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India’s surging economy could doom climate efforts—unless richer nations step up

No matter how fast the country builds new solar and wind farms, that alone won’t be enough.

April 24, 2019
Photo collage showing a landscape with wind turbines in the distance and a close up of a solar panel.
Photo collage showing a landscape with wind turbines in the distance and a close up of a solar panel.Photographs by Saumya Khandelwal

In the flat terrain of eastern Karnataka, deep in the interior of the Indian subcontinent, you don’t see the Pavagada Solar Park coming. But when it appears, on the far side of a dusty little village, it is, all at once, everywhere.

Dull gray panels unfold in all directions from the barbed-wire fences lining the road, forming a city of silicon that stretches across 20 square miles (52 square kilometers).

When it’s complete, the more than $2.5 billion project, three hours north of Bangalore, will be one of the largest solar parks in the world. The millions of panels will be capable of pumping out 2 gigawatts of electricity from this sunbaked stretch of India, the equivalent of a pair of large nuclear power plants.

At least two other solar parks in the works in India promise to be even bigger: a 5-gigawatt project in the state of Gujarat and a 2.3-gigawatt one in Rajasthan.

India has recently completed or approved dozens of giant solar and wind projects, nearly doubling its renewables capacity since 2015. For the last two years, it was the fastest builder of solar projects on the planet after China. All told, the country has around 75 gigawatts of solar, wind, and other renewable sources installed—and more than 45 gigawatts in the pipeline.

In 2015, government officials announced plans to more than quadruple renewables capacity, setting a target of 175 gigawatts by 2022. Later that year, under the Paris climate accords, India committed to produce 40% of its electricity from clean sources and cut emissions intensity (the level of carbon dioxide produced per unit of GDP) to at least 33% below 2005 levels by 2030.

Photo of a wind turbine with a small vehicle in the foreground
A Suzlon Energy turbine operating at ReNew Power’s Veerabhadra wind project in Andhra Pradesh.
Saumya Khandelwal

India is now a shining case study in how rapidly generation of renewable power can expand with government investment and support, even in a deeply poor country. But it also underscores the fact that adding clean energy and cutting climate emissions aren’t the same thing.

For India to achieve the latter, clean energy would need to replace—not simply augment—coal, which currently generates nearly 55% of the nation’s electricity. And that’s not happening anytime soon in one of the world’s fastest growing and fastest urbanizing economies.

India’s GDP could more than quintuple by 2040, more than doubling its energy demand, according to the International Energy Agency. That would represent roughly a quarter of the total global increase over that period. Air-conditioning units alone could increase by 15-fold, as citizens become better off and cities grow hotter.

“However much renewable energy we build, it won’t eat into thermal,” says Sumant Sinha, founder and managing director of ReNew Power, a wind and solar developer that built several projects within the Pavagada Solar Park. “The reality is that India’s emissions will increase very substantially going forward.”

As many as 90% of rural households in many villages still aren’t wired, and even those that are may get power only a few hours a day.

Estimates vary widely, but the IEA expects that carbon emissions from India’s power sector will rise 80% through 2040 even with the renewable generating plants currently planned. By then India could overtake the US as the world’s second largest emitter, undermining efforts to curb global warming. If India can’t pull off the necessary reductions, even with its substantial policies and investments, it means that wealthy nations will need to step up their efforts even more.

Driving development

In the initial decades of international wrangling over climate action, India clung to an attitude of “common but differentiated” responsibilities, arguing (not unreasonably) that developed nations, as the world’s biggest emitters historically, have the “primary obligation to take action,” according to an analysis last year in the Annual Review of Environment and Resources.

That began to change under the last government, but it shifted rapidly after Prime Minister Narendra Modi’s Bharatiya Janata Party took power in 2014. The nationalist government recognized renewables as an opportunity to address overlapping public and political concerns, including energy security, international prestige, air pollution, and climate change—and roughly in that order.

Initially, the country focused on feed-in tariffs, a policy tool designed to drive new projects by guaranteeing set prices to energy producers for years. But the primary tactic now is for federal and state agencies to auction off the right to build a certain amount of new wind or solar generation.

Photo of a farmer in his family owned farm that is now using a solar powered irrigation system
Pranesh Krishna Murthy manages a family-owned farm south of Bangalore. After installing a solar-powered water pump and drip irrigation, they’ve been able to cultivate more land and thirstier crops like watermelons and bananas.
Saumya Khandelwal

These auctions have sparked aggressive bidding wars, driving down the price of renewable generation in India. Solar bids have reached levels as low as 2.44 rupees (around 3.5 US cents) per kilowatt-hour, in line with the subsidized price for large solar farms in the US.

