31,350 MW Hydro Electric Projects Receives Rs 12,461 Crore Support

The Cabinet has approved a modification to the budgetary support scheme for enabling infrastructure for Hydro Electric Projects, totaling Rs 12,461 crore. The scheme would be implemented from FY 2024-25 to FY 2031-32.

Benefits:

The revised scheme would boost hydro electric projects through:

Faster development of HEPs
Improved infrastructure in the remote and hilly project locations
Direct and indirect employment opportunities for local people
Fresh investments into the hydropower sector and
Incentives for timely completion of new projects.

Modifications:

The government has introduced the following modifications to the earlier scheme.

a) Added budgetary support for four additional items: (i) transmission line from powerhouse to closest pooling point; (ii) ropeways; (iii) railway siding; and (iv) communication infrastructure.

b) The program will cover all Pumped Storage Projects (PSPs), including Captive/Merchant PSPs, and all Hydro Power Projects with a capacity greater than 25 MW. Under the plan, a total PSP capacity of roughly 15,000 MW would be supported.

c) Under this scheme, projects whose Letter of Award for the first major package is issued up until June 30, 2028, will be taken into consideration.

d) The budgetary support cap is logically set at Rs. 1.0 crore/MW for projects under 200 MW and Rs. 200 crore plus Rs. 0.75 crore per MW for projects exceeding 200 MW. The maximum amount of budgetary support in exceptional circumstances is Rs. 1.5 crore per megawatt, if there is adequate justification.

e) However, budgetary support will be given following an evaluation of the infrastructure enabling costs.

Backdrop:

It should be mentioned that the government has implemented policy measures to address the challenges that impede the development of hydropower, such as isolated locations, steep terrain, a lack of infrastructure, etc. Measures like designating large hydropower projects as Renewable Energy sources, imposing Hydro Power Purchase Obligations (HPOs), rationalizing tariffs through tariff escalation, providing budgetary support for flood moderation in storage hydroelectric projects, and funding the cost of enabling infrastructure—that is, building roads and bridges—were implemented in March 2019.

India is taking steps towards making the country more weather-ready and climate-resilient with Mission Mausam. The mission is to give an extra edge in tackling extreme weather incidents and the impacts of climate change.

The Cabinet meeting chaired by Prime Minister Narendra Modi has approved an outlay of Rs.2,000 crore over two years for the same.

Mission Mausam, to be chiefly implemented by the Ministry of Earth Sciences, is envisaged to boost the country’s weather and climate-related science, research, and services. It will help equip all stakeholders including citizens and last-mile users, in tackling climate events.

As part of the mission, India will expound research and development, and capacity in atmospheric sciences, especially weather surveillance, modelling, forecasting, and management. Integrating advanced observation systems, high-performance computing, and cutting-edge technologies like AI and ML, will enable precision weather prediction.

The focus will include monsoon forecasts, alerts for air quality, extreme climate incidents and cyclones, weather interventions for managing fog, hail, and rain, etc. This will be made possible by deploying next-generation radars and satellite systems with advanced sensors and high-performance supercomputers, the development of improved Earth system models, and a GIS-based automated Decision Support System for real-time data dissemination.

The mission will benefit the agriculture, disaster management, defence, environment, aviation, water resources, power, tourism, shipping, transport, energy, and health sectors. It will also enhance data-driven decision-making in urban planning, road and rail transport, offshore operations, and environmental monitoring.

Three Ministry of Earth Sciences institutes: the India Meteorological Department, the Indian Institute of Tropical Meteorology, and the National Centre for Medium-Range Weather Forecasting will primarily implement Mission Mausam. These institutions will be supported by the Indian National Centre for Ocean Information Services, the National Centre for Polar and Ocean Research, and the National Institute of Ocean Technology.

India has launched SOP for its Green Tug Transition Program.

The Green Tug Transition Program (GTTP) is a pivotal initiative towards realizing the country vision of a sustainable and green maritime sector in India. The government has announced an investment of Rs 1000 crore to build the green tugs.

The first set of tugs will be battery-electric, with provisions for adopting other emerging green technologies such as hybrid, methanol, and green hydrogen as the industry evolves.

