Country's private sector lagging in renewable energy goals: CRH Report

BATHINDA: Climate think tank Climate Risk Horizons (CRH) in its latest report ‘Slow to Switch’ has found that India’s leading private companies are dragging their feet when it comes to meeting the country’s ambitious renewable energy (RE) and decarbonisation goals.
The industrial sector accounts for more than half of India’s energy consumption, making corporate action essential to the government’s decarbonisation efforts.
As per the report, released on Tuesday, Climate Risk Horizons scrutinised 33 companies across seven industries, five of which are large energy consumers (Cement, Steel, Aluminium, Textiles, and Fertilisers), the other two being Information Technology and Fast-Moving Consumer Goods (FMCG), on four dimensions—Reporting and Transparency, Sourcing, Intentions, and Practising.
The report uses publicly available data collected from companies’ annual and sustainability reports to assess their decarbonisation efforts as of Financial Year 2023. The analysis reveals a massive gap between companies’ renewable energy commitments and actions, showing that only around 5% of the annual electricity consumption of the assessed companies is sourced from renewables (solar and wind).
India has set ambitious targets for renewable energy (450 GW by 2030). As of January 2024, India had 45 GW of installed wind and 74 GW of solar capacity. Meeting India’s 2030 targets will require an average annual capacity addition of roughly 50 GW.
While ambitious and far above current rates, this is by no means unachievable. However, meeting these targets will require leveraging the resources of all sectors and players in the energy space.
All but one of the companies analysed (ArcelorMittal/Nippon Steel) have reported their energy consumption from various sources. Several have made ambitious commitments as members of global renewable energy alliances, but almost none are on track to achieve their goals. Big steel companies are currently meeting a tiny fraction (less than 0.05% on average) of their energy from renewable sources.
Big textile companies have set targets in line with the Paris Agreement, but, on average, less than 3% of their energy consumption comes from renewable electricity.
Cement companies have all set targets to reduce emissions in line with the Paris Agreement, yet the share of renewable energy in their overall energy consumption was only 2.5%.
In the FMCG sector, some big companies stand out for their low RE utilisation, in contrast to Nestle and Hindustan Unilever, which fare the best in terms of translating renewable energy commitments into actions.
While the information technology industry emerges as the overall top performer, the fertiliser industry lag behind with the poorest score.
“Shifting to renewable energy is essential for energy security at the company level and for the Indian economy as a whole. While a few large companies have started to take steps in this direction, a lot more needs to be done, and a lot quicker, if India is to meet its decarbonisation targets,” said Vishnu Teja, lead author of the report.
Large electricity consumers are bound to meet 30% of their overall electricity consumption from renewable sources, but on average only 5% of electricity consumed by the analysed companies is met from renewable electricity.
The report highlights the significant potential of the heavy industry sector to drive decarbonisation in the Indian electricity system. The companies analysed have an annual electricity consumption of over 169 BU (Billion Units), which is more than double the electricity consumption of some bigger states.
However, less than five percent of this consumption currently comes from renewable sources. Strengthening and enforcing renewable purchase obligations will support the development of renewable energy capacity and energy storage technologies, lowering costs and increasing energy security for industries and the economy.
“India Inc needs to step up and start investing for an energy secure future. The country’s RE and decarbonisation targets will not be met without active support from large corporate players. With green energy open access regulations now in place, companies should be signing Power Purchase Agreements to ensure that 100% of their electricity comes from renewable energy by 2030,” said Ashish Fernandes, Climate Risk Horizons CEO and co-author of the report.