India’s growth rate outstrips China, and it is on course to become the most populous country on the planet, but it still has yet to meet people’s needs for basic utility services. Lois Vallely reports.

UK energy secretary Amber Rudd, speaking ahead of a visit from Indian Prime Minister Narendra Modi in November, said: “The UK and India’s partnership on energy is going from strength to strength.” She insisted that the UK’s experience in green finance and technology mean it is “well-placed” to work with India to “promote secure, affordable and sustainable supplies of energy and address climate change”.

Modi’s visit paved the way for a comprehensive package of collaboration on energy and climate change to support economic growth, energy security and energy access.

The UK has a commitment to reduce its greenhouse gas emissions by at least 80 per cent by 2050, while India hopes to reduce its emissions by 33-35 per cent by 2030, compared with 2005 levels. It also has a target of generating 40 per cent of its electricity from renewable sources by 2030.

The two countries hope that by sharing expertise and experience on how “well-functioning” energy and gas markets can promote energy security and economic growth they will both reach these goals. Indeed, it is hoped that a collaborative approach will allow them to do so more cost effectively.

Economic growth

The Indian economy has seen a rapid increase in its growth rate in the past two years in particular, recently helped by the global decline in oil prices. Economists now consider it the seventh-largest economy in the world.

While most emerging economies, even China, are struggling against global headwinds, India’s economic growth has increased under the supervision of Modi. From 4.5 per cent in 2013, growth jumped up to 6.9 per cent in 2014, after he took office. India’s economic growth rate also overtook that of China this financial year, expanding at 7.4 per cent in Q2, and this is predicted to rise to more than 8 per cent in 2016/17. To put that into perspective, the growth of the UK economy has averaged 2.5 per cent since 1956, according to Office for National Statistics (ONS) figures.

This continuous economic growth has caused the country’s energy consumption to rise rapidly. The World Energy Council says it is now one of the largest energy consumers in the world after China, the US and Russia, and this demand continues to rise at an annual rate of 2.8 per cent.

Power deficit

In parallel to this economic progress, India’s population has also soared.

The United Nations suggests India will overtake China to become the world’s most populous nation by 2022, which will be sure to add to the strain of demand. The Central Electricity Authority (CEA) of India says the country could well face an energy shortage of 2.1 per cent and a peak shortage of 2.6 per cent this coming financial year.

Currently, India has a fifth of the world’s population but only a 30th of its energy, say analysts at Goldman Sachs. “It just doesn’t produce enough to meet its needs. Hence, it has to import energy: oil, gas, and increasingly coal.

“On 30 July 2012, India’s northern electricity grid broke down due to overdrawing by states, plunging an estimated 640 million people into darkness,” they add. “As factories couldn’t operate, homes remained dark, and people were stuck in elevators, the realisation dawned that the Indian economy just could not grow without the country resolving its energy problem.”

The vast majority of India’s electricity needs are met by coal, with hydropower the second-largest power source.

Coal consumption is outpacing India’s domestic production. To help meet the shortfall and to support expanded coal generation, India has set a coal production target of 1.5 billion metric tons by 2020.

Renewable targets

India’s energy supply shortage, coupled with unreliable infrastructure, have led to a highly unstable grid and power cuts are the norm. While ramping up more coal-fired plant is the immediate answer to this security of supply problem, India does have big ambitions for renewable, and decentralised energy as more sustainable solutions to its challenges. For the fiscal year 2015/16, the Indian government allocated $400 million to support the expansion of renewable energy and the country is ranked fifth in EY’s Investment Attractiveness Index for Renewable Energy. There are plans to install 60GW of wind power capacity and 100GW of solar power capacity by 2022 – more than six times the current installed capacities of approximately 22GW and 3GW, respectively. But the Indian government’s limited budget means these goals will not be easily reached, because support is required when renewable energy is more expensive than the fossil fuel energy it replaces.

A recent study by analysts at Climate Policy Initiative (CPI) found that wind power in India is already competitive, meaning the levelised cost of electricity from wind power is the same or lower than that from coal, and would not require government support. CPI therefore suggests that the government should focus on supporting rapid deployment of capacity in the near term to minimise its cost of support. And, as solar power is forecast to become competitive with fossil fuels by 2019, solar capacity deployment should be scheduled such that a larger part of the deployment target is met after that time.

Collaborative approach

During Modi’s UK visit, the two governments made £3.2 billion-worth of commercial agreements, joint research programmes and initiatives to share technical, scientific, and financial and policy expertise. Leaders hope this will encourage the research, development and deployment of clean technology, renewables, gas and nuclear across the two nations.

They also announced £10 million of joint funding from Research Councils UK and the Indian Department of Science and Technology for a new virtual joint centre on clean energy, bringing the total value of the Indo-UK clean energy research programme to £60 million.

Because of its limited budget, the Indian government needs large-scale, low-cost, long-term finance to deliver its renewable energy ambitions and wean itself off imported fossil fuels. Modi insisted London could play a major role in leveraging international capital towards this end goal.

The two prime ministers parted ways, agreeing to support UK and Indian companies and share expertise and experience on ways of achieving energy security and economic growth, as well as delivering a cost-effective low-carbon transition.