Phase 1 of the GTTP will begin on October 1, 2024, and continue until December 31, 2027. During this phase, four major Ports—Jawaharlal Nehru Port Authority, Deendayal Port Authority, Paradip Port Authority, and V.O. Chidambaranar Port Authority—will procure or charter at least two green tugs each, based on standardized designs and specifications issued by the Standing Specification Committee (SSC).

Speaking on the launch, Sarbananda Sonowal, Minister of Ports, Shipping and Waterways and Minister of AYUSH said, “This program not only aligns with our environmental goals but also strengthens our commitment to ‘Make in India,’ promoting domestic innovation and manufacturing in the maritime industry.”

“The program is also expected to create significant employment opportunities in shipbuilding and ship design,” said TK Ramachandran, Secretary, MoPSW.

All tugs operating in Indian major ports are expected to convert to green tugs by the end of 2040, guaranteeing a uniform, environmentally responsible fleet throughout the nation. In addition, any new tug constructed in India after 2033 for use in Indian ports must adhere to the ASTDS-GTTP requirements.

It must be noted that the Maritime India Vision 2030 (MIV 2030), launched by the Prime Minister Shri Narendra Modi in 2020, outlines key strategies to enhance India’s maritime sector, aiming to make it a global leader in safety, sustainability, and environmental responsibility.

This vision includes ambitious targets such as sourcing 60% of each major port’s power demand from renewable energy and achieving a 30% reduction in carbon emissions per ton of cargo by 2030. Building on this, the Maritime Amrit Kaal Vision 2047, introduced in 2023, sets a specific goal for Major Ports to reduce greenhouse gas emissions from port vessels by 30% by 2030.

President Draupadi Murmu’s address to the nation on 14 August and Prime Minister Narendra Modi’s speech today sent hope in the climate and sustainability universe. Both the leaders focused on climate justice as a key element in their respective Independence Day address to the nation.

Somewhere in the middle of her address, President Murmu touched upon two key things: justice for women and climate justice.

Incidentally, both are critical for a nation that aims to be a developed country while also fighting an increasing number of climate incidents.

She said, “Climate change has become a reality. It is all the more challenging for developing nations to change their economic paradigm. Yet, we have already made more progress in that direction than expected. India is proud to be at the forefront of humankind’s battle to save the planet from the worst effects of global warming. I also urge you all to make small but effective changes in your lifestyle and contribute to the cause of dealing with the challenge of climate change.”

She continued, “In our society, women have suffered from traditional prejudices. But I am glad to note that the Government has given equal importance to women’s welfare and women’s empowerment. Their participation in the labor force has increased. The most heartening development on this front has been the significant improvement in the sex ratio at birth. Nari Shakti Vandan Adhiniyam is aimed at ensuring real empowerment of women.”

The Prime Minister meanwhile spoke about the major reforms undertaken by the GOI.

In his speech, he highlighted the challenges faced by the nation in the wake of the recent natural calamities. “This year and for the past few years, due to natural calamity, our concerns have been mounting. Several people have lost their family members and property in natural calamity; nation too has suffered losses.”

Though the country has set 2070 as the net zero target, the PM indicated that the Railways will achieve zero emissions by 2030. This must be seen as a significant effort and a milestone in India’s climate action efforts. Interestingly, many Indian corporates and other entities have set 2050 as a net zero target.

The PM said, “We are moving towards a net-zero future. We have fulfilled the Paris accord target well before time. India has done what the G20 group could not do.”

However, the announcement of increasing non-renewable energy capacity to 500 GW was a dampener, given India’s progress in renewable energy. This shows that the country still prioritizes energy security. The good thing is that the country is focusing more on energy security to support the ‘Viksit Bhart 2047’ target.

Our take:

As WriteCanvas has consistently maintained, thermal energy will continue to remain the mainstay to meet the growing power demand, atleast for the next decade. We have regularly opined about the need for reforms, policies, and regulations that can accelerate climate action in India. And I hope PM’s mindset change remark also applies to climate as a segment.

On the occasion of the 75th Independence Day celebration, Prime Minister Narendra Modi made a critical announcement to make “India Energy Independent Nation by 2047.” A nation that is on an energy transformation journey has integrated different energy sources, including green hydrogen.

India, the world’s third-largest economy in terms of energy needs, faces a 35% surge in energy demand by 2030. It requires non-traditional energy generation methods to achieve net-zero emissions by 2070.

