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Big Deal: India's growth story must be delinked from sustainability goals, say experts

environment | Jun 3, 2022 11:58 AM IST

Big Deal: India's growth story must be delinked from sustainability goals, say experts

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On World Environment Day 2022, we take a look at how India's dependence on coal reduced in May due to record green energy output, despite a 23.5 percent growth in power demand.

With New Delhi racing to increase its share of renewable energy as part of its ambitious climate action, experts said India must accelerate its energy transition, keeping in mind high fuel prices, commodities shortage, and insufficient progress on the climate goals front.

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According to a Reuters analysis of government data, India's dependence on coal reduced in May due to record green energy output, despite a 23.5 percent growth in power demand.


"The growth agenda and the prospects of growth need to be somewhat delinked from the way we think about sustainability just now. India's lack of self-sufficiency in energy is not something that is new. It is only around 15 percent, it has been around that for a long time," Mukund Rajan, Chairman of ECube Investment Advisors, told CNBC-TV18.

He said if one sees the numbers for the last two months, the data suggests that renewable sources in the power grid actually increased from 10 percent to 14 percent from April to May and coal came down from around 75 plus to just over 70.

"In India's case, we need to ensure that we are not found lacking in terms of the ability to continue to support the power requirements. I think the growth agenda and the implications for the future are a slightly different set of issues. There, the concerns would be with the risks for growth for tomorrow," Rajan said.

Coming to the sustainability agenda, as far as companies are concerned, he said both in India and elsewhere, many companies, particularly the ones that have adopted net-zero targets, have a long-term vision and a long-term roadmap to achieve those targets.

"I don't think a short-term blip that you are currently seeing in terms of the price of fuel and the impact on energy security in this current period, is going to dramatically change the company's forecasts and outlook for the future, and the capital investments that they are making," he added.

According to Rajan, many Indian companies have announced targets in 2030 and 2040. "The largest company, Reliance Industries has a target of 2035. Many of the companies have been taking measures for the past few years and will continue to do so in the future to achieve those targets," Rajan said.

Promeet Ghosh, former deputy head of Temasek, also felt that the recent conflict between Ukraine and Russia has emphasised the importance of energy security and the fact that the sustainability focus in the last few years has led to an under-investment in fossil fuels.

"Now, this does not actually mean that the overall objective of progressing towards a net-zero world is compromised. Instead, I think what is going to happen is that there is now going to be much more focus on where the energy is being used, mainly industries and buildings, which actually account for about 48 percent in terms of end-use of the carbon footprint in the world," Ghosh told CNBC-TV18.

"So, I suspect what we are going see is this ramp-up of pressure on these sectors to reduce their carbon footprint so that overall journey is not compromised," Ghosh added.

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