Not enough water to go round

The Indian water industry continues to grow in leaps and bounds,” according to Canada International Trade Services, which says that, as the population and the economy continue to rise at a rapid rate, the demand for water for both domestic and industrial use also grows.

The total Indian water market is estimated to be worth about $12 billion (£8 billion), with the government sector accounting for about 50 per cent and the private industrial and domestic sectors accounting for the rest. The overall market continues to grow at 18 per cent every year.

Supply crisis

Non-profit organisation The Water Project says India’s water crisis is often attributed to lack of government planning, increased corporate privatisation, industrial and human waste and government corruption.

India’s huge and growing population of 1.2 billion people is putting “severe strain” on the country’s resources, and most water sources are contaminated with sewage and agricultural run-off. Although access to drinking water has improved in recent years, one in ten people still lack access to safe water. The World Bank estimates that 21 per cent of communicable diseases in India are related to unsafe water, with diarrhoea alone causing more than 1,600 deaths every day.

A concern shared by many charities working in India is that the country may lack long-term availability of replenishable water resources. While the country’s aquifers are currently tasked with replenishing sources, it is also a major grain producer and needs a great deal of water to irrigate farms. As with all countries with large agricultural output, excess water consumption for food production depletes the total water supply.

Innovative tech

Water shortages in India are ongoing, with no solution likely in the foreseeable future. According to the New Delhi local media, the nation has 17.5 per cent of the world’s population but only 4 per cent of the world’s fresh water, and that is declining gradually.

Because of this deficit in water supply and sanitation, many innovative technologies have been debuted in India. For example, in January Israeli tech firm Water-Gen entered the Indian market with air-to-water technology.

There are opportunities for UK companies to reap the benefits of this potential in the Indian water market. Last year, Welsh water technology firm Hydro Industries partnered with power firm Intelligent Energy to support the commercialisation of its water purification technology in India. The technology uses electricity to treat water and reduces the need for bulk liquid chemicals or large volumes of biomass. This followed Intelligent Energy’s foray into India to offer power management systems for telecom towers (see box, p24).

India itself has been looking at ways of solving the perennial problem of poor sanitation. Researchers recently came up with an innovative solution to the issue, in the form of a water purification system using nanotechnology which removes microbes, bacteria and other matter from water. To do this, the technology uses composite nanoparticles to emit silver ions that destroy contaminants.

Policy shift

Water resources are governed by India’s 29 state governments, meaning that sharing these resources is not always straightforward.

In order to get to the root cause of the problem, prime minister Modi last year launched an initiative to start implementing a three-decade-old plan to connect 30 rivers, in what US publication Bloomberg calls the “priciest step yet” to begin solving some of the water, sewage, health and pollution issues in the country. The initiative will link 14 rivers from the Himalayas and 16 across the Indian peninsula, which will help to transport water from areas with ample supply to those with not enough.

The scheme has faced criticism, with co-ordinator at South Asian Network on Dams, Rivers and People Himanshu Thakkar saying it has none of the statutory clearances. Director general of the National Water Development Agency Masood Husain expects the projects to move faster.

“Our water needs are becoming bigger. India can’t afford to lose more time,” he said.

Delhi’s water mafia accounts for lion’s share of supply

According to estimates from the Delhi government, the population of 17 million in the district requires 1.025 billion gallons of water a day but, because of limitations in water pipes and supply, there is a water shortage of approximately 207 million gallons a day. About 20 per cent of Delhi’s population has no access to piped water.

The shortages have led to a black market, where private tankers bring in water from neighbouring areas and wells. It costs about $10 (£6) to buy 200 litres of water from the “water mafia” whereas water provided by the city government is free, when it’s available.

Reports in the New York Times suggest the Delhi government is only able to account for 37 per cent of the water supply and does not know where the remaining 63 per cent ends up. Financial officers estimate that black market water-sellers in India could be making millions of dollars every year.

Intelligent use of hydrogen fuel cells

There have long been question marks over the role of hydrogen fuel cells in decarbonising modern society. But despite having many passionate advocates, the hydrogen economy has largely failed to take off in a big way.

Recently, however, UK fuel cell manufacturer Intelligent Energy struck a £1.2 billion deal in India to fit hydrogen fuel cells on to telecoms towers via its subsidiary Essential Energy. The deal will deliver more fuel cells into the world than have previously existed and will make a major contribution, both to Indian economic dynamism and to national decarbonisation.

The economic benefits will be realised by increasing the reliability of India’s telecoms network and internet connectivity – a vital resource for businesses, which currently suffers frequent failure because of grid outages. On average, around 70 per cent of Indian telecoms towers experience grid outages for up to eight hours a day.

These grid outages have caused the Indian telecoms network to become heavily carbon intensive because operators have sought to mitigate outage problems by fitting diesel generators to towers. These generators are thought to consume 2.5 billion litres of diesel annually.

By replacing these generators with hydrogen fuel cells, Intelligent Energy hopes to make a major contribution to a low carbon “reimagined power grid” in India. It’s also thought the large-scale deployment of hydrogen fuel cells will represent a big step forward in reducing the price point of the technology.