Indian industrialist Gautam Adani. Photo: AFP

“We are going to exit the fossil fuel era. it is inevitable.” – Elon Musk

International lawmakers, heads of state, business leaders, and activists gathered in Glasgow this month to tackle the issue of climate change. The focus of the COP26 summit was to ensure a smooth (if slow) transition to a low-carbon global economy.

Coal-fired power generation is one of the largest sources of greenhouse gases and a major contributor to air pollution. More than 90% of planned and more than 70% of the existing coal-fired capacity is in developing countries, including China and India.

The US, the second-largest emitter, has set 2050 as the deadline to reach net-zero and it says it will decarbonize its power sector by 2035. China, the world’s largest carbon emitter, has announced it will be carbon-neutral, or net-zero, by 2060.

Carbon neutrality is a state of net-zero carbon-dioxide emissions. But before the Glasgow summit, the rich countries were piling pressure on India to set a deadline to take its carbon emissions to net zero, as India had neither announced when it plans to reach net-zero nor has submitted an updated climate plan every five years as required by the Paris Agreement.

Surprisingly, Prime Minister Narendra Modi announced a bold pledge that India will achieve net-zero carbon emissions by 2070. Calling this a “gift of five elixirs,” Modi announced India’s four other commitments, namely increasing non-fossil energy capacity to 500 gigawatts, fulfilling 50% of energy requirements from renewable sources, reducing the carbon intensity of the economy by 45%, and reducing total project carbon emissions by 1 billion metric tons by 2030.

India Inc says it welcomes Modi’s pledge to achieve net-zero emissions by 2070. But India is at a unique crossroads. It is a developing country relying heavily on coal to meet about half of its primary energy demand.

Structural changes and accelerants required to steer this transformation will be quite challenging without significant technical and financial support. As well, China had pulled more than 99% of its population out of poverty before it set the 2060 net-zero target. But India is currently in no position to meet the twin challenges of pulling hundreds of millions of its people out of poverty as well as providing clean energy to its huge population. So the cost required for the transition to a green economy is huge.

The nation will need progressively to reduce coal’s share in electricity generation, currently at about 65%, and remove it altogether by 2050. To meet its goal of net-zero, or be able effectively to eliminate carbon-dioxide emissions by 2070, India will need close to US$10 trillion, according to the Centre for Energy Finance.

A total of $8.5 trillion would be needed significantly to scale up generation from renewable energy and bring together the necessary integration, distribution, and transmission of that energy; $1.5 trillion would have to be invested in the industrial sector for setting up green hydrogen production capacity to advance the sector’s decarbonization. Green hydrogen is made from renewable energy and can be used for many things, from heating to charging batteries as well as fueling vehicles.

It is no coincidence that Modi’s two key businessman friends Gautam Adani and Mukesh Ambani earlier this year pledged to make their businesses carbon-negative by 2030 and 2035 respectively.

Ironically, both are investing tens of billions of dollars in renewable technologies as they compete to dominate the country’s new green economy. The idea is simple: to become the key pillar of the new green economy.

Race to control India’s future energy market

Mukesh Ambani and Gautam Adani have made their fortunes with carbon-based energy. Now they want to change their wheel of fortune through green hydrogen. Both are writing billion-dollar checks in their race to shape India’s energy future.

Ambani is setting up four new factories in the Jamnagar district of Gujarat, one each for solar panels, batteries, green hydrogen, and fuel cells. In June, Ambani announced an investment of $10 billion in clean power and hydrogen fuel over three years.

Three months later, Gautam Adani announced his own green vision, stating that the Adani group will invest $20 billion over the next 10 years in renewable energy generation and component manufacturing.

But Ambani was quite late in entering into the green-energy race. For years, the Adani Group produced coal-fueled power at large plants like the one in Mundra, Gujarat. But in the last three and half years, Adani has swiftly assembled a 20GW solar, wind and hybrid electricity portfolio.

But Ambani is catching up, aiming to capture 100GW of solar manufacturing or a third of India’s market by the end of the decade. With a $1.14 billion acquisition for two firms in a single day, Mukesh Ambani is going ahead aggressively on green energy.

He first bought REC Solar Holdings AS for $771 million and then added Sterling and Wilson Solar to his acquisition portfolio with a 40% holding. His Reliance New Energy is also planning to invest $29 million in Germany’s NexWafe and use its technology to build photovoltaic solar-wafer plants and tie up with a Danish company to make hydrogen electrolyzers (which use electricity to break water into hydrogen and oxygen) in India.

Ambani’s efforts toward building electrolyzers are meant to compete in the power supply sector in the future, where rival Adani is stronger. Adani Power has reached the initial target of 25GW, a full four years ahead of schedule. Recently it acquired SoftBank’s India renewable-energy unit for $3.5 billion, one of the biggest such acquisitions globally. More so, Adani’s dominance over the transportation sector will be a bigger challenge for Ambani.

With huge ambitions, the two billionaires are battling to increase their share in India’s green economy. However, there is no denying the fact that the biggest losers will be hundreds of millions of poor people who hardly see the opportunities and growth enjoyed by their Chinese counterparts, and they are the ones who are going to pay the price of Modi’s lofty promises.

Ravi Kant

Ravi Kant is a columnist and correspondent for Asia Times based in New Delhi. He mainly writes on economics, international politics and technology. He has wide experience in the financial world and some of his research and analyses have been quoted by the US Congress and Harvard University. He is also the author of the book Coronavirus: A Pandemic or Plandemic. He tweets @Rk_humour.