How Indian Businesses are Navigating Energy Transition
Indian businesses are in the lead in navigating the complex energy transition process, driven more immediately by the imperative to reduce greenhouse gas emissions.
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Indian businesses are in the lead in navigating the complex energy transition process, driven more immediately by the imperative to reduce greenhouse gas emissions for humanity and ensure energy security with economic growth.
About India's Energy Transition
India is the world's third-largest energy consumer and has made a major commitment to changing its current energy landscape. The country has set ambitious targets for boosting the share of non-fossil fuel-based power generation in its energy transition as it shifts from fossil fuel sources. India has, by 2030, targeted 500 GW of renewable energy capacity and will generate 50% of total power from non-fossil sources. This transition is key not only for reducing greenhouse gas emissions but also for improving energy security and propelling sustainable economic growth.
As of March 2024, India has installed around 190 GW of renewable capacity this is a rather huge step forward. In any case, to make such ambitious targets, India would have to speed up its efforts to be close to the annual installation of 50 GW. All that would be required is proper governmental and private sector actions on addressing the infrastructure gaps and lack of funds while encouraging technological innovations in clean energy solutions.
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What are the Strategies Employed by Indian Businesses?
- Use of Renewable Resources
Indian companies are focusing quite massively on renewable energy. A firm like India Power has stated the ambition to double its mix of green energy from its existing 40% to 70% by 2025. This involves entering long-term contracts for purchasing solar power and designing battery technologies, which would make its distribution grid more efficient and more robust.
- Industrial decarbonisation
The industrial sector accounts for approximately 21% of Indian emissions and is in full transformation. Companies are embracing a clean future with the adoption of green hydrogen and carbon capture utilization and storage. The two leaders of this are the fertilizer and steel sectors which have initiatives such as JSW Energy's commitment to sourcing renewable hydrogen to supply their Karnataka steel plant. Decarbonisation is where heavy industries go, but which has relied historically on coal and other fossil fuels, in the first place.
- Technological Innovation
Advanced technologies have to be adopted for increasing energy efficiency. Digital solutions are being implemented in businesses for better monitoring and management of energy consumption. The optimization of grid performance using advanced control systems can significantly reduce transmission losses, a major challenge in India's power sector. In addition, companies can manage the intermittency of renewable energy through battery storage systems.
- Government Support and Policy Frameworks
The Indian government will play a crucial role in facilitating the energy transition through various policies and incentives. For example the PLI scheme on domestic manufacturing of solar panels and batteries, has been rolled out with financial support for green hydrogen projects. These initiatives are all geared toward stimulating investment in clean technologies and creating an environment conducive to business that can shift away from fossil fuels.
- Focus on Green Mobility
Transport is one area in which Indian enterprises have significant mileage toward becoming more sustainable. Government policy goals are such that by 2030, electric vehicles must become mass mode, encouraged through some FAME-like programs. Companies have started to invest in electrical vehicle technologies and infrastructure build-out.
Read Our Blog: Fast-tracking energy transition with Atmanirbhar Bharat
Challenges in the Energy Transition
Despite all these advances, several challenges still stand to hamper a smooth transition toward a sustainable energy future:
- Coal Dependence: Coal remains the source of about 73% of power generated in India. It becomes challenging to shift away rapidly from coal without putting energy security at stake. The costs associated with switching out of coal are very prohibitive too.
- Funding Gaps: The problem of access to low-cost finance persists. There are significant barriers to large-scale financing of renewable projects as perceived risks associated with new technologies prevail.
- Infrastructure Constraints: Grid infrastructure is highly constrained and must be upgraded significantly to support additional renewable capacity reliably. The integration of variable sources requires investments in modernizing the grid.
- Skill Development: The whole process will demand a technically skilled workforce in new technology and processes. Companies, therefore, need to increase investment in training programs that align with the changing nature of jobs due to the transition from dirty to clean energy resources.
Conclusion
Indian businesses are actively moving toward the transition in the energy scenario by strategically investing in renewable energy, technologically innovative options, and government-backed programs. However, despite dependence on coal, lack of funding, and inadequate infrastructure, the general message among the business communities in every sector is one of acceptance and implementation as part of their corporate responsibility.
With India aiming at reaching net-zero emissions by 2070, businesses will not only play a key role in innovation but also in this journey, they must ensure that such transition is just and fair so that ultimately it leads to an overall sustainable future that benefits the different sections of the society.
About the Author
Parul Bohral
Legal Content WriterParul Bohral, a BALLB graduate and experienced legal researcher and content writer with expertise in various legal areas, including corporate law and intellectual property. I have gained valuable experience in esteemed legal environments, where I have strengthened my research skills, allowing me to approach legal writing with precision and depth.
As a legal content writer, I am committed to delivering work that not only informs but also engages readers. By staying informed about the latest trends in content marketing and regulatory developments, I ensure that my writing remains sophisticated and meets industry standards. My dedication to thorough research enables me to craft content that is both insightful and impactful.
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