Embracing a Clean Energy Future: New US-India Investment Partnership

India needs to invest US$250 billion over the next five years to tackle chronic energy shortages and provide power for its 1.2 billion people. The government is targeting $100 billion of investment in renewables and $50 billion in transmission and distribution. So while Barrack Obama was on Indian soil he reinforced a partnership to boost clean energy investment as well as the need for India to play a crucial role in the global climate change alliance to cut greenhouse gas emissions. Read More

This article by Ken Hickson appeared on the eve of President Obama’s visit in the new publication  “Foreign Investors on India”, produced by Gurdip Singh to give insight into the economic scenario in India, investment opportunities in the country, challenges facing foreign investors and sector-wise policy details for entrepreneurs keen on setting up or expanding business in India.

20 January, 2015

India-US: Obama to Address Climate Change while Boosting Clean Energy Investments

When Barrack Obama steps onto Indian soil for a three day visit from 25 January he is expected to make sure attention goes well beyond civil nuclear and military co-operation to an enhanced emphasis on clean energy investment as well as reinforce the need for India – in partnership with the US and other big players – to play a crucial role in the global climate change alliance to cut greenhouse gas emissions.

Obama’s visit to India couldn’t have come at a better time. India is currently grappling with the sensitive issue of maintaining a delicate balance between industrial development and agriculture and environmental preservation. The latest ordinance to amend last year’s Land Acquisition Act to facilitate investment in infrastructural and industrial projects is only the latest is a series of developments in recent years that reflect the Indian dilemma to stimulate economic growth without increasing pollution and displacing indigenous people on a mass scale.

In a curtain-raiser for the main Presidential game, US Secretary of State John F. Kerry made it clear when he was in India earlier this month that the US definitely wants to boost trade ties and promote sustainable energy.

US officials have been quoted as saying that the goal of the meetings between the leaders of the world’s two oldest and largest democracies is to have “very concrete and tangible things that we can show forward movement on when President Obama and Prime Minister Modi meet, including on climate change”. The leaders are expected to unveil a number of initiatives to expand research and access to clean energy technologies.

A couple of months ago that Coal and Power Minister Piyush Goyal told a World Economic Forum conference in New Delhi that India needs to invest $250 billion over the next five years to tackle chronic energy shortages and provide power for its 1.2 billion people. The government is targeting $100 billion of investment in renewables and $50 billion in transmission and distribution to “create a national grid where power can seamlessly flow”, the minister said according to media reports.

There are certainly signs that this “clean energy investment bandwagon” has begun.

SunEdison and Adani made an announcement at the Vibrant Gujarat Summit (on 12 January) that they would together build and finance the country’s largest vertically integrated solar PV manufacturing facility in Gujarat – involving a total investment of $4 billion.

The facility is expected to produce enough panels to encourage extensive growth of solar generation in India, helping to achieve the target of clean energy independence.

The Mundra facility will integrate and cover entire features of solar panel production like Polysilicon refining, ingots, wafers, cells and panels along with a systematic supply chain for raw materials and consumables. It is expected that around 4,500 direct jobs and over 15,000 indirect jobs will be created during the process.

Vneet S Jaain, the Executive Director and CEO of Adani Power said at the time:  “India has embarked on an ambitious program to become a world leader in power generation from renewable technologies, and sees solar as a key part in realizing that goal”.

Such a major investment certainly starts to move India a few rungs up the solar energy manufacturing and production ladder, which has been driven by the US, China and Germany up until now.

The private sector solar investment is certainly a boost also for Prime Minister Modi’s “Make in India” vision that promotes indigenous clean energy production.

The evolving partnership between American and Indian companies – and the SunEdison/Adani move flags this trend – started as the President’s trip was being planned in detail. Back in October last year there was a very fruitful US-India Energy Summit in Washington which not only charted a roadmap for an enhanced strategic partnership, but marked a major development in the collaboration between the two countries in energy and sustainable development.

One of the key speakers at the Energy Summit was none other than Dr R K Pachauri, best known for his Nobel Peace Prize winning role as chairperson of the Intergovernmental Panel on Climate Change, or IPCC, but also head of the Energy and Resources Institute, or TERI, who told the assembled guests:  “For the first time there is optimism and an upbeat attitude towards renewable energy in India.”

He spoke of prospects of a breakthrough. He said that the summit discussions had developed several ideas to help implement the goals of the “new and enhanced strategic partnership on energy security, clean energy, and climate change”.

