Population explosion has resulted in manifold increase in demand for energy. The conventional, non-renewable sources of energy, such as coal, petroleum, natural gas, etc. are experiencing extensive pressure, resulting in an urgent need to switch to non-conventional sources of energy which are renewable and ecologically safe.
For instance, solar, geothermal, wind, biomass, tidal and wave energy fall under non-conventional sources. Maximum utilisation of renewable sources will facilitate generating energy without harming the environment and its surroundings.
The role of new and renewable energy has been assuming increasing significance in recent times with the growing concern for the country’s energy security. Energy self-sufficiency was identified as the major driver for renewable energy in the country in the wake of the two oil shocks of the 1970s. The sudden increase in the price of oil, uncertainties associated with its supply and the adverse impact on the balance of payments position led to the establishment of the Commission for Additional Sources of Energy (CASE) in the Department of Science & Technology (DST) in March 1981. The Commission was charged with the responsibility of formulating policies and their implementation programmes for development of renewable energy apart from coordinating and intensifying research and development in the sector.
There has been a visible impact of renewable energy in the Indian energy scenario during the last five years. Renewable energy sector landscape in India has witnessed tremendous changes in the policy framework with accelerated and ambitious plans to increase the contribution of solar energy. There is a perception that renewable energy can now play a significant role with access to improved technologies. According to the Ministry of New and Renewable Energy:
The total power generated, as on March 31, 2016, from various renewable energy sources is 65.76 GW, bifurcation of which is – wind (33.03 GW), solar (7.45 GW), small hydro power (up to 25 MW) (8.33 GW), bio power (16.95 GW).
- The Indian government has up-scaled the target of renewable energy capacity to 175 GW by the year 2022 which includes 100 GW from solar, 60 GW from wind, 10 GW from bio-power and 5 GW from small hydro power.
- The capacity target of 100 GW set under the National Solar Mission (JNNSM) will principally comprise of 40 GW Rooftop and 60 GW through large and medium scale grid connected solar power projects. With this ambitious target, India will become one of the largest green energy producers in the world, surpassing several developed countries.
- The total investment in setting up 100 GW will be around INR 6,00,000 crore. Several states are already witnessing silent revolution on rooftop solar power generation with the launch of net metering in the country.
- The new initiatives announced by the government during the financial year 2016-17 include setting up of two Light Detector and Ranging (LIDAR) at identified locations to study the offshore wind speed profile which would help in establishing techno-economic feasibility of the sites for installation of offshore wind power projects, schemes on energy storage, deployment of mini grid for meeting energy access and strengthening biodiesel activities in the states.
- The Jawaharlal Nehru National Solar Mission (JNNSM) was launched on the January 11, 2010 by the Prime Minister. The Mission has set the ambitious target of deploying 20,000 MW of grid connected solar power by 2022. It is aimed at reducing the cost of solar power generation in the country through long term policy, large scale deployment goals, aggressive research and development and domestic production of critical raw materials, components and products, as a result to achieve grid tariff parity by 2022. The Mission will create an enabling policy framework to achieve this objective and make India a global leader in solar energy.
- The Special Area Demonstration Project (SADP) Scheme was started in 1992-93 with the objective to demonstrate the New and Renewable Sources of Energy (NRSE) systems and devices and also to provide training facilities for meeting the energy needs in special areas.
- The renewable energy systems being set up under SADP include mainly solar power plants, solar water heaters, solar lights, biogas plants from kitchen waste and battery operated vehicles.
- SADP Scheme is being continued during the 12th Plan Period. The scheme comprises of the following two components; energy park scheme and demonstration of renewable energy systems at places of national and international importance to illuminate these places to supplement the energy requirement through clean and green energy.
Since India is running one of the largest renewable capacity expansion programmes in the world and there is a need for corresponding grid stability. Regulator will frame norms for ancillary services to support power system or grid operation especially with expanding renewable energy.
