The initiative bringing together hundreds of large and ambitious businesses across the globe committed to 100% renewable electricity
The latest IPCC report has sounded a red alert for humanity, reinforcing the need for even more urgent climate action. The report has set the tone and tenor for turning the tide on climate change at the upcoming COP26—the annual UN conference that will bring together businesses, governments, and civil society to expedite action towards the goals of the Paris Agreement, as part of the UN Framework Convention on Climate Change (UNFCCC).
Averting a climate crisis will necessarily entail a speedy decarbonisation of the power sector, which currently accounts for nearly a quarter of global greenhouse gas emissions. To that end, we need to shift away from coal and other fossil fuels, towards clean power about five times faster than at present.
India is key to this global climate agenda. According to IEA’s India Energy Outlook 2021, the country is projected to see the largest rise in energy demand of any country by 2040; its electricity demand is set to increase more rapidly than its overall energy demand, at around 4.7% each year.
India has already set itself up for a broad-based clean energy transition. The turnaround in the power sector is driven by, among other things, India’s ambitious policy goals, notably the target of 450 GW of renewable energy capacity by 2030. Promisingly still, India is making impressive strides toward the achievement of its clean energy goals—the country recently hit a significant milestone of 100 GW of installed renewable capacity.
The Indian private sector is similarly rising to the climate challenge while seizing attendant market opportunities. Many leading corporations have joined hands with the government in committing to a coordinated response to climate change. Such public-private synchronisation is of consequence. India’s burgeoning private sector has a crucial role to play in realising the policy ambitions for a clean and sustainable economy.
A case in point—Commercial and Industrial (C&I) consumers account for more than 50% electricity consumption in India, with this share set to increase to more than 65% by 2030. Of this, renewables make for only 6% of total electricity consumption by the C&I segment, according to research by Bridge To India, a clean energy consultancy.
In this context, the corporate uptake of renewables merits being subsumed under the umbrella of aligned public-private climate action. RE100—the global corporate renewable energy initiative bringing together hundreds of large and ambitious businesses committed to 100% renewable electricity—is stepping up to this task. Having voluntarily pledged to power their operations, in India and beyond, with 100% renewable electricity, these businesses are looking to source renewables at scale. In doing so, these businesses are plugging in with a sizeable demand—a key pillar of India’s renewable architecture.
Now with policy laying the foundation for fulfilling mutually inclusive demand and supply ambitions, RE100 in India has brought together voices of 70+ businesses operating in the country on what it will take to build an enabling regulatory landscape, toward the shared objective of decarbonising the power sector. These businesses operate across diverse sectors, ranging from heavy industry and hospitality, to retail and manufacturing—all uniting behind a unique, ambitious renewable goal, with many even encouraging uptake of clean power by other businesses, such as those in real estate fostering renewable sourcing opportunities for corporate clients renting or leasing office spaces.
The RE100 proposal has been synthesised into a set of policy asks, which cut across a variety of renewable sourcing options, including open access, rooftop solar, Indian RECs and green tariffs. While there remains a long-standing, overarching need for stable and consistent policies over an investment-friendly timeframe, the policy asks to thematically focus on specific areas for government intervention.
For instance, scaling of open access correlates with long-term visibility of a bandwidth of charges and the provision of banking. The Renewable Energy Certificates (RECs) market, on the other hand, is predominated by utilities looking to fulfil renewable purchase obligations. The voluntary purchase of RECs will go significantly up if these are treated as a tracking instrument in addition to a compliance instrument, while being extended to generators selling electricity via bilateral power purchase agreements. Similarly, designing green electricity products to have renewable energy over and above utilities’ own renewable purchase obligations will spur new capacity addition on the part of corporate consumers.
Importantly, the policy asks are underpinned by the need to balance interests of all stakeholders—utilities, in particular, faced as they are with legitimate financial concerns on losing higher-paying C&I customers.
In what signals a strong intent to align policy with the renewable ambition, the government has set the ball rolling on re-calibrating rules and regulations. From the Draft Electricity Rules, 2021, to promote renewable energy through open access, and the discussion paper on redesigning the REC mechanism, the government has been soliciting stakeholder comments for inclusive decision making.
Similarly, state regulators are taking a cue from growing C&I demand for clean energy to allow utilities to supply green electricity at a premium—Tata Power and Adani Electricity are set to supply green power to hundreds of businesses in the state of Maharashtra. Notably, the RE100 demand was cited as one of the reasons in the petition to the Maharashtra Electricity Regulatory Commission for introducing green tariffs, which bodes well for further joined-up efforts in seizing the renewable opportunity.
As the government, regulators and utilities are all coming together to pave the way for India’s energy transition, time is ripe for renewable buyers to be integrated into the country’s clean growth plans. And that’s what RE100 is seeking to do with its proposition of a comprehensive framework of policy solutions, in particular, and as a channel for engaging the biggest demand-side cohort, in general.
Such holistically coordinated climate action holds promise—something that would be worth showcasing at COP26 later this year.
Swati Madan is project officer, energy transitions, India, at Climate Group