In many cases, state-sponsored companies have also created massive “plug and play” parks, taking care of land acquisition, permitting, and other headaches on behalf of project developers. “The infrastructure is at your doorstep, and all you have to do is bring your panels, plug in, and go,” says Kanika Chawla, senior program lead at the Council on Energy, Environment and Water in New Delhi.

This, plus the fact that the government enforces long-term power purchase agreements between power generators and utilities, has helped lower risks, lure developers, and drive down capital costs.

In the case of the Pavagada Solar Park, the state-run Karnataka Solar Power Development Corporation obtained the land by striking lease deals with nearly 3,000 local farmers in Pavagada, a cluster of villages in the northeastern part of the state. Years of drought had drained the plains, depressing the water tables by hundreds of feet. Nearly all the region’s farmers, once known for growing peanuts, now leave their lands fallow. Many have migrated to swelling cities like Bangalore or Hyderabad, seasonally or permanently, in search of work as porters, touts, or waste sorters.

Karnataka Solar agreed to pay landowners around 21,000 rupees ($300) per acre (0.4 hectares) annually for their sun-rich, water-poor property, a price that ticks up 5% every other year over a 25-year term. That’s about three times the profit in their best years from growing peanuts, says Seshagiri Rao, an agronomist in Bangalore, who is from Pavagada. Proposing a lease rather than a sale also helped close the deal for many of the area’s farmers, for whom holding onto and passing along their heritage lands was important.

Six companies successfully bid for the rights to finance and build projects within the park, including Fortum, Tata Power, and ReNew. With the development work out of the way, it took only three to four months to get each of ReNew’s three projects online, says K.S. Viswanath, the company’s top executive in Karnataka.

When I visited in early March, yellow forklifts were driving across the leveled field of the company’s final, 150-megawatt block, dropping pallets of solar panels in the rows between naked racks. Workers returned to the fields in the mid-afternoon, after the worst of the midday heat. Two by two, they lifted the panels and bolted them into place.

The Pavagada Solar Park was around 70% complete at that point, which is a little behind schedule, but the full project is likely to come online by the end of this year.

A problem of transmission

Photo of a farmer showing his solar irritation system
Saumya Khandelwal

India has shown that a developing nation can rapidly add clean energy, at costs below those associated with coal plants, while still expanding its economy and creating jobs.

“The scale of renewables that India is trying to add in seven years took Germany two decades,” says Arunabha Ghosh, chief executive of the Council on Energy, Environment and Water. “And we’re doing it much earlier in our development.”

But India is not Germany. It’s still likely to take decades before the nation’s renewables start to replace coal and bring down emissions, given how fast energy needs are growing and how hard it is to integrate intermittent sources like wind and solar.

To date, India has largely been harvesting the “low-hanging fruit” of the clean-energy transition, adding low-cost renewables on top of existing infrastructure, says Rahul Tongia, a foreign-policy fellow at Brookings India. But growing amounts of wind and solar generation, both of which fluctuate dramatically, will place increasing strains on the nation’s grid.

This is true everywhere, but it will be a particular challenge in India, given the shoddy state of transmission and distribution infrastructure—and the fact that the nation is building so many megaprojects, which can flip on and off all at once as the sun sets, clouds pass, or the wind dies.

Integrating this much variable generating capacity—which at the targeted 175 gigawatts will represent nearly 20% of the electricity mix—will require more coordination, better policies, and upgraded transmission lines to swap electricity across states, Tongia and his colleagues concluded in a Brookings report late last year.

Photo of a group of men installing new solar panels
Workers at the Pavagada Solar Park place panels onto racks at ReNew Power's final project within the 20-square-mile site in eastern Karnataka.
Saumya Khandelwal

But cutting deeply into India’s carbon emissions would demand a radical and expensive overhaul. That would include developing a much more flexible, modern grid; adding huge amounts of storage; and implementing market-based reforms, like time-of-day pricing, that let utilities and customers react quickly to shifting levels of supply and demand.

And, of course, it will require far, far more renewable energy plants or other sources of clean power. Tongia estimates that India would need to add about 500 gigawatts of renewables capacity by 2030, nearly seven times the current total, just to meet the growth in demand without building new coal plants.

That’s simply not going to happen, so coal “will be essential to meet ever-growing power demand,” he wrote in a paper in March.

One of the biggest obstacles to further progress is that the nation’s utilities can’t afford the necessary investments. Electricity theft is rampant, households and farmers are heavily subsidized, and businesses, which pay inflated rates, are starting to look for ways to flee the system—by buying power from other suppliers or setting up their own solar projects.

