Transitioning to Renewable Energy: A Snapshot of China, India and Sri Lanka

July 24, 2019        Reading Time: 6 minutes

Reading Time: 6 min read

Image credits: Thomas Richter/unsplash

*Meera Sivasubramaniam

Introduction

Policymakers across the world today are confronted with the issue of ensuring the continued prosperity (and in some cases, survival) of nations in the context of climate change. The United Nations Intergovernmental Panel on Climate Change Special Report, released in October 2018, explains that human activities have caused an increase in global warming since pre-industrial levels by approximately 1.0 degree Celsius.1 Yet, economies continue to boom, populations continue to grow at unprecedented rates, and the demand for resources increases correspondingly. Against this global context, it is worthwhile considering what these developments mean for Sri Lanka, a nation with over 20 million people that is focused on developing as an export-oriented economy.  Regional economic powers like India and China, have introduced energy policies that have a great impact on smaller nations like Sri Lanka. Below is a graph presenting data on electricity generated through renewables in the respective countries.

Source: International Energy Agency, 2016

Sri Lanka

Sri Lanka is one of 195 signatories2 to the Paris Agreement and is committed to addressing climate change through its international commitments and domestic policy reform. In accordance with these commitments, in 2016 Sri Lanka has established a national target to increase the renewable energy capacity by 32% to achieve the status of carbon neutrality by 2050.3 Sri Lanka’s electricity generation capacity needs are expected to increase from 3,700 MW to 34,000 MW by 2050.4 These targets prove to be a challenge as the main sources of renewable energy in Sri Lanka—hydropower and biomass—are expected to increase only marginally in the future. This is mainly due to Sri Lanka’s limited use of biomass on a large scale, and the limitations on hydropower development as it is still a developing economy.

Furthermore, the renewable energy targets set by Sri Lanka’s Ministry of Energy have faced financial investment obstacles. The Asian Development Bank and the United Nations Development Programme estimate that Sri Lanka requires an investment of over USD 50 billion to meet its goal of 100% electricity generation through clean energy.5  Acquiring this kind of investment has been a significant challenge, considering the country’s somewhat sluggish growth rate, high debt burden, and increasing social welfare costs prompted by an ageing population. The rising demand has resulted in Sri Lanka’s increased dependence on costly imported fuels for electricity generation. At present Sri Lanka relies on cheaper, non-renewable energy sources for generation of electricity, while renewable energy sources are being used sparingly. Poor rainfall has also affected hydro generation. Biomass still remains a nascent sub-sector in terms of energy supply that lacks organisation, and is small-scale compared to the dominant electricity and petroleum sectors. The National Energy Policy and Strategies of Sri Lanka seek to improve the biomass sector by promoting the development of biofuels in the transportation sector.6

India

India is currently the world’s seventh largest economy and has a population of 1.3 billion. Recognised as one of the world’s most powerful economies due to the sheer size of its labour force and anticipated reforms, India is one of the nations that battles with the paradox of climate change.

India is focused on ensuring that its renewable sector is economically viable. It claims to be the pioneer of many administrative actions in renewable energy promotion. For example, it was made mandatory for large energy-consuming units in nine heavy industrial sectors to conduct environmental audits. These units are required to report their energy consumption and energy conservation data annually.7 By conducting environmental audits, India promotes energy efficiency as an integral component of urban renewal. Sri Lanka could implement similar measures for its industrial sector to help manage their energy efficiency. India’s Ministry of Power encourages grid-interactive power projects based on clean energy through private investment routes.8 A grid-tied power system (also referred to as grid-intertied, on-grid or utility-interactive) produces electricity from renewable energy sources such as solar that is fed directly into the utility grid. This reduces the dependence on utilities that use fossil fuels to generate electricity. India is also developing its renewable energy capacity. For example, solar and wind installations have exceeded the annual goal of 43% and 116% respectively in  2016.9 India is, therefore, actively working to tackle climate change.

China

China’s current energy mix depends on coal as a primary source of electricity generation. The country’s manufacturing and construction sectors rely heavily on coal, which has accounted for over 70% of carbon dioxide emissions in China in 2016.10 Coal is one of the cheapest forms of non-renewable energy and it accounts for over a third of the nation’s methane emissions. The 13th Five Year Plan, released in March 2016, was the first Chinese plan to provide specific guidelines on energy consumption.11 China aims to reduce energy consumption per unit of GDP by 15% from 2015 levels by 2020.12 To achieve this target, China is increasing the efficiency of coal-burning power plants, has plans to shut down coal-fired boilers that fail to meet national standards, and has restricted construction of new coal-fired power plants.

To follow up, The National Development and Reform Commission of China has revised the Renewable Portfolio Standard (RPS).13 The RPS has been adopted to reform the current power sector. It seeks to rebuild a sustainable economic structure by limiting fossil fuel consumption, which includes limits on coal and oil industries. China increased the RPS to 35% of electricity consumption by 2030.14 To support this move, the RPS allows power generators to sell green certificates to covered entities. This enables power generators to get more renewable energy subsidies from national renewable development funds. This increases the probability of wind and solar being competitive sources of energy against fossil fuels, which promotes the transition to a cleaner society.

