Renewable energy is here to stay and shape our energy policy and electricity generation, says Dr Savita Gautam

With rise in economic development and the growing population in India, it is imperative that our energy needs will also increase by leaps and bounds. The Government’s policy encourages the use of renewable energy. By 2030, the renewable sources are expected to meet 40 per cent of India’s power needs, drawing the map of energy security and also reducing our carbon footprint. The sharp improvements in enhancing the role of the renewable sources will help India grow in its energy needs in a sustainable way and also fufill its international commitments made at the Paris Agreement. In fact, with the policy initiatives in place, we are now committed to reduce 35 per cent reduction in ‘greenhouse gas emissions’ below 2005 levels by 2030 a little more than our original commitments of 20 to 25 per cent.

India gets abundant supply of solar energy for an average of 360 days in a year. The Government mega projects like the solar parks, have made the financing costs of the solar industry to come down. We have been ranked second in the Renewable Energy Country Attractive Index, 2017. And have the expertise to build hydro-electric projects for electricity generation. Each of these require large investments and government’s participation. We have also expanded our wings into the sector of wind energy and now are foraying into the solar energy sector in a big way. The Jawahar Lal Nehru National Solar Mission (JNNSM) had been initiated by the Government Of India and the State Governments to promote solar power for country’s energy needs. This was started in 2010 with a mission of 100 GW solar capacity by 2022.

Emerging economies, like India have realised that leapfrogging into development with investments, technologies and capital may not be sufficient, but also doing it in a sustainable way is the wisdom of the day. As a policy, we would like to have 40 per cent of our energy needs coming from renewable sources and rest 60 per cent from coal. The energy mix for electricity generation for India’s main grid will help us in maintaining the energy balance and not creating an over-dependence on any one of them.

We live in a world of paradoxes. India is the third largest growing economy in the world, but we still have not been able to supply electricity to all our villages and also are simultaneously facing the problems of pollution and climate change. Dependence on fossil fuels for our energy requirement is adding to the agony. As the industrial activity picks up, the negative externalities of the same will need to be addressed responsibly. The renewable energy proliferation may be a recent phenomenon for India, but has no shortcomings. It is here to stay and shape our energy policy and electricity generation. We hope to have cleaner technologies, use of renewable energy and a structural change in the framework of the energy policy. Staying environmentally accountable has today become order of the day.

In 2010, the JNNSM was formed and targets were formed for electricity generation. Investments were also invited for the same. India lost a case at the Dispute Settlement Board (DSB) of World Trade Organisation against United States(US). The US had made a complaint at the DSB that the clause of Indian Government, that the ‘inputs of solar modules should be procured locally’ was considered as a Domestic Content Requirement (DCR) and was directly going against the provisions of the WTO Article III:4.

Did the policy maker go wrong in its implementation process by keeping a DCR measure? Can we not implement our national policies without hurting our international commitments? What made the US complaint against us. Inspite of our submissions at the WTO’s DSB gave a ruling against India and asked us to remove the DCR measure. Appealing to the Appellate body of the WTO also did not work for us. This proved to be a major roadblock for us. US had asked for retaliatory measures permission from the WTO for which India has also strongly resisted giving their side of arguments. It is seriously considering doing a case against US for keeping the DCR measure in eight of its states in its renewable energy sector. Panel ruling is still to be implemented by us even after the negotiated period of December 2014.

The Indian Solar Manufacturing Association (ISMA) tried if anti-dumping duties could be put against nations who were mainly exporting solar cells and modules to India but this could lead to slowing down of Indian solar energy projects in progress. The Indian Government is considering putting safeguard duty on the solar cells and modules to the tune of 70 per cent but is now reconsidering on lower duties as the same will hit the renewable energy sector and will increase the prices in the country.

The JNNSM is embroiled in controversy, depicting that we are truly global. Our own national policies priorities are coming under the cloud of our international commitments. Can we avoid this? The answer is not so simple and we must be able to move our national policies tandem with international commitments. National Treatment is sacrosanct and all the WTO members are aware of this. To be able to sustain the commitments we can argue if exceptions could be made when policies are supporting environment and sustainability or give concessions like tax breaks or zero duties for all manufacturers.The policy maker trying to strike a balance between the development work, environmental concerns and international commitments also needs support from the trade rule making body, the WTO.

(The author is an Associate Professor of International Business at FORE School of Management)