India should focus on furthering the use of clean energy sources to surpass China and Vietnam

India has made substantial progress while also encouraging the use of electric vehicles. The Global Electricity Review 2024 states that India overtook Japan to become the third largest solar power generator in 2023, providing 5.9% of its global growth

The Global Electricity Review 2024, released recently by EMBER, has come with some positively impactful findings. The foremost is that the world has passed the 30 per cent renewable electricity milestone. Among other revelations, pertaining to 2023, there has been a 23 per cent growth of solar generation; a 10 per cent wind generation growth and only 0.8 per cent growth of fossil fuel generation.

According to the report, which considers electricity data from 215 countries representing 92% of global electricity demand, record renewables have propelled the world towards a new era of falling fossil generation. With an increased investment on solar energy, there is every possibility that heavy dependence on fossil fuels will be on wane. It may be recalled that at the UN's COP 28 climate change conference in December, world leaders agreed to triple global renewables capacity by 2030. The target, if achieved, would see the world reach 60% renewable electricity by 2030, which will result in halving power sector emissions and putting the world on a pathway that is aligned with the 1.5°C climate goal.

Renewables have expanded from 19% of global electricity in 2000, driven by an increase in solar and wind from 0.2% in 2000 to a record 13.4% in 2023.

It is to be noted that China was the major contributor in 2023, accounting for 51% of the additional global solar generation and 60% of new global wind generation. Other major contributors to global wind growth include the EU (24%) and Brazil (7%) while global solar growth was provided by EU (12%) and the US (11%). Together the top four solar growth economies - China, the EU, the US, and Brazil - accounted for 81% of solar power growth in 2023.

Solar is leading the energy revolution, adding more than twice the new electricity as coal. Solar has remained the fastest growing source of electricity generation for the 19th straight. Wind still provides a higher share of global electricity, at 7.8% (2,304TWh) while there has been a record fall (-88TWh) in global hydropower generation led a five year low of 4,210 TWh. Hydropower generation remained the largest source of clean power globally, although droughts affected the hydro output in different regions like Asia (-5.9%), North America (- 7.4%) especially Mexico which saw a fall of 42%; China saw the largest absolute drop in hydro of 59 TWh, (-4.5% ). Other Asian economies were more severally affected with hydro generation falling 15% in India and 20% in Vietnam. The global nuclear power generation increased by a marginal 46 TWh (+1.8%) to 2,686 TWh recovering less than 40% of its fall in 2023. (-123 TWh, -4.4%).

The climate change, extreme heat wave conditions coupled with growing population in developing countries and an increase in other economic activities imply that there will be substantial increase in power demand, which has to be met with substantial further additions to alternative renewable energy capacity. It is therefore imperative that solar, wind, hydropower, nuclear and other such alternative energy sources need to be expanded to keep pace with the growing demand for power.

In 2023, global electricity demand increased by 627TWh and it is likely to increase further. Five fast growing technologies accounted for over half of the demand growth and all could benefit if the focus is on efficiency - EVs, heat pumps, electrolysers for green hydrogen and data centres As electrification picks up speed, OECD demand growth will begin to rise for the first time in two decades. Demand growth will not just bounce back from recent weak levels but will enter a new era of faster growth -just how fast will depend in part on the extent of focus on efficiency. As the world continues to electrify, the efficiency gains will mean that less overall energy is needed, even as demand for electricity increases.

India has been in the forefront when it comes to adding large capacity, particularly solar, in its bid to boost use of clean energy sources given its commitment to net zero emissions by 2070.

Towards this, India has made substantial progress while also encouraging the use of electric vehicles. The report states that India overtook Japan to become the third largest solar power generator in 2023, providing 5.9% of its global growth.

Solar generation in 2023 was 17 times higher than in 2015. Around 78% of its electricity from fossil fuels is higher than the global average of 61% and the Asian average of 68%. Clean generation made up 22% of India’s electricity mix, compared to the global average of 39% and Asia’s 32%. The share of wind and solar reached a record high of 9.9% 196 TWh, though India remained 3.5% behind the global average of 13.4%. In Asia, China 16%, Japan 12%, and Vietnam 13% have higher shares of wind and solar power in their electricity mix. India's electricity generation is more carbon intensive (713 gCO2 per kWh) than the global average (480 gCO2/kWh) with coal accounting for three quarters of generation in 2023. However India's per capita emissions from the power sector is just over half of the global average (1.0 tCO2 vs 1.8 tCO2).

India is the fourth lowest among G20 as its per capita power demand (1.4MWh) is significantly below the global average (3.7MWh) and less than half of the average in Asia (3.5MWh). Electricity provided 16% of India's final energy consumption in 2022, significantly below the world average of 21%.

These data shows that India has to catch up with the likes of China, Japan, Brazil and Vietnam, in terms of substantial increase in solar, wind, hydrogen and other clean energy sources so as to substantially lessen the dependence on coal consumption. It is therefore necessary that further intensified progress has to be achieved in wind, solar and other low carbon sources as currently these are not growing enough to meet India's rapidly growing electricity demand, leading to more power sector emissions.

India has set out ambitious renewable targets which will see solar generation reach 602 TWh and wind generation reach 237 TWh by 2030. Looking at the current situation and the quest to meet the NZE target, may require $101 billion in additional financing.

India wants to triple renewable capacity by 2030 aiming for 509GW.

According to Ember analysis, annual capacity additions need to increase significantly for India to meet the capacity target. All stakeholders will have to collectively take up the responsibility to make it happen for the welfare of the world.

(The author is former Chairman & Managing Director of Indian Overseas Bank)