Addressing climate change will be challenging, for both India and U.S. in different ways, as we transition away from economies based on fossil fuels, says, David W. Cash, Ph.D., Fellow, Harvard University and Former state utility and environment commissioner of Massachusetts, USA, recounting his own experience during an interaction with Buildotech on his recent visit to India.
Eight years ago, the state government of Massachusetts (a small state with a population 6.5million) worked with the high-tech sector, universities, the investment community, municipalities and non-governmental organizations to re-write the energy reality. We harnessed markets, brought regulations into the 21st century and tried innovative policies. We encouraged new financing mechanisms as also opened the door for innovators to innovate and business people to grow businesses. Our goal was to take an outmoded energy system that was steeped in a 100 year history and unleash companies and entrepreneurs, cities and towns and customers to deploy solar and wind power, buy electric vehicles, build smart grid infrastructure, develop new storage technologies and invest in a cleaner, more reliable and stable system.
The results have been astonishing and it proves the notion that economic development and environmental protection can go hand in hand. In 2007, Massachusetts had just over three megawatts of solar capacity; today we have over 700 megawatts installed and will more than double that by 2020. In the same year (2007), we had just over three megawatts of wind capacity; today, we have installed 103 megawatts of land-based wind and are poised to launch a new era of off-shore wind development.
The challenge in India, as I see is that although there has been de-regularization of electricity and some states have separated electricity generation and distribution which is the step in the right direction, there is still no robust market and price for electricity. Getting the pricing right is very important, for example, we have a market in North East in which energy from solar, wind, natural gas, coal and even energy efficiency compete in the daily market and what we call the capacity market, market that is designed to bring more electricity or man site savings online.
Both the countries, have electricity system based on decades old traditional regulatory systems. So the challenges too are very similar such as figuring out how to get price of energy right, i.e. those who are using energy are paying the right cost of that energy is. E.g. in USA at any time of day a person pays the same cost per unit even during the peak hours when usage increases and the cost of electricity goes very high. The analogue in India is the subsidization due to which the user does not see the right cost and the utilities do not get the adequate revenues which can be used to improve infrastructure or make innovations to reduce energy cost.
Net metering is one of the solution that we are using as a policy in Massachusetts. In India also, there have been some pilot projects. Net metering allows customers to generate their own electricity in order to offset their electricity usage. For example, a net meter installation connected to solar panels will measure the net quantity of electricity that the customer uses from the distribution company and will spin forward, likewise it will spin backward when the customer generates excess electricity (thereby “exporting” electricity to the electric grid). This lower a customer’s electricity bill as also encourages use of clean energy.
Some argue that addressing climate change and moving to a clean energy economy is not ripe, is too costly or will result in job losses. We’ve proven these wrong by seizing the enormous clean energy opportunities before us, in the process not only addressing climate change but also creating new jobs in the clean energy sector and enhancing the economy as a whole.
Massachusetts has tripled the energy saving from efficiency initiatives and today lead the U.S. in energy efficiency deployment. Working with eight other states in the Regional Greenhouse Gas Initiative, we instituted the country’s first carbon cap-andtrade program and lowered carbon emissions by 40% from power plants while pumping almost USD 2 billion into the regional economy. The state now has over 5,500 clean energy firms and nearly 100,000 clean energy workers with 10% annual job growth in each of the last five years. These jobs span the value chain from electricians to architects to research chemists to engineers to lawyers to plumbers to designers to small business owners.
There is no question that the U.S. and India are vastly different countries with different institutions, histories, politics, culture, markets and industry. But both know that energy security and reliability are necessary for a thriving economy. India and U.S. have universities, institutes, startups and huge corporations defined by world-class entrepreneurial, solution-driven innovation. Both have unparalleled human capital – scientists, engineers, technologists, educators, and business leaders. In short, both are poised to seize control of their energy futures and launch a comprehensive clean energy revolution that drives economic growth.
It is no surprise then, that for each example of a successful leap toward the clean energy future in Massachusetts and the U.S., India has made tremendous advances as well from growing solar from under 10MW to over 3,000MW in the last five years and ramping up wind power from 15GW to 24GW between 2011 and early 2015 to encouraging widespread use of cleaner fuels for buses and autorickshaws in Delhi, expanding the exploration of energy storage and Smart Grid and devoting significant resources to study advanced biofuels led by the India Institute of Chemical Technology.