The country has set ambitious targets to phase down fossil fuel consumption. The set targets are 50% of power generation from RE, 5 million tonnes of hydrogen, and 30% of EV penetration by 2030.

India constituted the National Green Hydrogen Mission in the year 2022 as an answer to energy security and emission reduction. The country, in the last budget (2023 February), has allocated Rs 197 billion for the mission. And it aims to be an exporting hub for green hydrogen.

However, the country’s green hydrogen production is lagging behind its target.

Challenges

The cost factor
Storage cost
Tax rebates and subsidies
Duty cuts
The gap in demand from the industry
Investment challenges
Technology maturity
R&D and innovation

The cost of green hydrogen is twice as high as gray hydrogen, with 30-50% going towards electrolyzer costs and the remaining towards renewable electricity.

To supply (round-the-clock) RTC energy, India must reduce the cost of energy storage. Thanks to indirect cost subsidies, batteries and other energy-storing devices could become less expensive. Customs duty exemptions or goods and services taxes are other possible forms of intervention.

A new report titled Green Hydrogen: Enabling Measures Roadmap for Adoption in India suggests ways to increase green hydrogen capacity in the country.

Authors Sachin Kotak, Partner, Bain & Company, and Jörgen Sandström, Head, Transforming Industrial Ecosystems, World Economic Forum, recommend a reduction in production costs to $2 per kg, with a direct subsidy of $0.50/kg for early adopters.

What will drive green hydrogen in the country?

Four types of users are likely to drive green hydrogen adoption: existing gray hydrogen users, industrial processors, transportation providers, and power and heating companies. Demand-side interventions should be tailored for each user, such as promoting blended hydrogen, which combines green and gray hydrogen with minimal impact on final product costs.

According to the authors, industrial clusters, consisting of co-located companies, can significantly reduce transportation and storage infrastructure costs, offer tech scale-up opportunities, share risk/resources, and optimize energy demand.

Responsible for 30% of global CO2 emissions, these clusters can accelerate green hydrogen adoption. The Transitioning Industrial Clusters Towards Net Zero initiative encourages participation. India could encourage cluster participation by allowing companies to bid for incentives and sharing success stories. The EU’s Hydrogen Backbone program could also benefit.

Four types of users are likely to drive green hydrogen adoption: existing gray hydrogen users, industrial processors, transportation providers, and power and heating companies. Demand-side interventions should be tailored for each user, such as promoting blended hydrogen, which combines green and grey hydrogen with minimal impact on final product costs.

India’s low-cost renewable energy, skilled workforce, and abundant land make it a potential hub for green hydrogen derivative exports. To capitalize, stakeholders should improve port infrastructure, allowing green hydrogen and ammonia manufacturers to establish storage bunkers near ports.

Subsidies:

More actions, such as increased PLI scheme subsidy support, are required to lower the cost of electrolyzers drastically and, consequently, green hydrogen.

India should encourage green hydrogen adoption and disincentivize carbon-intensive energy sources by diverting subsidies and funds towards green energy transition through a comprehensive carbon-tax regime.

Additionally, the country can increase direct subsidies for early adopters to drive down the cost of electrolyzers. During the first year of electrolyzer production, the Indian government provided $54/kW in subsidies through a production-linked incentive (PLI). The first tranche operated from July to October of 2023. Nevertheless, the cost of producing green hydrogen has only decreased by $0.1/kg thanks to this subsidy. To significantly lower the cost of electrolyzers and, consequently, green hydrogen, further interventions are required, such as increased subsidy support through the PLI scheme.

The National Green Hydrogen Mission:

The Indian government launched the National Green Hydrogen Mission in 2022 to address energy security and combat emissions in hard-to-abate sectors, but there is limited on-the-ground traction.

The 2022 national program aims to reduce dependence on imports of fossil fuel and feedstock and create export opportunities for Green Hydrogen and its derivatives to help the world fight climate.

It must be noted that as part of its Union Budget for 2023, India removed customs taxes on imported lithium-ion batteries for electric vehicles, potentially leading to a 20% price drop. Similarly, to promote the production of green hydrogen, India may exempt imported battery storage parts for RTC renewable energy.

