Role of private finance important in equitable energy transition

In order to once again draw attention to the just energy transition, the International Forum for Environment, Sustainability, and Technology (iForest) organized the first Global Just Transition Dialogue in Delhi to discuss the policy and financial aspects of the subject. The purpose of the event was to bring together national and international stakeholders in just transition, or equitable energy transition, to exchange their views and experiences on the subject from the perspective of developing countries.

Inaugurating the event, India’s G20 Presidency Sherpa, Amitabh Kant, said that “our ability to access private finance will be critical to this equitable energy transition. We also need new financial instruments and a revision of the way multilateral institutions work to improve the flow of finance from there.” Continuing, Kant added that, “Wind and solar energy, combined with pumped storage, will be key to driving down the cost of green hydrogen and pave the way for an energy transition for India. “

At the dialogue, Chandra Bhushan, President and CEO of iForest, said, “While our equitable energy transition strategy should be guided by the country’s net zero goal and energy self-reliance goals, our actions should be such that green energy and industry Help create and develop a skilled workforce. Therefore, an equitable energy transition should be seen as an opportunity for green growth in India’s industrialized states and districts, as well as an opportunity to provide quality green jobs and a better life for all ”

Shamika Ravi, a member of the Prime Minister’s Economic Advisory Council, said in the inaugural session that the need for energy transition needs to be balanced with the issue of energy security. Many districts are also aspirational districts and labor transition there is going to be a time consuming and challenging task. Speaking of financing, he said the big multilateral banks will have to step up and finance the transition.

The event featured sessions focusing on international experiences, the role of national and state governments, policy imperatives to ensure an equitable energy transition, and financing needs with a focus on the global south. Experts representing developing countries such as South Africa, Indonesia and Vietnam, key policy advisors, top central and state government officials, and representatives from labor unions, industry, multilateral institutions, banks and philanthropies shared their insights and observations during various sessions. shared to

Talking about the role of states, Odisha Chief Secretary Pradeep Jena said that it is easy to handle the changes in technology. He adds, “The labor workforce has a large role to play in the fossil-fuel sector, particularly coal mining and the associated transportation sector. Therefore, a major challenge in an equitable energy transition will be to ensure a better future for this human intensive workforce.

Planning for the transition will require significant investment in jobs, skilling and reskilling. Another important aspect would be to define the separate responsibilities of the central and state governments. “States will need a lot of technical support, partnerships, and guidance for a smooth transition,” he added.

Talking about the need for finance, Member of Parliament from Hazaribagh, Jharkhand, Jayant Sinha said, “This energy transition should start from the coal sector. We need to deploy multiple sources of capital for this. However, we also urgently need to build institutional and administrative capacity to access this capital. Financing and institutional capacity building should go hand in hand.

During this round of discussions, iFOREST also released two reports – ‘Just Transition Framework for India: Policies, Plans and Institutional Mechanisms’ and ‘Just Transition Costs and Cost Factors: A Decomposition Study’ – which provide the necessary policies, plans, institutions and financing provide the first blueprint for a just energy transition in India.

The major findings and recommendations of the report are:

• India’s equitable energy transition framework should include all fossil fuel sectors, not just coal.

• There is a need to adopt a comprehensive decarbonization strategy.

• A phased transition approach should be adopted to ensure energy security and minimize social and economic disruption. Factors to be considered in the next decade are old and unprofitable mines, old power plants and sectors that are undergoing rapid technological change, such as the automobile sector.

• The central government will have a key role in developing a national equitable energy transition policy, with a focus on green growth, green jobs and the development of the fossil fuel sector. In addition, the central government will also have to mobilize domestic and international funding.

• Developing a comprehensive state and district equitable energy transition action plan will be the most important responsibility of the state government.

• An independent Just Transition Commission at the national level and a task force at the state level will be required to prepare a people-centric plan.

• A proper energy transition in India will require at least $900 billion over the next 30 years, if only coal mines and thermal power sectors are taken into account. Out of this, around $300 billion will be needed.

• International cooperation is essential for an equitable energy transition in developing countries. Grants and concessional financing will be needed to support the economic diversification of fossil fuels and green energy and industrial development in a country like India and to build the resilience of affected communities.

In the end, Chandra Bhushan said that considering the relevance and usefulness of the discussions, now he will make this dialogue an annual event.