Low-carbon energy solutions in India may depend on Tata
Amid analysis of the G8’s latest climate pronouncement, the announcement of India’s first national climate action plan received less attention than it otherwise might have. Even in the Indian media, the plan was also overshadowed by the release of a McKinsey & Co. report that projects massive power demand growth in the country — 100 gigawatts more demand in the next 10 years than previously estimated. Yet the very same day, the government’s Investment Commission called the “Ultra-Mega” coal plants that are central to India’s strategy to meet that demand a “main reason for persistent capacity shortfalls.”
As reported by India’s Financial Express, the climate change “National Action Plan” consists of a laundry list of programs to be initiated — or more likely, repackaged — on solar power, energy efficiency, agriculture, and a few others. Based on previous performance in the power sector, agriculture seems to be the most promising of those programs (especially considering the Indian government’s success in raising productivity during the Green Revolution). One can hope India will have the same success, and be able to utilize the same distribution mechanisms, in efforts to create seed varieties adaptable to drier climatic conditions.
If McKinsey is right, India’s demand will soar to 315-335 GW by 2017, from 120 GW installed capacity today. To supply that demand reliably would require over 415 GW of installed capacity — that’s triple what the creaky Indian power sector produces now. And about 10 times what even the dozen planned Ultra-Mega plants could hope to supply.
The report identified 10 more or less monumentally difficult tasks for the Indian government to carry out [PDF], including cutting transmission losses in half, building 30 GW of solar, and training 300,000 workers. But the real challenge in India — just to meet power demand but especially if it is to be done with low-carbon energy — is hinted at by the fact that several of the recommendations are purely regulatory in nature. This includes creating a wholesale electricity market and speeding up approval of power plant construction. Yet these may prove the most difficult to enact.
In China, a main task is to redirect massive power sector growth toward cleaner sources. In India, a major challenge is simply getting anything coordinated happening. As if on cue, India’s Investment Commission also chided the Indian government for the fact that national electricity reforms initiated in 2003 have only moved forward in five states.
There seems to be one man at the symbolic center of all this: Ratan Tata, who heads the Investment Commission that has called out the government’s “obsession” to build Ultra-Mega coal plants. He also chairs the Tata Group, which owns Tata Power, the builder of the Tata Mundra Ultra-Mega plant. In India, you also can drive your Tata Nano, wearing Tata gold jewelry and talking on your Tata Indicom cell phone, to buy Tata iodized table salt. The expansive nature of the Tata Group and other powerful Indian conglomerates shows where the real coordinating and scaling capacity in India lies.
If India’s power demand growth is going to be met, it seems that it will only be done if companies like Tata succeed in their efforts to pry open the previously government-controlled power sector. And if low-carbon energy development is to happen, it’s hard to have much faith in plans issued by a government that has never failed to fall short of energy goals. Instead, hope that Ratan Tata and Indian energy entrepreneurs of all kinds look a little further past Ultra-Mega plants to the business possibilities of 100 extra gigawatts of solar and other low-carbon energy sources.