Climate Change: These three PSUs can help achieve clean energy goals

Climate Change: India’s three largest central state-owned enterprises or PSUs- Coal India Limited (CIL), NTPC, and Indian Railways- can together capture a sizable chunk of the clean energy market as well as the country help them reach their climate goals.

According to a new report by the International Institute for Sustainable Development (IISD), by the year 2050, these three enterprises can not only fill the estimated 22% – 28% cash flow gap of this sector but also India’s net. It can also pave the way towards zero.

The study is titled India’s State-owned Energy Enterprises, 2020-2050: Identifying Evidence-Based Diversification Strategies. This study uses public sector undertakings (PSUs) in the coal sector to show how energy businesses can identify their future uncertainties, as well as opportunities in a changing energy system.

“State-owned companies can be part of India’s clean energy future while bringing revenue to the government, creating jobs and supporting local communities,” says Balasubramaniam Viswanathan, policy advisor at IISD, and co-author of the report. The evidence-based approach shows the way through which this goal can be achieved.”

The study found that between 2020 and 2050, CIL and Indian Railways received Rs 415 billion (28%) and Rs 2,112 billion in cash flow, respectively, under the net-zero-aligned pathway. (22%) while cash flows may fall by INR 404 billion (22%) as compared to NTPC’s business-as-usual scenario.

But the report’s authors argue that taking some concrete measures to diversify their businesses over the next few years could allow these firms and other similar PSUs in India to reduce future uncertainty and avoid revenue gaps. can.

Early diversification

For example, the study found that it is important for PSUs to create a net-zero roadmap with interim goals. Doing so can serve as a guide for future decisions and develop internal projections on the financial impact of the changing energy landscape.

PSUs can also utilize their ability to raise capital at favorable rates to identify diversification strategies and become early adopters of clean energy technologies. To do this, experts recommend that firms should set clean energy targets commensurate with the potential scale and pace of financial impacts, and increase the ambition of these targets from time to time.

In addition, creating strategic partnerships between PSUs to exchange expertise and invest in research and development can help PSUs build internal capacity in new and emerging clean energy technologies. In the end, making public its ambitions to make the clean energy transition could end up with positive market signals that could further strengthen the measures mentioned earlier.

“As major employers in the conventional energy sector, PSUs play a vital role in reaching India’s climate and energy goals, and they should involve other relevant stakeholders in the decision-making process,” says Viswanathan.

The report’s authors encourage all state-owned energy enterprises to adopt this approach to conduct their own detailed internal assessment and devise an evidence-based strategy for transitioning to the clean energy business.

Related tags : CIL climate change IISD Indian Railway net-zero roadmap net-zero-aligned pathway NTPC