India’s high reliance on crude oil imports, which account for 87 per cent of its total requirement, should not shift to solar photovoltaic (PV) modules and critical minerals, as their supply chains and geopolitics are trickier, said the Economic Survey on Monday.
“It should not be that India’s high dependency on imports mainly for petroleum for its energy needs, shifts to high import dependency for Solar PV panels and critical minerals (systemic risks), whose supply chain and geopolitics may be even trickier,” the Economic Survey for FY24 said.
India needs to target diversified energy sources, including renewables (solar, wind, large, and small Hydro), green hydrogen, nuclear, and biofuels, it added.
“Such diversification will help minimise risks associated with energy systems while pursuing low-emission pathways in line with national commitments. The diversification also includes a significant role for thermal power in providing the base load to support large-scale deployment of renewables,” the Survey said.
India’s successful renewable energy growth story is well-established. Solar power installed capacity has increased drastically by over 25 times from 2014 to 2023.
However, several risks are associated with the large-scale phasing-in of renewables, such as intermittency, grid integration, backup power generation, storage, etc. It is important to supplement renewable energy with other non-fossil fuel sources such as nuclear, biofuels, and hydrogen.
- Find the Economic Survey for 2023-24 here
Generating finances
Availability, affordability, and accessibility of financial resources will drive the green transition, the Survey emphasised.
“While India has relied upon its resources so far, it is vital that resources from developed countries and mobilised by the latter flow to the developing countries in line with the objectives of the UNFCCC and its Paris Agreement. The negotiations on the New Collective Quantified Goal must lead to outcomes required to meet the temperature goal of the Paris Agreement,” it added.
The global narrative on the issue of climate change, describing it as a climate emergency, shifts focus from the equally, if not more, critical developmental problems and can cause panic, it said.
The world needs a more balanced approach to the issue of climate change. It should also focus on nearer-term policy goals of improving human welfare rather than being excessively preoccupied with one large, longer-term goal of global climate management.
Developing technologies
The Survey emphasised that many technologies required for global Net Zero are commercially unavailable, such as hydrogen-fuelled steel/cement, steel and aluminium production with CCUS, etc.
“There is a need to enhance international cooperation in R&D, especially in the domains of distributed RE, offshore wind, geothermal, tidal energy, biofuels, Compressed Bio Gas, green hydrogen, energy storage, electrolysers, and nuclear power (including Small Modular Reactors SMR),” it added.