The National Energy Administration has stated that coal power capacity across the country will be capped off at 1100 GW in 2020.15 This cap on coal power will limit greenhouse gas emissions. China is already a major player in the renewable energy market, being a leading investor in hydropower and holds the highest capacity for solar energy globally.16

As a paradox to Chinese policies that promote the use of renewable energy sources, the coal sector continues to be powerful as it is building and financing coal-fired power plants in over 17 countries.17 This has raised concerns regarding the potential waste released by the generation of coal for electricity and the negative consequences of air pollution in China.

Overall, China’s energy targets are ambitious compared to other Asian nations, such as India and Sri Lanka. It is currently seeking to commit to a sustainable future by setting itself key milestones in clean energy production.

Conclusion

Sri Lanka has several challenges to overcome in achieving its renewable energy targets. At the same time, it is clear that regional giants, China and India, are similarly facing challenges in their transition to renewable energy. However, they have the financial investment to fund their renewable energy policies, while Sri Lanka faces an investment gap.

Nevertheless, the ability of these countries to successfully implement several key initiatives regarding clean energy provides opportunities for smaller regional countries like Sri Lanka. These include reduced dependence on imported fossil fuels, and more employment opportunities in the renewable energy sector. Sri Lanka needs to engage more proactively with these nations to receive financial and technical assistance in meeting its own renewable energy targets.

Notes

1Intergovernmental Panel for Climate Change (2018). Summary for Policymakers of IPCC Special Report on Global Warming of 1.5°C approved by governments. [online] Available at: https://www.ipcc.ch/2018/10/08/summary-for-policymakers-of-ipcc-special-report-on-global-warming-of-1-5c-approved-by-governments/ [Accessed 3 November 2018].
2Paris Agreement – Climate Analytics. (2018). Paris Agreement Ratification Tracker. [online] Available at: https://climateanalytics.org/briefings/ratification-tracker/[Accessed 2 November 2018]
3Ministry of Power and Energy. (2015). Sri Lanka Energy Sector Development Plan for a Knowledge-based Economy. [online] Available at:http://powermin.gov.lk/english/wp-content/uploads/2017/10/MoPRE-2017.2018-03-English.pdf [Accessed 11 December 2018].
4Brittlebank, W. (2017). Sri Lanka to achieve 100% renewables by 2050. [online] ClimateAction. Available at:http://www.climateaction.org/news/sri-lanka-to-achieve-100-renewables-by-2050
[Accessed 31 December 2018].
5United Nations Development Programme. (2018). Sri Lanka on path to 100% renewable energy says a new joint report by UNDP and ADB. [online] Available at: http://www.undp.org/content/undp/en/home/presscenter/articles/2017/08/16/sri-lanka-on-path-to-100-renewable-energy-says-new-report-by-undp-and-adb.html [Accessed  3 November 2018].
6Ministry of Power and Renewable Energy. (2018). Energy Policy. [online] Available at: http://powermin.gov.lk/english/?page_id=1394 [Accessed on 5 November 2018].
7National Action Plan on Climate Change, Government of India, (2008)
https://www.indiawaterportal.org/sites/indiawaterportal.org/files/National%20Action%20Plan%20on%20Climate%20Change%20(NAPCC)_Prime%20Ministers%20Council%20on%20Climate%20Change_Government%20of%20India_%202008.pdf [Accessed 8 November 2018].
8Ibid
9United Nations Framework Convention on Climate Change. (2017). China and India Lead Global Renewable Energy Transition. [online] Available at: https://unfccc.int/news/china-and-india-lead-global-renewable-energy-transition [Accessed 11 November 2018].
10China Power. (2019). How is China managing its greenhouse gas emissions? [online] Available at: https://chinapower.csis.org/china-greenhouse-gas-emissions/ [Accessed 13 March 2019]
11Davies, P. (2016). China’s 13th Five-Year Plan – Planning for a Greener Economy. [online] Latham London. Available at: https://www.latham.london/2016/04/chinas-13th-five-year-plan-planning-for-a-greener-economy/#page=1 [Accessed 17 November 2018].
12Tianjie, M. (2017). China’s Ambitious New Clean Energy Targets. [online] The Diplomat. Available at: https://thediplomat.com/2017/01/chinas-ambitious-new-clean-energy-targets/ [Accessed 31 December 2018].
13Bloomberg. (2018). China Steps Up Its Push Into Clean Energy. [online] Available at: https://www.bloomberg.com/news/articles/2018-09-26/china-sets-out-new-clean-energy-goals-penalties-in-revised-plan [Accessed 13 November 2018].
14Ibid
15Reuters.  (2016). China to cap coal at 55 percent of total power output by 2020: NEA [online] Available at: https://www.reuters.com/article/us-china-power-consumption/china-to-cap-coal-at-55-percent-of-total-power-output-by-2020-nea-idUSKBN1320LT
16Timperly, J. (2018). China leading on world’s clean energy investment, says report. [online] CarbonBrief. Available at: https://www.carbonbrief.org/china-leading-worlds-clean-energy-investment-says-report [Accessed 24 November 2018]
17Banktrack. (2018). Over 670,000 MW of new coal threatens 1.5°C climate target. [online] Available at:  https://www.banktrack.org/article/over_670_000_mw_of_new_coal_threatens_1_5c_climate_target

*Meera Sivasubramaniam was a Communications Assistant at the Lakshman Kadirgamar Institute of International Relations and Strategic Studies (LKI). The opinions expressed in this article are the author’s own and not the institutional views of LKI, and do not necessarily reflect the position of any other institution or individual with which the author is affiliated.

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