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Steve Ovett, the famous British middle-distance athlete, won the 800-metres gold medal at the Moscow Olympics of 1980. Just a few days later, he was about to win a 5,000-metres race at London’s Crystal Palace. Known for his burst of acceleration on the home stretch, he had supreme confidence in his ability to out-sprint rivals. With the final 100 metres remaining,
[wptelegram-join-channel link=”https://t.me/s/upsctree” text=”Join @upsctree on Telegram”]Ovett waved to the crowd and raised a hand in triumph. But he had celebrated a bit too early. At the finishing line, Ireland’s John Treacy edged past Ovett. For those few moments, Ovett had lost his sense of reality and ignored the possibility of a negative event.
This analogy works well for the India story and our policy failures , including during the ongoing covid pandemic. While we have never been as well prepared or had significant successes in terms of growth stability as Ovett did in his illustrious running career, we tend to celebrate too early. Indeed, we have done so many times before.
It is as if we’re convinced that India is destined for greater heights, come what may, and so we never run through the finish line. Do we and our policymakers suffer from a collective optimism bias, which, as the Nobel Prize winner Daniel Kahneman once wrote, “may well be the most significant of the cognitive biases”? The optimism bias arises from mistaken beliefs which form expectations that are better than the reality. It makes us underestimate chances of a negative outcome and ignore warnings repeatedly.
The Indian economy had a dream run for five years from 2003-04 to 2007-08, with an average annual growth rate of around 9%. Many believed that India was on its way to clocking consistent double-digit growth and comparisons with China were rife. It was conveniently overlooked that this output expansion had come mainly came from a few sectors: automobiles, telecom and business services.
Indians were made to believe that we could sprint without high-quality education, healthcare, infrastructure or banking sectors, which form the backbone of any stable economy. The plan was to build them as we went along, but then in the euphoria of short-term success, it got lost.
India’s exports of goods grew from $20 billion in 1990-91 to over $310 billion in 2019-20. Looking at these absolute figures it would seem as if India has arrived on the world stage. However, India’s share of global trade has moved up only marginally. Even now, the country accounts for less than 2% of the world’s goods exports.
More importantly, hidden behind this performance was the role played by one sector that should have never made it to India’s list of exports—refined petroleum. The share of refined petroleum exports in India’s goods exports increased from 1.4% in 1996-97 to over 18% in 2011-12.
An import-intensive sector with low labour intensity, exports of refined petroleum zoomed because of the then policy regime of a retail price ceiling on petroleum products in the domestic market. While we have done well in the export of services, our share is still less than 4% of world exports.
India seemed to emerge from the 2008 global financial crisis relatively unscathed. But, a temporary demand push had played a role in the revival—the incomes of many households, both rural and urban, had shot up. Fiscal stimulus to the rural economy and implementation of the Sixth Pay Commission scales had led to the salaries of around 20% of organized-sector employees jumping up. We celebrated, but once again, neither did we resolve the crisis brewing elsewhere in India’s banking sector, nor did we improve our capacity for healthcare or quality education.
Employment saw little economy-wide growth in our boom years. Manufacturing jobs, if anything, shrank. But we continued to celebrate. Youth flocked to low-productivity service-sector jobs, such as those in hotels and restaurants, security and other services. The dependence on such jobs on one hand and high-skilled services on the other was bound to make Indian society more unequal.
And then, there is agriculture, an elephant in the room. If and when farm-sector reforms get implemented, celebrations would once again be premature. The vast majority of India’s farmers have small plots of land, and though these farms are at least as productive as larger ones, net absolute incomes from small plots can only be meagre.
A further rise in farm productivity and consequent increase in supply, if not matched by a demand rise, especially with access to export markets, would result in downward pressure on market prices for farm produce and a further decline in the net incomes of small farmers.
We should learn from what John Treacy did right. He didn’t give up, and pushed for the finish line like it was his only chance at winning. Treacy had years of long-distance practice. The same goes for our economy. A long grind is required to build up its base before we can win and celebrate. And Ovett did not blame anyone for his loss. We play the blame game. Everyone else, right from China and the US to ‘greedy corporates’, seems to be responsible for our failures.
We have lowered absolute poverty levels and had technology-based successes like Aadhaar and digital access to public services. But there are no short cuts to good quality and adequate healthcare and education services. We must remain optimistic but stay firmly away from the optimism bias.
In the end, it is not about how we start, but how we finish. The disastrous second wave of covid and our inability to manage it is a ghastly reminder of this fact.