The two-day summit, organized by TERI, North America and Yale University, brought experts from the fields of energy, finance, policy, technology, climate change and environment, and deliberated on collaborations between the US and India.

One concrete step forward came when TERI and United Technologies Corporation signed a Memorandum of Understanding to set up the Center of Excellence on Energy Efficient Buildings in India’s Cities. This will be set up at and administered by TERI and will focus on ways to evaluate and enhance energy efficiency in existing buildings in India. This initiative was made possible by a donation from United Technologies.

Dr J Michael McQuade, UTC Senior Vice President of Science and Technology, said, “With India’s expected urban expansion over the next 20 years, it is imperative that we make India’s existing and future buildings more energy efficient. UTC’s contribution to create this new Center of Excellence is a major step forward in supporting that mission.”

US Deputy Secretary of Energy, Mr Daniel Ponemon, who gave the luncheon address at the summit’s High Level Corporate Dialogue, said, “There are huge environmental risks by not building environmentally, or in a way to mitigate climate change. We have every reason to act together.”

At the important Gujarat January summit, there was also the urgent call and commitment to act. Terming 2015 as the most important year, the United Nations Secretary General, Ban Ki-moon, stated that it was a target year to achieve the millennium development goals.

The UN boss made it clear that “we have to accelerate our all resources and efforts to meet the target……and agree the post-2015 development agenda with focus on sustainable development”. He also said there must be “a universal and meaningful climate change agreement in December in Paris.”

“Gujarat is a prime example of how sustainability and private action are different aspects of the same issue. I call on all India’s business community to lead the transformation. We need sustainability and inclusive growth,” the Secretary General said.

Echoing the sentiments expressed by Ban Ki-moon on climate change concerns, US Secretary of State John Kerry mentioned that it was affecting crop production, economy and raising the cost of doing business.

“Together we can create an environment where all companies play a leading role in bringing cutting edge technology, equipment and capital know-how not just to India, but countless countries that need this growth and development,” he said.

It is not that India has been lagging too far behind in the clean energy revolution but it just hasn’t had the high level endorsement or commitment.

The Asian Development Bank has supported a number of key developments in this sector including the Tata Power Wind Energy Financing Facility to set up two wind energy projects in Maharashtra. They are expected to reduce GHG gas emissions by approximately 129,000 tons of carbon dioxide (CO2) per year and by approximately 2.6 million tons of CO2 during the minimum project life of 20 years.

If the sun shines – and the wind blows – on President Obama during his visit hopefully he will see some obvious signs that India is moving in the right energy direction, but it needs massive injection of funding – from outside the country and from the private sector at home – if it is cut its serious dependency on fossil fuels and at the same time deal with climate change impacts, poverty, food production and air pollution.

In recent years, nuclear power projects such as in Kudankulam and hydro-electric projects in the Brahmaputra basin have become target of civil society’s opposition but India’s hunger for clean energy cannot simply be brushed under the carpet. India has to stimulate sustainable growth without compromising on environmental protection and public safety. India has an advantage that it can learn lessons from China’s experiences where growth came at a heavy expense making it one of the world’s most polluted countries where organizing the Olympic Games had become synonymous with experiencing haze.

Public private partnership and a vibrant climate of genuine co-operation between the world’s two largest democracies could well demonstrate to Indians at home and aboard that peace and prosperity could be a welcome by-product of sustainable development and the clean energy revolution.

Ken Hickson is a sustainability leader, climate change action advocate and champion for a clean energy, zero waste, resource efficient and low carbon future. He is Chairman/CEO of the Singapore based consultancy, Sustain Ability Showcase Asia (SASA).  He is Director for the Blue Asia Group and Singapore chairman for the International Green Purchasing Network. He has been actively involved in the World Wide Fund for Nature (WWF) for many years. He is the author of six books, including Asia’s first book of sustainability case studies, “Race for Sustainability” (2013), in which he sets out the most important four E’s of sustainability – Energy, Environment, Economy and Ethics. He also produced the land-mark climate change reference book, “The ABC of Carbon” (2009).   He has been producing the e-newsletter abc carbon express since March 2008. He is a regular speaker at events throughout the Asia Pacific and regularly contributes to many online and print publications. He produces the annual 100 Global Sustain Ability Leaders list.   kenhickson@sustain-ability-showcase.com

Source: www.fii-news.com/india-us-obama-to-address-climate-change-while-boosting-clean-energy-investments/