Can Coal India, NTPC and Indian Railways help India reach its climate goal?

Coal India, NTPC, and Railways can help our nation to meet clean energy goals as per the report of the International Institute for Sustainable Development

Image Credit: ANI; Representational Image

New Delhi: India’s largest central state-owned enterprises that are Coal India, NTPC and Indian Railways can help in reaching its climate goal. Meanwhile, seizing the share of the clean energy market and mitigating an estimate of a 22-23 per cent flow gap by 2050 as India gears itself towards net-zero carbon emission, a state in an International Institute of Sustainable Development’s report said on Tuesday

Public sector undertakings (PSUs) in the coal industry are used in the study, India's state-owned Energy Enterprises, 2020-2050: Identifying Evidence-Based Diversification Strategies, to demonstrate how energy businesses can recognise their future uncertainties while also identifying opportunities in the evolving energy system.

Co-author of the report Balasubramanian Viswanathan, Policy Advisor at IISD quotes, "State-owned companies can be part of India`s clean energy future while continuing to bring revenues to the government, creating jobs, and supporting local communities," says. "Our evidence-based approach shows pathways for how this can be achieved."

According to the study, between 2020 and 2050, under the net-zero-aligned pathway, CIL and Indian Railways could experience cash flow reductions of Rs 415 billion (28%) and Rs 2,112 billion (22%) respectively, while NTPC could experience a cash flow reduction of Rs 404 billion (22%) in comparison to a business-as-usual scenario.

However, the report's authors contend that by taking a few practical steps to diversify their industries over the coming few years, these companies and other comparable PSUs in India will be able to reduce future unpredictability and prevent revenue shortfalls.

The report by IISD favours early diversification

For example, the report concludes that PSUs must generate internal estimations of the financial impact of the changing energy landscape and net-zero roadmaps with interim targets for the company that can serve as a guide for future decisions.

These PSUs can also use their capacity to raise money at advantageous rates to figure out diversification plans and advance the adoption of renewable energy technologies.

The experts advise that to do this, businesses should set clean energy targets that are commensurate with the potential scope and pace of the financial repercussions and periodically raise the bar on these targets.

Additionally, creating strategic alliances between PSUs to share knowledge and funding R&D can assist PSUs in developing internal expertise in cutting-edge sustainable energy technology.

Making their goals for a clean energy transition known to the public can further boost the preceding actions by sending encouraging market signals.

Viswanathan said, "As major employers in the conventional energy sector, PSUs are key actors in reaching India's climate and energy targets, and they should involve other relevant stakeholders in the decision-making process,"

The report's authors recommend all state-owned energy companies use this method to create their thorough internal evaluations and an evidence-based transition plan for the clean energy industry.