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At a time when the global energy market is facing a drop in demand due to COVID-19 pandemic, turning immune to the situation, the renewable sector has seen a growth. An India Energy Outlook report for 2021 by the International Energy Agency (IEA) highlights that going by the current momentum, the electricity sector in India is on the cusp of a solar revolution. 

In an exclusive interview with Moneycontrol, Fatih Birol, IEA’s Executive Director expressed hope that solar energy will overtake coal within the next ten years. He also batted for the usage of hydrogen, carbon capture storage and clean natural gas to reduce the dependency on coal.

Edited excerpts: 

Q. India is talking about introducing a hydrogen mission. A lot of focus is there on solar too. How are you seeing this scenario? 

Hydrogen can make the decarbonised system much more cleaner. When it comes to solar, India is set for explosive growth. Today, less than 5 percent of India’s electricity generation is coming from solar and 70 percent from coal. Our numbers show that due to extra-ordinary cost-competitiveness of solar and right policies, renewables, mainly solar can overtake coal within the next ten years. 

It is a huge change and wonderful news for India in terms of its economy and air pollution in the cities. 

Q. What is your take on India’s steps towards making energy accessible to the common man? 

When people ask me whether or not India will be able to steer its economy and energy sector in a successful way, I say absolutely yes. I have two reasons to say this. First, when I released our first India Energy Outlook in 2015, I said India is moving to the Centre stage of world energy. Today, without hesitation I can say that India has arrived at the centre stage of the world energy. The second reason is that India added 900 million electricity connections since 2000, it has never been the case in the history of any country. In my view, it is a history written in the world energy sector. 

Implementation of LED is a big step towards energy efficiency improvement and an example for many countries and the Ujjwala program that brought clean fuel for millions of people are the reasons why I believe that India can have a much brighter, affordable and cleaner energy future. 

Q. India is targeting to become a gas-based economy. Is it a strategy in the right direction? 

Today, the share of gas in India’s energy mix is 6 percent. It is one of the lowest in the world. There are ambitions of the government to increase this. We expect growth, mainly in industry and city gas distribution, for cooking and transport sector. This can definitely improve the air quality and displace coal, which is good news. 

It is very important that this gas comes from the countries where we have control over methane emissions. I believe the share of gas in India will increase significantly. When we talk about coal, we talk about the electricity sector. But a lot of coal is used in iron and steel, cement and others, we have to decarbonise them and make them environment friendly. Gas can play an important role here. 

Q. How can India bring down the share of coal in its energy basket? 

Coal has a huge share of 70 per cent of electricity generation in India. For electricity generation, continuous support for renewables, especially solar, coupled with battery storage is needed to decarbonise the power sector. We use a lot of coal in India also for iron and steel and cement, here we can use, hydrogen, carbon capture storage and clean natural gas to reduce the dependency on coal. 

If India goes in this direction, it will not only be god for the Indian economy and energy sector, but the country can be a pioneer by setting a new model of clean growth. 

Q. With vaccines in place, do you see the global energy demand recovering?  

If we can bring the pandemic under control, we can see recovery in the global energy sector. I believe coal is very difficult to recover because of lesser emphasis on coal. The oil will recover in a few years, but renewables proved to be Covid immune in 2020. Although global energy declined by 5 per cent in 2020, renewable energy saw an increase. In 2021, it will increase significantly. 

Q. How do you rate India’s steps towards ensuring energy security? 

India is making good steps in the right direction. For example, I can remember that during the low oil prices, India was one of the countries that put a lot of oil in their stocks. Our numbers show that the reliance on imported oil in India will go up substantially as a result of road transport, especially trucks, which is a major contributor to oil imports in India. Trucks in many countries, we use for freight. I think it may be a very good idea to transfer a big chunk of it to railways, which can run by electricity. It will be good for energy security, reducing pollution and will be good for the Indian economy. 

I am following the developments in the Indian Railways sector, I can say it is an outstanding success in terms of logistical transformation to what kind of energy it is using and the way it is modernised. It can be a model for many countries. 