In a nutshell:

India’s green hydrogen production costs are currently $4-5/kg, double the cost of gray hydrogen.
To reduce production to $2/kg, India could lower energy storage, provide renewable electricity, and implement indirect subsidies.
Increase direct subsidies for early adopters to reduce electrolyzer costs.
Minimize costs related to conversion, storage, and transport of green hydrogen and its derivatives by creating industrial clusters, promoting blended hydrogen, and capitalizing on India’s export potential.
Divert investments away from carbon-intensive alternatives and into greener pathways through a comprehensive carbon-tax regime.
Implementing easier measures can significantly impact India’s transition from an energy importer to an exporter, creating a win-win solution for energy security, economic growth, and environmental sustainability.

The annual event, – Conference of Parties COP28, no doubt, will be a critical crossroads for energy transition.

Starting tomorrow (30 November to 12 December), the signatories will assemble in Dubai to deliberate and conclude on substantial action to mitigate climate change. The Indian Prime Minister, Mr. Narendra Modi, also will be present during the first 2 days. It may be business as usual for those who are offering their first-ever review. The decibel levels may rise when the bossiest polluters (China, US) are asked to commit more to the loss and damage fund.

I believe that the debate on phasing out versus phasing down fossil fuels taking center stage at COP 28 this year. While the decision to completely phase out will be a bold and decisive step towards a cleaner, energy future, phasing down offers a more pragmatic approach, particularly for developing nations like India.

It is a fact that like many other developing countries, India’s energy landscape is currently dominated by fossil fuels, with coal alone accounting for 49% of electricity generation. The country’s ambitious renewable energy targets, aiming for 500 GW of installed capacity by 2030, are commendable. However, the sheer scale of India’s energy demand necessitates a gradual transition, which balances environmental protection and economic growth.

According to me, phasing down fossil fuels, rather than an abrupt phase-out approach, presents a more viable strategy. This approach allows the country to utilize its existing fossil fuel infrastructure while simultaneously investing in cleaner energy sources like renewables and hydrogen. The gradual reduction in fossil fuel reliance ensures a smooth transition without jeopardizing energy security.

The United Nations report, projecting continued fossil fuel production growth until 2030 for coal and 2050 for oil and gas, further supports the phasing-down approach. This projection highlights the need for a realistic transition timeline that aligns with global fossil fuel production trends.

Assessing countries’ climate mitigation goals only after fossil fuel production peaks makes sense. Because, by that time, nations will have a clearer roadmap for their energy transition and will have developed sustainable solutions like hydrogen to meet rising energy demands.

That is why I expect COP28 to delve into the phasing out versus phasing down debate, with discussions on stocktaking, commitments from major emitters like China and the US, and the loss and damage fund. I also see the anti-ESG lobbying taking center stage during this year. However, the real impetus for actionable change is likely to emerge from the phasing out versus phasing down conversations.

Key Takeaways:

Phasing down fossil fuels offers a more pragmatic approach to energy transition for developing countries like India.

India’s energy needs necessitate a gradual transition that balances environmental sustainability with economic growth.

Assessing climate mitigation goals after fossil fuel production peaks provides a more realistic timeline.

COP28 is expected to be a critical turning point in the global energy transition.

As a sustainability warrior, I see the historic Women’s Reservation Bill passed by the Indian Parliament on September 20, 2023, as a pave blocker for the much-discussed DEI (diversity, Equity and Inclusion).

It is especially significant because it starts from the policy framing house.

I stand by the voices that supported the Women’s Reservation Bill pending in the Parliament for the last 27 years. Introduced multiple times, the bill was first passed in the Rajya Sabha or the Upper House in 2010. It failed to be tabled in Lok Sabha and lapsed. The journey of this bill itself narrates the story of women empowerment in India.

Undoubtedly, we need women’s participation at all levels if we want to create a sustainable society. Women play a pivotal role in developing an ecosystem to protect Mother Nature.

Secondly, the rural-urban divide further fractures the participation of women in civil society. In India, the rural population is much larger than the urban population. Lack of economic opportunities force men to migrate to cities or metros. This lays bare the critical role women play in running the family, and front-ending initiatives for financial and food security, health and education, and water.

While government initiatives, self-help groups and groups are collectively working to uplift women, a few financial products are just not enough! The buck cannot stop here; more participation and inclusiveness are required. I am confident that ensuring 33% reservation through a bill at higher levels will further fuel the pace of women-centric initiatives that can have multilayer changes.

