ESG looks at the measurability of decisions that corporates make and how it affects the environment.
By Vineet Mittal
Diwali or Deepavali, celebrated to welcome the return of Lord Rama from exile, marks the triumph of good over evil. It is also a victory of the good over the evil within us, where each day we make a choice on certain issues and decide the course of events based on our actions.
In the context of renewables, we can learn from this theme of good winning in the long run. Oil and gas have been necessary evils that have helped aid industrialization and propel economic growth. For instance, despite being the second-largest coal producer, India imported 215.25 million tonnes of coal in 2020-21. Even today, the world is heavily dependent on oil for its energy consumption, as can be seen in the context of the war situation currently playing out.
As countries attempt to pivot towards renewables from fossil fuels, none can completely wean off dependence on them, but the transition is undoubtedly taking place. Slowly but surely, we are seeing this conversation changing, with the advent of concepts such as ESG (environmental, social and governance) gaining prominence. ESG looks at the measurability of decisions that corporates make and how it affects the environment.
This becomes even more important in light of India’s aiming to reach net zero emissions by 2070, besides meeting 50% of its electricity requirements from renewable energy sources by 2030. The significance of these commitments by India as well as the world has been highlighted by the fact that COP 27 – to be held in November – would be a watershed event that will determine the course countries adopt for their environmental and growth goals.
India is already amongst the fastest-growing renewable electricity markets in the world. Significantly, the Hon’ble Prime Minister recently inaugurated India’s first solar village in Gujarat, augmenting the ambition of transitioning to clean energy. Presently, fossil fuels account for 59% of India’s installed energy capacity, which is touted to comprise 31.6% of the energy mix by 2030.
The latest estimates state that India will require roughly US$223 billion in investments to meet its 2030 energy needs. The Institute for Energy Economics and Financial Analysis and Climate Energy Finance estimated that India will reach 405 gigawatts of renewable energy capacity by 2030. This is anticipated to exceed the Central Government’s target of producing half of its electricity from non-fossil fuel sources by the end of the decade.
We must be Atmanirbhar (self-reliant) in our energy needs. Prime Minister Narendra Modi has laid out his vision for the same and all endeavours must work towards this objective. To be energy efficient, we can rely on wind, hydrogen and solar energy. The latest PLI scheme for the solar sector will go a long way in bolstering domestic manufacturing and helping the nation become self-reliant. This has been echoed by the Union Minister of Commerce and Industry, Consumer Affairs, Food and Public Distribution and Textiles, Shri Piyush Goyal, who stated recently that India has the potential to become the supplier of renewable energy equipment.
Given the nation’s abundance of sun and wind, we should use this to our advantage in harnessing renewable energy. India increased its solar capacity by an average growth rate of 47% annually between 2026 and 2021. India’s present installed solar and wind capacity is 90GW. According to the Global Wind Report 2022, India accounts for 8.5% of the global wind turbine manufacturing capacity, with immense potential to expand its share in the global wind supply chain. If OEMs (Original Equipment Manufacturers) and MSMEs (micro, small and medium enterprises) are supported, it will give wings to the sector.
As per the country’s updated nationally determined contributions, India aims to increase its overall share of installed non-fossil fuel capacity to 50% by 2030. As per the draft Electricity Plan, the country would have 57% non-fossil fuel capacity by 2027 and 68% by 2032.
India’s march towards renewable sources should be backed by concerted efforts from the government and all other stakeholders to achieve its goals of renewable energy while eventually emerging as an energy exporter. With the government backing schemes supporting such segments, companies need to vigorously take up this mandate and make it their own. It’s time to make hay when the sun shines rather than squandering this golden opportunity.
(Vineet Mittal is chairperson, Avaada Group.)
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