India is key to world’s sustainable growth – GGGI Interview Part I

pv magazine: What does GGGI have planned for India?

Dr. Frank Rijsberman: GGGI understands the importance of facilitating finance for programs to harness the benefits of green technology solutions in the electrification of India. We are supporting the design and financial structuring of a debt fund for the off-grid energy sector.

Specifically, we have worked on creating access to a clean energy fund, where we helped the Indian Renewable Energy Development Agency Limited (IREDA), to come up with a fund of around US$100 million, comprising $70 million for IREDA and $30 million from the Green Climate Fund (GCF). This is partly as a grant and partly as a loan with a lower interest rate. Therefore, combined together, it becomes attractive for small and medium enterprises in the off-grid sector, to do off-grid solar projects. We helped to set up and structure that project, and it is now in its final stages for the Indian government to submit to the GCF. And that is also what we hope to do with the International Solar Alliance (ISA) in other countries and our member countries also.

We will continue to develop innovative financing schemes to draw more actors into these efforts, especially small and medium enterprises that are ordinarily put off by overwhelming risks of getting involved.

How crucial is electric mobility in India? Which projects are you working on?

I think, in India and a number of other ISA countries, when you look at energy, we are seeing a pretty rapid transition in electricity generation to renewables and a phasing out of coal. A challenge will be rapidly moving to electric mobility – to make all the buses, metro areas electric.

And there I think there is big link to air quality, as people are concerned about this. People realize how big the health impact is. So yes, we need to get rid of coal-fired power plants, but also diesel buses, three wheelers and so on, as key contributors to improving air quality. That I think is likely the biggest driver of e-mobility for now. And then, of course, we see big cities in China, Shenzhen, for instance, where 16,000 buses have already been changed into electric buses, not necessarily because they were cheaper, but because air quality was the top priority.

As we see more cities do this, and as there is more experience with electric buses, prices are likely to fall. Somewhere in the next few years, it is likely to become commercially attractive. Effective BRT (Bus Rapid Transport) systems could be key. We are thinking of places like Ahmedabad, where there is BRT, and where electric buses could probably be introduced relatively quick.

GGGI helped Bengaluru Metropolitan Transport Corporation (BMTC) and other stakeholders to introduce the first electric buses to India at scale, (around 60). And, we have a smaller number in Himachal Pradesh – 30 buses – so those are still pilots, just to check if it is possible.

Sustainable green growth projects, such as the Bengaluru electric bus project, have at least two important impacts: They demonstrate success and the value of national government championing priority sustainability issues; and more importantly, they highlight the longer-term benefits and the more resilient rates of return of green projects that can attract more investment for funding their scaling up.

The other, bigger, challenges are in energy efficiency, both in building and also in industries.

When we talk about grid expansion, isn’t it contradictory to the energy storage sector, especially mini-grid/off-grid sector?

That might be the case, if you believe that governments are going to be successful in expanding the grid everywhere. They might have such a policy. For example, many African countries have had such a policy of trying to reach everyone for decades, with no success. So, I think if you do mini-grids in those countries, the risk of being overshadowed by the grid is pretty low. In addition, we had our annual green growth week in October last year, and the mini-grid developers were even more aggressive than that , even in areas where the mini-grid exists. There, they see a role for mini-grids in stabilizing the grid or improving the quality of electricity, even in places where there is a grid. So, instead of generators, they can have rooftop solar, not just on houses, but also maybe on factories or shopping centers. And, to combine that with batteries means that those rooftop installations and batteries compete not with the grid, but with the diesel generators. So we see actually quite a positive future for those mini-grids, even when there is a grid.

India has rolled out the Deen Dayal Upadhayay Gram Jyoti Yojna (DUGJY) scheme for rural electrification and the SAUBHAGYA scheme to reach all households. How effective are these schemes, particularly when compared to Africa, where such policies failed to come to fruition?

In India, there is a lot more development capacity and money than found in many of the African countries that are already ISA members. We are talking about some of the least-developed countries globally, that do not have an economy that is growing 7% per year, for example, like India has now. India frankly is really not on the same level as those African countries. India has many other opportunities to build metros, railways or make other significant investments that a lot other ISA members do not have. Therefore, in India it is much more a question of getting the policies right. However, the challenges are more in transportation, which means electric-mobility, and other bigger challenges in energy efficiency, both in buildings and industries.

Why do you think India’s sustainable growth is paramount for the world?

India is the fastest-growing major economy in the world; it has launched an ambitious government reform agenda to improve national competitiveness; and it is home to the world’s largest Millennial generation. In fact, India accounts for almost one-fifth of all people under 25 years old globally. The country has a momentous opportunity to leverage its expanding and diversifying economy to capitalize on this demographic dividend. If it does so successfully, India will become the world’s primary consumer growth market and a more significant source of global production.

But the challenges are very real as well. India is home to over one-quarter of the world’s poor, suffers from insufficient or deficient infrastructure, and faces acute climate change vulnerabilities. Rapid urbanization also creates challenges. The population of India’s urban areas is projected to increase by about 30,000 people per day over the next 10 years.

Inclusive growth is high on the global agenda today, and nowhere more so than in India. In fact, one of Prime Minister Narendra Modi’s campaign slogans was “Sabka Saath, Sabka Vikas,” or “Collective Efforts, Inclusive Growth.” And it’s great to see that all of the Indian government and business leaders are optimistic about the prospects for continuing to grow the country’s economy.

Green low carbon solutions are of paramount importance in extending India’s service delivery of clean water, sanitation and energy for all. This goes hand in hand to ensure resilience of India’s ecology, its capacity to adapt to climate change impact, and enabling marginal segments of the population to participate in the mainstream economy and the emerging opportunities. Policy choices are important for achieving the goal of resilient ecosystems.

What are the main issues to be addressed when it comes to climate change and sustainable growth?

While substantial progress has been made in establishing a global framework for tackling the challenges of climate change and global poverty, significant challenges must still be overcome for the world to deliver on the ambitions of building a sustainable and resilient future. The world must strengthen momentum in the global efforts to make a smooth transition to climate-resilient and green economies to achieve the Sustainable Development Goals (SDGs) and the Nationally Determined Contributions (NDCs) to the Paris Agreement.

Green growth is about realizing the SDGs under the UN Agenda 2030, and NDC under the Paris Climate Agreement, both with strong national contexts. Similarly, well-designed and interlinked climate action, and SDG implementation programs could be drivers of green and inclusive growth.

 

Part II – Partnership with International Solar Alliance (ISA).