Vienna, AustriaIndia is in the midst of the “largest energy transformation project in the world" organizers of the Vienna Energy Forum declared, while introducing the keynote speaker, India’s Energy Minister Piyush Goyal on May 11.
“Everything changed in 2015 with the Paris climate agreement. We must decouple economic growth from environmental impacts and leave a better world,” said Goyal, to loud applause from the 1650 energy experts and government officials in Vienna. “Every moment counts.”
“I’ve never heard such visionary and progressive remarks from a world-leading country,” the Prime Minister of Tuvalu, Enele Sopoaga, told me afterwards. The small Pacific island country is barely ten feet above sea level and rising water levels resulting from climate change have forced thousands to leave the country already.
“India sees the urgency of climate action,” said Sopoaga.
India is in a big hurry to green its energy system to create jobs, improve the quality of life for its citizens, clean the air and water and, yes, tackle climate change, its leaders say. Keep in mind this is a country with 1.3 billion people, nearly 300 million of whom do not have access to electricity and where the average income is $1,600 a year.
Now mainly powered by coal, India is adding 50 percent more solar and wind than the U.S. currently has installed. It is replacing 770 million street and household lights with energy-saving and long-lasting LEDs and bringing electric access for the first time to tens of thousands of poor rural villages. And India is already doing all of this faster than anyone believed possible.
“India is the poster boy for clean energy… showing this is not a burden, just the opposite,” said Vivien Foster, an energy economist at the World Bank. “It’s a great opportunity.”
A Lighting Revolution
The LED lighting replacement for the entire country is hoped to be finished by 2019—just four years after the program was announced in 2015, shortly after Prime Minister Narendra Modi was elected. Prior to that India was committed to using coal to develop its economy, just as China had done 25 years ago. But now Modi is trying to hitch India’s future to 21st century technologies.
The energy savings from replacing 770 million household and street lights will cut India’s peak electricity demand by 20,000 megawatts (MW) and slash emissions of climate-heating CO2 by nearly 80 million tonnes annually. That’s almost as much as Chile’s CO2 emissions in 2015. This drastically reduces the need to build more energy plants and will save $7 billion a year.
And all of this has been accomplished without government funding.
India is a leader in a type of business called an Energy Service Company (ESCO), which makes money only on energy costs they manage to save their customers. Government power utilities set up an ESCO company called Energy Efficiency Services Limited, which has made nothing but profits since its inception. This company has worked with LED manufacturers to drive the costs of these lights down 85 percent in less than three years. Now India gets the world’s lowest price, Goyal said in an interview.
Energy Efficiency Services Limited (EESL) has been so successful it just announced a three-year, $130 million investment in the United Kingdom, to tap into the estimated $8 to 10 billion energy efficiency market there. EESL aims to capture much of this by promoting and implementing low-carbon, energy efficiency, and renewable energy solutions along with LEDs.
There is nothing like a national LED conversion program in the U.S. However, many U.S. cities are converting streetlights to LEDs to save millions in energy costs—but it has been slow going. Chicago’s Smart Lighting Project to replace 270,000 light fixtures just launched in April and won’t be completed until 2021. In Washington, D.C., 71,000 streetlights may be replaced under the “Streetlight Modernization Project,” but it will only start in 2018.
India’s renewable energy sector is also growing at lightning speed. At the December 2015 Paris climate conference, Modi astonished many by announcing India would add 160 gigawatts (GW) of wind and solar by 2022 to the existing 26 GW. The U.S. currently has just over 100 GW in total. One GW can power 100 million LED lightbulbs used in homes.
“This is an ambitious goal,” says energy expert Niklas Höhne, a founder of NewClimate Institute, a European research center. “There is significant momentum and now two Indian states are considering 100 percent renewable energy, which is remarkable.”
“Green energy is no longer expensive or difficult to build and it is well-suited to our needs,” said Goyal. Given all the benefits, every country should be taking the same path, he said.
India’s solar and wind boom has pushed costs off a cliff, falling from 12 cents a kW/hr to just 4 cents a kW/hr for solar. This is cheaper than coal. As a result, Goyal hope that no new coal power will be needed after 2022. One analysis suggests some of India’s existing coal energy is more expensive to generate than building new solar. India may soon end all imports of thermal coal, Goyal believes.
This gains are especially impressive given India’s substantial economic and social challenges, says Höhne.
As for those 300 million with no access to electricity, that too is changing. The last household will be connected by 2019, Goyal believes, three years before India’s 2022 target.
“Prime Minister Modi grew up poor. He knows what it is like to not have electrical power. He is completely committed to making this happen,” Goyal said.
India’s energy revolution may soon transform the country but it is also creating “solutions that other countries across the world can replicate and use to support their own sustainable energy transition,” said Rachel Kyte, CEO for Sustainable Energy for All and Special Representative of the UN Secretary-General.
Electric cars are the next big thing India hopes to jump on. It commissioned a study on how the country’s entire fleet of vehicles could be 100 percent electric powered by 2030. This is not an official government target yet.
But by that date, Goyal believes electric cars will be the only vehicles sold because of low operating costs, little maintenance or repairs needed, along with a long life. The batteries will also work very well with solar and wind as energy storage devices. No subsidies will be needed, he said, since India already taxes gasoline at about the world average—50 percent higher than the U.S. does.
“We are doing all of this even if no one else is. We have a big role to play in the fight against climate change,” Goyal said.