In fact, the struggling utilities can barely maintain existing infrastructure. They resist connecting and servicing areas where they won’t meet their costs, and shut off power at times when supplies are tight or simply to save money.

Last spring, following a three-year, $2.5 billion government-funded effort to link transmission lines to the most remote parts of the country, Modi trumpeted that “every single village of India now has access to electricity.”

But the government set a low bar, ticking the box so long as 10% of households in a village, and institutions like schools and hospitals, were connected. That means as many as 90% of rural households in many villages still aren’t wired, and even those that are may get power only a few hours a day. At least tens of millions of Indians still lack electricity.

Fixing all this is likely to require far more funding and a broad regulatory overhaul, including penalties for utilities that fail to provide power and reforms that move prices closer to market rates. But the latter is an extremely unpopular notion in India, where the belief that the state should deliver cheap power is deeply held, dating back to the earliest promises of independence.

A metal shed used for blacksmith work that's fitted with a solar panel
A solar panel rises from the edge of Ji's metal shed. It's only 10 steps from a utility pole, but he doesn't have the necessary paperwork to obtain electricity.
Saumya Khandelwal


In Halaguru, a small town south of Bangalore, a blacksmith named Sidhappa Ji hammers glowing orange beams into sharp-edged sickles, in a hot metal shed 10 steps from an electricity pole. But because he doesn’t have legal documents for the property, he can’t obtain electricity, a problem shared by many in India’s slums.

Selco, a Bangalore-based social enterprise, has been working on the opposite end of the spectrum from the gigantic parks, supplying solar panels, batteries, and other tools to homes, farms, and businesses in rural villages.

Photograph of Sidhappa Ji, a blacksmith who is using a solar-powered blower to stoke his fire
Sidhappa Ji, a blacksmith in Halaguru, hammers metal beams into sickles, using a solar-powered blower supplied by Selco to stoke his fire.
Saumya Khandelwal

Through its foundation, the organization develops customized solar-powered tools for micro-entrepreneurs, including the blower that Ji uses to stoke his fire. The nonprofit has also created water pumps, photocopiers, and cattle-milking contraptions that run directly off solar panels and batteries, and it’s working on chili-powder pounders, banana-chip choppers, and puffed-rice puffers.

Given the country’s sprawling scale and fragmented grids, decentralized renewable power will need to play a large role in electrification, says Pratim Raha, a program manager at the Selco Foundation. That, in turn, will also ensure that clean energy sources can account for as much as possible of the projected rise in energy consumption in the decades to come.

“If your narrative is ‘The grid will come and solve all problems,’ that’s not right in India,” Raha says.

"The burden of adjustment"

All the complexities discussed so far concern the challenge of slowing emissions from electricity generation. India has barely even begun cleaning up other climate-polluting sectors, including transportation, industry, and agriculture.

If the nation can’t bring down emissions as a whole before 2040, it presents a global danger. The UN’s climate-change body has concluded that the world needs to cut carbon dioxide emissions 45% from 2010 levels by 2030, and eliminate them entirely by midcentury, to have a decent chance of preventing 1.5 °C of warming. India is the world’s fourth largest emitter, contributing 7% of emissions, behind China (27%), the US (15%), and the European Union (10%), according to the Global Carbon Project.

But it’s fundamentally unfair to ask the country to cap its climate pollution and stunt its growth now, given that richer countries have pumped out far more carbon dioxide to get to where they are today. They’ve enjoyed decades of accumulating economic growth thanks largely to cheap fossil fuels.

India’s per capita energy consumption is around one-tenth of America’s—and even if it doubles by 2030, it will be only half what China’s was in 2015, according to a recent analysis led by Navroz Dubash, coordinator of the Initiative on Climate, Energy, and Environment at the Centre for Policy Research in New Delhi.

By any analysis, India needs to consume more energy just to provide reliable electricity to all its citizens and lift hundreds of millions of them out of poverty. And as its summers get hotter, air-conditioning will increasingly become not a luxury but a public-health necessity.

“India is a deeply poor society and a deeply energy-poor society,” Dubash says. “We’re not making the argument that therefore we should do nothing [to reduce emissions]. But you cannot ignore that when you think about the burden of adjustment—and how that should be distributed around the world.”

In other words, if the world truly hopes to avoid shooting past dangerous warming thresholds, richer nations will need to cut faster and deeper to offset those that are less developed, or just too impoverished to decarbonize quickly. Arguably, wealthier countries should also help poorer ones reduce emissions, whether that’s by providing low-interest capital or subsidized technology, or by developing cheaper clean-energy solutions. If they don’t want to do it because it’s the right thing to do, then they should do it for the self-interested reason: climate change doesn’t recognize borders.

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