India can be a leader in green H2: IEA

11 months ago 16

Synopsis

In an interview with ET, Fatih Birol also suggested the country could increase foreign investment in green energy by simplifying bureaucratic procedures. Birol said India should look at manufacturing its own clean energy technologies, such as solar panels or electrolysers for hydrogen, and production-linked incentives schemes should be endorsed to support this.

Fatih BirolFatih Birol

India could play a pivotal role in energy transition and be a leader in green hydrogen because of the lower cost of renewable energy generation, International Energy Agency (IEA) executive director Fatih Birol told ET's Shilpa Samant in an interview. The country can increase foreign investment flow into green energy significantly if it simplifies bureaucratic procedures, he said. Edited excerpts:

What is the kind of role that India could play in the various emerging technologies for energy transition?

India can make three types of contributions to global energy transition. It needs to make its voice much stronger to highlight successful interventions in the last few years - like full electrification of villages, the Ujjwala programme (to provide LPG connection to poor households), the LED revolution, and now the solar push. It can be a source of inspiration for many countries. The second is, it could share its expertise in reaching these goals. When PM Narendra Modi met US President Joe Biden recently in Washington, there was a paragraph in the joint statement on the support to India for full membership of IEA. The third one is, there are many challenges to reaching our energy and climate goals - more renewables, hydrogen, energy efficiency. But the most important challenge is forging international collaborations in a fair and effective way. There are not many countries in terms of size, convening power, and economy that can build a bridge amongst all. I think that India can be a pivotal player in the clean energy transition.

How do you see India's energy demand going forward?
India's energy demand will be very strong because its economy is growing, and it is getting industrialised. For me, the biggest challenge for India is, how we find investments in green energy. In my view, India is perhaps the number one country in terms of foreign investments for three reasons - you have the rule of law, there is political and economic stability, and there is huge potential for energy demand growth. If India is able to simplify the bureaucratic procedures of investment flows, we will see foreign investment flowing in India significantly.

The G20 Energy Ministerial has agreed on low-cost financing to facilitate energy transition. What concrete measures do you think are needed on that?
The agreement is good, but we must materialise it. I believe that international financial institutions, regional financial institutions, and development banks should take reducing the cost of capital for clean energy in developing countries as a priority and provide some concessional funding to them.

The Russia-Ukraine war has brought energy security to the fore. Do you see it as a headwind for energy transition?

Many people understand that the more energy you produce at home, especially clean, the better it is for security. For example, if you are generating solar and wind, you are going towards clean energy. On the other hand, you are going to import less. The driving force behind clean energy is not only sustainability and climate change but also energy security. It is the reason clean energy is moving fast, and faster than many people think.

You have advocated for developed nations to support the developing ones in the energy transition. Do we see any tangible advancement towards it?
Clean energy investment around the world is growing very fast, but in the developing world, it has been flat in the last five-six years. Around $1.7 trillion investment has been made in clean energy as of today from $1 trillion in 2015. But almost all the growth came from the advanced economies and China. To address climate change, we need this everywhere.

Green or low-carbon hydrogen is potentially seen as the fuel of the future, where India aims to be a leading producer. Do you see it progressing on that?
India is a top runner for green hydrogen because the cost of generating renewable energy is one of the lowest in the world. But what it needs to do, in my view, is to look at the manufacturing side of clean energy technologies - it can be solar panels or electrolysers for hydrogen. India should have its own manufacturing and, therefore, production-linked incentives schemes should be endorsed.

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