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The government will soon bring a bill on crypto currencies as existing laws are inadequate to deal with issues concerning them, Minister of State For Finance Anurag Thakur told Rajya Sabha on Tuesday.

Replying to a question in the Upper House, Thakur said regulatory bodies like RBI and SEBI do not have any legal framework to directly regulate crypto currencies as they are not currencies, assets, securities or commodities issued by identifiable users.

"The existing laws are inadequate to deal with the subject,” he said.

The government had formed an Inter-Ministerial Committee which has given its report on issues related to virtual currencies.

There was also a meeting of the Empowered Technology Group.The Committee of Secretaries chaired by the Cabinet Secretary has also given its report.

"A bill (on crypto currencies) is being finalised and it will soon be send to the Cabinet. We will soon be bringing a bill,” Thakur said.

In view of the risks associated with Virtual Currencies (VCs), including Bitcoins, the Reserve Bank of India (RBI) through a circular in April 2018, had advised all the entities regulated by it not to deal in VCs or provide services for facilitating any person or entity in dealing with or settling VCs.However, Supreme Court, vide judgement dated March 4, 2020, had set aside the RBI’s circular.To another question regarding Chinese companies in the country, the minister said as of now, there are around 92 companies registered in the country.

Painting a rosy picture of the economy, the finance ministry's monthly report on Tuesday said growth and inflation outlook for 2021-22 portends more than full recovery, and that the country has become the COVID-19 vaccine hub of the world.

"The structural reforms and the policy push under the Aatmanirbhar Bharat Mission along with the slew of measures announced in the Union Budget 2021-22 towards achieving broad-based inclusive growth will strengthen the fundamentals of the economy and bring it back on to a strong and sustainable growth path in the year ahead," the ministry's Monthly Economic Report said.

Growth and inflation outlook in 2021-22, "portends more than full recovery", it added. Indian economy is estimated to contract 7.7 percent in the current financial year, mainly due to the coronavirus pandemic.

The latest Economic Survey projected growth rate to rebound to 11 percent during 2012-22 while the Budget estimated real GDP to be between 10-10.5 percent. "FY 2021-22 will be the year to rebuild with the IMF projecting growth of output at 11.5 percent, Economic Survey at 11 percent and the RBI's Monetary Policy Committee at 10.5 percent.

"With the IMF keeping India's growth projections elevated at 6.8 percent in FY 2022-23, India is back as the fastest growing major economy in the world," it said. The Survey pitched for growth through counter cyclical fiscal policy emphasising that growth alone is the answer to sustaining the public debt burden of the country, the report said.

The Survey was presented in Parliament on January 29 and the Budget on February 1. The Budget implemented the counter cyclical fiscal policy by raising the target of fiscal deficit to 6.8 percent of GDP, more than double the FRBM (Fiscal Responsibility and Budget Management) target, the report said.

With the expanded borrowing programme mostly meant for funding the enhanced capital outlay, the Budget has set in place the multiplier impact on growth to support the prescribed fiscal deficit target of 4.5 percent of GDP in 2026 under the fiscal glide path. The report noted that various measures taken by the government since March 2020 against the pandemic ensured minimum loss of life.

"Early lockdown, health-infra ramp up, gradual unlocking, blanket testing, social distancing, calibrated fiscal stimulus to minimise supply side disruptions and revive demand and structural reforms pursued diligently by government since March, 2020 have now come to fruition to limit the fatality rate to globally one of the lowest at 1.2 percent," it said.According to the report, with each day ending with positive COVID-19 cases falling to new lows and economic activity levels attaining new peaks, India has worked its way around the pandemic through the will of the brave people and astute policy interventions by the government.

"The fact that complacency is far from settling in is demonstrated by India administering close to four million doses of COVID-19 vaccine within a span of two weeks since 16th January, 2021 to become the fifth largest inoculated country in the world. "India has not only become the vaccine hub of the world but has also extended assistance to more than 90 nations requesting doses for stocking up," it noted

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