Director General, International Renewable Energy Agency: India working well on phasing out coal, need to focus on existing schemes

Q. At COP26, there seemed to be an emerging view about phasing out coal. Have you had discussions on this with the government?

A: I think that, if for a moment, we put aside this discussion, what we have seen is that the Indian government is putting the policies that will make it possible to leave coal. This cannot be done by just closing the plant. This has to be done through appropriate policies and, I think, the main element is to decarbonise the heavy sector. So, on this, we have noticed and appreciated the building of this hydrogen mission, which can be very important to decarbonise the heavy sector. Last year, India has been able to add another 13 gigawatts of renewable energy. We have seen that it is the fourth country in the world, when we consider installing capacity of renewables. And we have seen out there that they are raising the ambition for (renewable energy capacity) from 450 to 500 gigawatts by 2030. So, there are many things that show that India is moving in that direction … India is a complex reality, it is a continent. So it’s very difficult to act and we see that the government is acting at its best to make things move in the right direction.

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Q. What are your thoughts on the need for concessional finance to boost renewable energy capacity in developing countries?

A: I think that the system is able to get the money they need. Then there is naturally the complexity of moving faster. But we don’t see financial issues as a barrier for energy transition of India. They have been able to put in place a legal environment that is favourable for investment to come. Just see how active foreign companies are to try to get the new market of hydrogen in India. So, we are quite optimistic in the capacity of the country to attract the financial resources needed. Naturally, there is also an important role for the public and then the financial concessional loans programme. We have also illustrated our initiative on the climate investment platform on the energy transition accelerator financing, which may facilitate money to come and be effective in the country. But, again, if you ask me the general thinking on this, I think India has no problem attracting financial resources it needs because it’s a very important market.

Q. How much of a barrier is the variability of renewable energy in the energy transition?

A: Sure, so the variability of the energy or the renewables in the old energy system may be a problem because the grids are not flexible or not interconnected. This is the concern. We have to also be very clear that in the old energy system, with the grid as they are now renewables, 35%, 40% or 45% may be in the system without creating problems. When we want to go further — higher than this threshold — it’s important that the grid is adapted to ensure the flexibility and the connectivity needed. And, where the role of the hydropower, batteries, hydrogen — because hydrogen could also be used as seasonal storage. All these elements have to be put together and work together to make the system function harmoniously. So, naturally, the variability is there, but is not a characteristic that may hamper the development of renewables if we adapt the actual grids and system. I also want to make clear that it is not only an added cost because of the energy transition. Because the demand is growing and the grid needs to be renewed and enlarged anyway. So, in just the case to make this happen in a way that the system could be enhanced to become more modern, to allow for more other energy to come into the system.

Q. What are policy recommendations for India for the energy transition?

A: More than focussing on one or two areas, I say they have to strengthen what they’re doing. Because, in my opinion, they are doing well. Naturally, again, everyone has to do more. But they are working on the grid. They understood how relevant hydrogen could be. They will come with a hydrogen mission, with a map that may allow them to have more hydrogen. So, they are working to decarbonise the heavy sector. They are working to export green hydrogen. They are also focussing on bio refineries because bioenergy will be one of the other elements and would be relevant in the new energy system… So all these elements are all together there. So they have to go currently to strengthen the line of work that they are following. It is at least our assessment coming from the work we are doing, our analysis on India.

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Q: Are there concerns in developing countries that increasing reliance on batteries could lead to dependence on a few countries for rare earth minerals?

A: This is a right concern but it’s not an inevitable barrier. In which sense, first of all, we call them minerals and rare earths but geologically they are not rare. So, one of the first aspects is to put in place the right policies to ensure more mining in a sustainable and environmental way. Another aspect is that we can reduce the demand of those minerals and rare earths through innovation and this is already happening. Third, these minerals are recyclable. So the circular economy is also important for diminishing demand and for avoiding dependencies from these minerals and rare earths … What is important is that the concern should be there and we have to put in place policies that may avoid falling under dependencies. But, I think, the experience over the last few years is very clear in the minds of everyone, and countries are working on this. We don’t see this as a barrier if the right circular economy policies are there to manage it.