After South Africa, Indonesia, and Vietnam, India is considered the next candidate for a JET-Partnership. India’s G-20 presidency could potentially be an opportune moment to forge a deal.
Just Energy Transition Partnership (JET-P) is emerging as the key mechanism for multilateral financing by developed countries to support an energy transition in developing countries.
The partnership has taken on particular significance following the insertion of the phrase ‘phase-down’ of coal in the Glasgow Pact.
However, India must develop a coherent domestic just energy transition (JET) strategy in order to negotiate a financing deal that addresses its unique set of socio-economic challenges.
Energy transitions and developing countries:
Energy transitions could give rise to intra-generational, intergenerational, and spatial equity concerns.
Transitions affect near-term fossil-dependent jobs, disrupt forms of future energy access, shrink state’s capacity to spend on welfare programmes, and thus exacerbate existing economic inequities between coal and other regions.
Existing JET-P deals pay limited attention to intra-generational inequity, such as job losses resulting from a coal phase-down.
However, among the three JET-P deals signed so far, only South Africa’s deal mentions a ‘just’ component — funding reskilling and alternative employment opportunities in the coal mining regions to be financed as part of the initial $8.5 billion mobilisation.
The other two JET-Ps (Indonesia and Vietnam) are focused on mitigation finance for sector-specific transitions.
India and energy transition:
India’s transition requires significant simultaneous growth in energy demand.
The Central Electricity Authority projects a near doubling of electricity demand by 2030.
A country that is likely to multiply its energy demand requires adequate supply from a diverse mix of sources. India cannot afford to put its development on hold while decarbonising.
India has signalled a commitment to clean energy with ambitious targets like 500GW of non-fossil, including 450 GW renewable energy (RE) capacity addition and 43% RE purchase obligation by 2030.
These targets are supported through complementary policy and legislative mandates (Energy Conservation (Amendment) Act), missions (National Green Hydrogen Mission), fiscal incentives (production-linked incentives) and market mechanisms (upcoming national carbon market).
These interventions show India’s serious efforts at energy transition, but additional supplementary measures are needed for a coherent JET strategy.