Investment in Green Technology | Gist of Rajya Sabha TV / RSTV (now Sansad TV) - UPSC PDF Download

Introduction:

India has made significant commitments at COP26 towards climate action. These include fulfilling 50% of its energy requirement through renewable energy and bringing its non-fossil fuel energy capacity to 500 GW by 2030. All this will require huge investment in green technologies and big corporates are gearing up for this task. Solar and wind energy prices have fallen over 90% since 2000, incentivised by only modest subsidies. However, solar and wind energy are intermittent and cheap storage is needed for them to ensure power 24/7. New batteries and renewables are all set to power the world in a few decades based on commercial profitability. India’s 2030 vision of e-mobility includes 70 per cent of all commercial cars, 30 per cent of private cars, 40 per cent of buses, 80 per cent of two-wheelers and three-wheeler sales to be electric by 2030. This translates into more than 100 million Electric Vehicles and would require approximately 12.5 lakh crore rupees investment. Hydrogen is also emerging as an important source of energy since it has zero carbon content and is a non-polluting source of energy in contrast to hydrocarbons that have net carbon content in the range of 75–85 per cent. By moving to a hydrogen economy, India can not only reduce imports of oil, coal, and natural gas, but will also be able to export hydrogen to other countries in Europe and Asia.

Green energy:

• It is energy that comes from renewable, zero emission sources that do not pollute the atmosphere when used, as well as energy saved by energy efficiency measures. In other words, it is the energy derived from renewable, zero-emissions sources (“renewables”), as well as energy saved through energy efficiency (“EE”) measures.
• Clean energy is energy gained from sources that do release air pollutants, while green energy is energy derived from natural sources.
• There is a degree of crossover between clean energy and green or renewable energy sources, but they are not exactly the same.
• The perfect clean energy mix occurs where green energy meets renewable energy, such as with solar energy and wind energy.
• Clean energy Sources
• Sunlight
• Wind power
• Hydro or water power
• geothermal power
• Biomass
• Clean energy works by producing power without having negative environmental impacts, such as the release of greenhouse gases like carbon dioxide. A lot of clean energy is also renewable, including wind power, some hydro resources and solar powered energy generation.

Need for Building Green finance ecosystem:

• As part of the initial commitments to the Paris Climate Accord, India plans to reduce its carbon emission intensity – emission per unit of GDP – by 33-35% from 2005 levels over 15 years.
• It is working towards producing 40% of its installed electricity capacity by 2030 from non-fossil fuels. This would lead to a significant shift from coal-based power generation to renewable energy sources.
• To achieve these challenging statistics, it has to produce 100 gigawatt from solar, 60 gigawatt from wind, 10 gigawatt from biomass and 5 gigawatt from small hydropower by 2022. By 2022, India’s renewable capacity will more than double.
• According to the World Bank, 70% of the global greenhouse gas emissions comes from infrastructure development, construction, power plants and transport system operations.
• The World Health Organization projects that the number of deaths attributable to the harmful effects of emissions from key infrastructure industries will rise from the current 150,000 per year to 250,000 by 2030.
• Therefore, the challenge before developing economies is: how to modernize societies, build quality infrastructure and provide efficient transportation services while minimizing the damage to the environment.

Green Projects: Only Solar or Wind Energy?

• Let’s not confine the “green projects” status only to solar or wind energy. Sustainable land use, water and urban waste management, green buildings, clean transportation, pollution prevention and control systems, and energy efficiency projects are some of the areas that are globally eligible to receive green financing.
• The electric vehicles play a complementary role to biofuels, which represent 80% of growth in renewable energy consumption in transport. However, it said the share of renewables in total road transport energy consumption remains limited, increasing only from 4% in 2016 to almost 5% in 2022.
• With success of electric vehicles, there can be a situation where road transport is free of fossil fuels. There can be a situation of carbon free economy.
• India has to think and act strategically and try in leapfrog in forefront. Leapfrogging also helps in creating domestic manufacturing For now, India’s most of solar equipment are imported from china.
• However, India produces wind power which cannot satisfy adequate energy needs.

Role of Investment from Private sector:

• It has been estimated that approximately $100 trillion of additional investment will be required between 2016 and 2030 to sync the imperatives of global development with that of addressing the challenge of climate change.
• Banks and financial institutions are key intermediaries between investors who are keen to put more of their cash into low-carbon, sustainable projects and those requiring capital.
• Globally, green finance is gaining prominence as a medium to raise funds for environment-friendly and climate-resilient projects.
• The appetite for green investment opportunities is growing with European and US investors, in particular, committed to increasing their climate-related holdings.