The Conference of Parties (COP) 29 to be held in Baku, Azerbaijan is scheduled to be organised in November. The earlier COPs held under the aegis of the United Nations Framework Convention on Climate Change since 1992, focused on climate change mitigation and adaptation from a broader perspective. The phasing out of fossil fuel-based energy sources is considered the cornerstone of the current discourse on energy transition to meet the goals of the Paris Agreement to limit the global warming below 2 degrees Celsius above pre-industrial levels.
India, with a target to achieve 500 GW of renewable capacity and net zero by 2070 would have to carefully navigate the energy transition to reap the dividends from the new international energy order. The current energy profile of India is highly skewed towards fossil fuels with coal contributing to 49 per cent of total installed capacity and 71 per cent in terms of electricity generation. Given, India’s per capita energy consumption is one third of the world average and one twelfth of that of the USA, the twin objectives of providing round the clock energy access, ensuring energy security and reducing GHG emissions for climate change mitigation and adaptation presents India with an energy policy paradox.
The fossil fuels such as oil, gas and coal form the bedrock of the traditional international energy order. However, the shift would have multidimensional effects with far-reaching consequences from social, economic, technological and geopolitical standpoints. The geopolitics of the energy transition will shift the balance of power from the countries such as Saudi Arabia and other oil exporters of the contemporary period to the countries with high renewable energy potential and control over critical raw materials such as China, Australia, Chile and Argentina.
The energy transition will unravel the existing international energy order and rearrange the demand-supply arrangements among nations which at present is dominated by oil and gas. Its profound impact may transform today’s sellers as tomorrow’s buyers and vice-versa. The attributes of renewables such as technology and capital will replace the attributes of the traditional sources such as scarcity, lack of renewability, uneven geographical distribution and high dependence for economic development. Notwithstanding, renewables are not immune to challenges. The scarcity and uneven distribution of critical materials such as rare earth minerals, cobalt, silicon etc required to manufacture solar modules and wind turbines along with the issues of intermittency and grid integration pose severe hurdles in expansion of renewable energy. These are the deterministic factors in shaping the geopolitics of energy transition.
Like fossil fuels, the renewable-based energy order also remains vulnerable to traditional security threats like wars- the Ukraine crisis and the Covid pandemic. The disruptions in critical minerals supply chains threaten the energy transition’s temporal and spatial dynamics, thereby posing a severe risk to national energy security. In the current order dominated by fossils, India imports 85 per cent of its oil needs and 50 per cent of its gas requirements. In the post-transition world order, the geopolitical implications of the energy transition would threaten India’s energy security given the criticality of critical minerals.
The concentration of these critical minerals in limited geographical regions would be the major driver of post-carbon geopolitics. The countries with heavy endowments of these minerals have unfavourable conditions in terms of political stability and ease of doing business. One such example is the Democratic Republic of Congo which has high cobalt reserves, and lags far behind (183/190) in the Ease of Doing Business report of the World Bank. The concentration in production is another challenge as in 2019, three-fifths of global lithium production was controlled by five major corporations and two-thirds of global cobalt processing lay in China. The control of reserves over the production and its processing amplifies the need for increased focus over the geopolitical implications of energy transition.
In the context of climate change, the negative fallouts of geopolitics of critical minerals and energy transition do not justify India’s continued reliance on fossil fuels. The Khanij Bidesh India Limited (KABIL) can play a crucial role in ensuring India’s access to critical minerals by strategic sourcing leveraging international collaborations such as Mineral security Partnership. India shall strengthen regional energy cooperation with neighbouring countries to develop integrated energy markets and cross-border energy projects and engage in international partnerships and agreements to access advanced energy technologies and best practices.
India should focus on exploring the domestic reserves and increasing the domestic processing capabilities of critical minerals. Increased investments in research and development of advanced solar cells, wind turbines and energy storage to enhance energy efficiency shall be promoted. The policy and regulatory initiatives shall incentivize the battery industries and introduce market-based mechanisms such as carbon pricing.
Energy security which includes affordability, accessibility, availability and acceptability is the prime mover of the energy and climate policies of India. However, against the backdrop of climate change and sustainability requirements, it would be interesting to navigate the evolving landscape of critical raw materials and geopolitics of energy transition.
The writer is research scholar, energy studies programme, School of International Studies, Jawaharlal Nehru University, New Delhi