Climate mitigation initiatives mandate DEI. And because it is a compliance requirement (tick boxing), we have slowly started seeing changes with women getting prominence in roles, including at board levels or taking the lead in strategy, CSR or other initiatives in corporates. But the gaps are still visible. Somehow, I always felt it was not enough. How can we get more women to participate? I hope this bill also sets the required benchmarking for the corporates to integrate more women at all levels.

The Indian Renewable Energy Development Agency Ltd. (IREDA) has signed a Memorandum of Understanding (MoU) with India Infrastructure Finance Company Ltd (IIFCL), to finance renewable energy projects.

What the MoU says:
As per the terms and conditions signed in the MoU:

IREDA and IIFCL will engage in co-lending, co-origination and loan syndication for all categories of renewable energy projects including small Hydro projects
• Both organizations will fix interest rates for IREDA borrowings for a period of three to four years
• IIFCL may invest in the bonds issued by IREDA

Mr. Pradip Kumar Das, CMD, IREDA, said, “… With this collaboration, we will be able to support Govt. of India’s target of achieving 50% share of our energy from non-fossil fuels by the year 2030. We remain confident that by working together, we will leverage our strengths and continue to serve our customers in line with Prime Minister Shri Narendra Modi’s vision of Aatmanirbhar Bharat and a clean and green India.”

According to a Third National Communication (TNC) report, India’s greenhouse emissions, emitted for every unit increase of gross domestic product (GDP) – fell by 33% from 2005 to 2019.

The rise in RE generation and increase in forest cover will enable India to reduce emissions intensity by 45% from the 2005 level by 2030—the country’s commitment to the United Nations Convention on Climate Change (UNFCCC).

“The entire world is grappling with climate change. India has shown the way to combat it,” Prime Minister Narendra Modi said in his address to the nation from the Red Fort on the 77th Independence Day.

SDGs addressed:

13 Climate Action
13.2 Integrate climate change into national policies, planning
13.b Build capacity for climate change planning, management

The target:
India has set a target to reduce:
The carbon intensity of its economy by at least 45 percent by 2030
Reduce the total projected carbon emissions by one billion metric tons through 2030
Achieve the target of net zero by 2070.

The task:
India must eliminate coal by 2040 and reduce emissions by 2030 to meet 1.5°C temperature limit; 2023-24 budget includes clean energy projects.

The National Action Plan on Climate Change (NAPCC), which includes missions in particular areas of solar energy, energy efficiency, water, sustainable agriculture, Himalayan ecosystem, sustainable habitat, green India, and strategic knowledge for climate change

The initiatives:
The National Adaptation Fund for Climate Change (NAFCC): To support adaptation efforts in States and Union Territories, with 30 projects approved in 27 states and UTs.

ISA: To promote solar energy utilisation and facilitate cooperation among solar-rich countries.

CDRI: To enhance infrastructure resilience in natural and man-made disasters by collaborating governments, organizations, and experts on strategies, policies, and technologies.

Leadership Group for Industry Transition (LeadIT): For voluntary low carbon transition of sectors that are difficult to reduce carbon emission

The International Big Cat Alliance: To protect and conserve seven major big cats – tiger, lion, leopard, snow leopard, puma, jaguar and cheetah globally.

New initiatives under CDRI and ISA, such as Infrastructure for Resilient Island States (IRIS) and Green Grids Initiative—One Sun One World One Grid (GGI-OSOWOG), were also introduced at COP26 in Glasgow in November 2021.

Conclusion:
India has been successful in adopting renewable energy. At present, it has a 160GW of RE capacity in its energy mix which is 40% of the total installed capacity. The country to reach the nether capacity is aggressive in RE capacity addition. The target is to achieve 500GW from RE by 2030. Going by the reduction scene in emissions, the RE capacity will help further lower the country’s emissions!

Tag: Narendra Modi

News

31,350 MW Hydro Electric Projects Receives Rs 12,461 Crore Support
WriteCanvas News

Benefits:

Backdrop:

News

‘Mission Mausam’ gets Rs 2,000 crore outlay
WriteCanvas News

News

India Launches SOP for Green Tug Transition Program
WriteCanvas News

Blog

President, PM put Climate at the Centre stage
Renjini Liza Varghese

Our take: