India’s Quest for Renewable Energy and the Gulf Countries

Summary

India aims to increase the share of cumulative electric power generated from renewables to 50 per cent by 2030 and achieve net zero carbon emissions by 2070. Rapid changes in the domestic and international energy market have also pushed fossil fuels rich GCC countries to reassess their approach towards renewable energy. India has deepened its renewable energy cooperation with GCC countries in recent years.

Introduction

India aims to reduce the emissions intensity of its gross domestic product (GDP) by 45 per cent by 2030 from 2005 levels. The country has also targeted 50 per cent of installed power capacity target to come from non-fossil sources including large hydropower, solar and wind energy by 2030.1 India has made big strides in renewable energy (See Table 1). The country has gradually begun to disengage its economic growth from greenhouse emissions. Some of the initiatives by the government to promote use of renewable energy include the National Bioenergy Programme, Solar Parks Scheme and Off-grid Decentralised and Solar PV Applications Programme. The government also initiated the Green Energy Corridor Project on 6 January 2022.

With respect to solar energy, the Government of India launched the National Solar Mission on 11 January 2010, as a key component of India’s National Action Plan on Climate Change. As part of the mission, 100 GW grid-connected solar power plants were installed by 2022.2 Additionally, various schemes have also been introduced to promote solar energy, namely, the Solar Park Scheme, CPSU Scheme and Grid Connected Solar Rooftop Scheme, to name a few. India, along with France, has also launched the International Solar Alliance (ISA) in 2015.

India has invested in hydropower projects, both large and small. It is the fifth largest producer of hydro energy in the world, with an installed capacity of 45,699 MW, as on April 2020.3 The government in 2019 declared Large Hydro Projects (>25 MW) as Renewable Energy source and issued tariff rationalisation measures for bringing down hydropower tariff as well as introduced budgetary support for flood moderation/storage hydroelectric projects (HEPs). 4

In addition to solar and hydro power, India has achieved a total capacity addition of 1,761.28 MW of wind energy between January and October 2022. In order to become a global hub for Green Hydrogen production and export, the National Green Hydrogen Mission was launched on 15 August 2021.5 Under this, a production target of 5 MMT annually of green hydrogen has been set.6

Thus, the government has actively pursued the adoption of renewable energy in its quest to achieve the target of reducing carbon intensity to less than 45 per cent by the end of 2030.  It also aims to increase the share of cumulative electric power installed from renewables to 50 per cent by 2030 and achieve net zero carbon emissions by 2070.7

The Union Budget (2023–24) allocated Rs 35,000 crores towards green energy transition.8 The use of Sovereign Green Funds for financing the clean energy transition has also been emphasised. Additionally, the government has introduced measures including promotion of priority capital investment towards energy transition, providing interstate grid integration, setting up compressed biogas plants and revision of indirect taxes for encouraging green energy.9

Through its G20 presidency, India can collaborate with partner countries in advancing technological and capacity-building solutions. The G20 Energy Transitions Working Group can be effectively used towards this end. India can also promote global alliances to speed up the adoption of clean fuels. Under its commitment to the principle of Lifestyle for Environment (LiFE), India can contribute immensely towards facilitating the transition from fossil fuels to renewable energy alternatives.

Renewable Energy and the Gulf Countries

Rapid changes in the domestic and international energy market have also pushed fossil fuels rich GCC countries to reassess their approach towards renewable energy. Firstly, renewables are the most efficient solutions to climate change issues with the potential to reduce emissions of CO2 by 136 million tonnes in the GCC region.10

Secondly, regional electricity consumption in the Gulf countries is growing at almost 8 per cent a year. This basically means that the generating capacity must be doubled every decade. In the next 10 years, the Gulf countries will require additional 100 GW power to cater to their energy demands.11 Thirdly, according to IRENA, adoption of renewable energy has the potential for creating more than 2,00,000 jobs by 2030. While solar technologies would account for 89 per cent of the new jobs created, rooftop solutions could provide employment to 23,000 people.12

The UAE has committed to 50 per cent clean energy by 2050, twice its existing pledge, at the UN Climate Action Summit in New York.13 To diversify its energy mix, the UAE has set up three of the world’s largest solar plants, including Noor Abu Dhabi Solar Park and Mohammed bin Rashid Al Maktoum Solar Park.14 In 2022, state-owned Abu Dhabi National Oil Company, Taqa, entered into a partnership with holding company Mubadala to become shareholders of Masdar (a renewable energy company) to expand exclusive renewable energy capacity.15

The Emirates Green Building Council developed the Energy Efficiency Program in 2013 to carry out energy efficiency retrofits of existing inefficient buildings in order to reduce the UAE’s carbon footprint.16 The UAE has also initiated the Abu Dhabi Hydrogen Alliance in January 2021 to develop a green hydrogen economy in the UAE and advance green and blue-hydrogen alternatives in emerging international markets as well.

Other GCC countries have also attempted to expand their renewable energy base. To achieve 50 per cent of its target under its National Renewable Energy Action Plan, Bahrain initiated the construction of the Askar Solar Power Plant which shall generate 100 MW through solar energy. Kuwait launched the Shagaya Phase 1 renewable energy project in 2019, phase 2 of which shall be Kuwait’s largest solar project.

In Oman, stakeholders such as the national oil company, government, private and academicians have all been looped in to develop renewable energy projects, both at the small and large scale. Homeowners as well as industrial and commercial establishments are encouraged to sell surplus electricity generated from renewable sources to electricity distribution companies under the ‘Sahim’ scheme. Additionally, Oman has also developed a 500 MW solar energy project in Ibri in 2021.17 Other GCC countries such as Qatar have actively explored alternative energy sources in line with the targets set by them.

India and GCC Renewable Energy Cooperation

In the last few years, India has deepened its renewable energy cooperation with GCC countries. On 3 October 2021, the UAE made a commitment to invest US$ 75 billion sovereign funds in India as a part of their collective vision towards clean energy.18 In addition, India and the UAE are jointly working to begin manufacturing equipment for solar power.19 On 13 January 2023, India and the UAE signed an MoU to collaborate on green hydrogen development20 and the laying of an undersea cable connecting India to the UAE under Prime Minister Modi’s ‘One Sun, One World, One Grid’ initiative.

India and the UAE are close to entering into an agreement for interconnecting the UAE and Indian electricity grid.21 On 25 January 2023, India and UAE agreed to explore avenues to collaborate on nuclear energy and opportunities in the Indian Ocean region.22 Under I2U2, India–UAE are working together to advance a hybrid renewable energy project in the state of Gujarat wherein the UAE-based companies are on a look-out for opportunities to serve as critical knowledge and investment partners.23

With respect to Saudi Arabia, its membership of the International Solar Alliance (ISA) along with Bahrain, UAE and Oman, can and should be leveraged to take forward the ISA’s mission and establish deeper collaboration with India in the solar energy domain.Saudi companies such as Al-Jomaih and Al-Fanar have invested in solar and wind energy projects in India. Saudi company Al- Fanar has stakes in a 600 MW wind power project in India which it acquired in 2018 in an auction conducted by state-run Solar Energy Corp of India (SECI).24 Furthermore, India and Saudi Arabia are exploring hydrogen as a future source of energy.25 Media reports suggest that there are talks between India and Saudi Arabia to link the Gujarat coast with West Asia through a deep-sea cable, creating a renewable energy grid.

India’s ACME Group has signed a project for green hydrogen with Oman as part of a plan by Oman’s Public Authority for Special Economic Zones and Free Zones to incentivise investment in clean energy.26 Similarly, in July 2018, India and Bahrain signed a MoU to promote bilateral cooperation in the field of renewable energy and formed a Joint Working Group for the same. On 5 February 2021, the first meeting of the Joint Working Group was held virtually.27

Conclusion

The rapid pace of global warming and increased vulnerabilities to climate change has pushed the international community to look for environment-friendly and clean renewable energy alternatives. Despite having the second largest population in the world, India has ensured that its per capita CO2 emissions remains lower than the global average (1.8 tonnes per capita).28 India has thus been at the forefront of the adoption of renewable energy alternatives for the last few years and plans to install 500 GW of renewable energy capacity by 2030.29

India has deepened renewable energy cooperation with countries of the GCC in the last few years. However, there remains scope for further exploring engagement opportunities. The Green Hydrogen sector, for instance, provides opportunities for cooperation through knowledge-sharing and investments. India should continue to work towards enhancing interconnectedness with the Gulf countries as part of its efforts at abating climate change.

Views expressed are of the author and do not necessarily reflect the views of the Manohar Parrikar IDSA or of the Government of India.

• 1. “India Stands Committed to Reduce Emissions Intensity of its GDP by 45 percent by 2030, from 2005 level”, Press Information Bureau, Ministry of Environment, Forest and Climate Change, Government of India, 22 December 2022.
• 2.   “Solar Energy”, Ministry of New and Renewable Energy.
• 3. “All India Installed Capacity (In Mw) Of Power Stations”, Report, Central Electricity Authority, 22 March 2023.
• 4. “Small Hydro Energy”, Ministry of New and Renewable Energy.
• 5. “Hydrogen Mission”, Press Information Bureau, Ministry of New and Renewable Energy, Government of India, 28 December 2021.
• 6. “National Green Hydrogen Mission”, india.gov.in  
• 7.   “India's Green Energy Focus in Sync with Ongoing G20 Presidency”, The Economic Times, 4 February 2023.
• 8.   Shailja Tripathi, “Budget 2023-24: Nurturing Green Growth”, Outlook, 2 February 2023.
• 9. Ibid.
• 10. “Five Reasons Why Countries in the Gulf are Turning to Renewables”, International Renewable Energy Agency (IRENA), 20 October 2019.
• 11. “Renewable Energy in the Gulf: Facts and Figures”, International Renewable Energy Agency.
• 12. “Five Reasons Why Countries in the Gulf are Turning to Renewables”, no. 10.   
• 13. Aisha Al-Sarihi and Noura Mansouri, “Renewable Energy Development in the Gulf Cooperation Council Countries: Status, Barriers, and Policy Options”, Energies, Vol. 15, No. 5, 2022.
• 14. “UAE Energy Diversification”, Embassy of the United Arab Emirates, Washington DC, February 2023.
• 15. Ibid.
• 16. Ibid.
• 17. Aisha Al-Sarihi and Noura Mansouri, “Renewable Energy Development in the Gulf Cooperation Council Countries: Status, Barriers, and Policy Options”, no. 13.
• 18. Rajeev Jayaswal, “UAE to Invest $75bn in India, Partner on Clean Energy: Piyush Goyal at Dubai Expo”, Hindustan Times, 3 October 2021.
• 19. Ibid.
• 20. “Indian Embassy to Abu Dhabi Tweet”, Twitter, 13 January 2023.
• 21. “India-UAE to Sign Deal on Renewable Energy Grid Link: Union Minister RK Singh”, Mint, 15 January 2023.
• 22. Kallol Bhattacherjee, “India Joins UAE, France for Trilateral on Clean Energy, Counter-pandemic Steps”, The Hindu, 5 February 2023.
• 23. “Joint Statement of the Leaders of India, Israel, United Arab Emirates, and the United States (I2U2)”, The White House, 14 July 2022.
• 24. “India-Saudi Arabia Bilateral Relations”, Embassy of India, Riyadh, Saudi Arabia, February 2022.
• 25. Ibid.
• 26. Anand Gupta, “Oman Signs Land Deal For Green Hydrogen Project With India’s ACME, Report Says”, EQ International, 23 August 2021.
• 27. “1st India-Bahrain Joint Working Group meeting in the field of Renewable Energy”, Press Information Bureau, Ministry of New and Renewable Energy, Government of India, 5 February 2021. 
• 28. “Renewable Energy in India”, Press Information Bureau, Ministry of New and Renewable Energy, Government of India, 9 February 2022.
• 29. Jacob Koshy, "Plan to Install 500 GW of Renewable Energy Capacity by 2030 to Cost ₹2.44 trillion”, The Hindu, 8 December 2022.