Rupee GDP in 2012, a decline of over 2.5% per annum.

Demand side programmes have been launched to replace existing low-efficiency appliances:

  1. During the last decade, there has been rapid transformation of efficient lighting in India. The sales of Compact fluorescent lamps have risen to about 37% of the total lighting requirements in 2014 from 7.8% in 2005. India has also launched an ambitious plan to replace all incandescent lamps with Light-emitting diode (LED) bulbs in the next few years leading to energy savings of up to 100 billion kilowatt hours (kWh) annually.
  2. Standards and Labelling Programme launched by the Government of India enables consumers to make informed decisions by providing information about the energy consumption of an appliance. Currently, 21 equipment and appliances are labelled. The programme has contributed to an increase of 25% to 30% in the energy efficiency of an average refrigerator or air-conditioner in 2014 compared to those sold in 2007. Super-Efficient Fan (that uses half as much energy as the average fan) programme has been launched. Further, two sets of Corporate Average Fuel Consumption standards for cars have been notified, with one coming into force in 2017 and the second set in 2022.
  3. Partial Risk Guarantee Fund for Energy Efficiency (PRGFEE), a risk sharing mechanism to provide financial institutions with a partial coverage of risk involved in extending loans for energy efficiency projects, and Venture Capital Fund for Energy Efficiency (VCFEE), a trust fund to provide “last mile” equity capital to energy efficiency companies, have been established.
  4. The Energy Conservation Building Code (ECBC) sets minimum energy standards for new commercial buildings. Eight states have already adopted and notified the ECBC, and over 300 new commercial buildings have become compliant. The Code will be made more stringent to promote construction of even more (Near-Zero) energy-efficient buildings. “Design Guidelines for Energy Efficient Multi-storey Residential buildings” have also been launched.

Financial Support

The major share of India's current climate finance comes from budgetary sources, as most of the resources for adaptation and mitigation are built into the ongoing sectoral programmes. The availability of funds for such purposes is largely guided by the overall resources and requirement of different sectors.

India is not relying solely on budgetary resources and is experimenting with a careful mix of market mechanisms together with fiscal instruments and regulatory interventions to mobilise finance for climate change.

Tax Free Infrastructure Bonds of INR 50 billion (USD 794 million) are being introduced for funding of renewable energy projects during the year 2015-16.

Through its INDC, India has shown its commitment to combat climate change and these actions are indeed important contributions to the global effort. However, India’s efforts to avoid excessive GHG emissions during their development process are also tied to the availability and level of international financing and technology transfer since India still faces complex developmental challenges.

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