West green subsidies damage clean energy development in South: India

By Al Mayadeen English
Source: Financial Times
19 Jun 2023 13:14

India’s minister for power and renewable energy slammed the West for acting "hypocritically."

Indian Minister of Power and New and Renewable Energy Raj Kumar Singh attends the G20 Energy Transitions Ministerial Meeting in Nusa Dua, Bali, Indonesia, Friday, Sept. 2, 2022 (Made Nagi/Pool Photo via AP)

India’s minister for power and renewable energy, Raj Kumar Singh, told the Financial Times on Sunday that the EU and US efforts to subsidize renewable energy industries are hurting incentives for clean energy production in the Global South, noting that these protectionist measures are far from being competitive in a world where the West advocates for a free and unfettered market economy.

"This protectionism — I saw that in the Inflation Reduction Act (IRA) in the United States. I see that in this green hydrogen auction in Europe," Singh told the Financial Times. "We’ve had the developed world lecturing the rest of the world on how important free trade is . . . And here they themselves are erecting barriers."

His remarks come just days ahead of Narendra Modi’s state visit to Washington which is scheduled this week. Singh said he is considering asking Modi to raise questions about the US IRA with US President Joe Biden, noting that it has nothing to do with the transition

Singh’s criticism came days ahead of Narendra Modi’s state visit to Washington this week, and he said he was considering asking the prime minister to raise concerns about the IRA with US President Joe Biden. "It’s not for the transition," Singh said. "It’s for making sure that other people are not able to compete."

Singh also slammed the West of acting hypocritically when it came to its exaggerated approach towards phasing out coal, which is India's primary energy source.

Being the world's most populous country, New Delhi has laid plans to produce 500 gigawatts of renewable capacity by 2030. As of today, it has built more than 160GW, government figures show. The country is also aiming to reduce the share of coal in power generation to about half as it currently stands at 70 percent at present.

Competition from China has also made things further difficult - despite efforts on the part of the government to impose import tariffs on solar components as well as the creation of incentive programs to boost domestic manufacturing. But experts have pointed out that Western protectionist schemes have rendered all these efforts obsolete, including the subsidies offered by the IRA which offers more than $350bn in grants, tax credits, and loans for renewables.

Several countries have raised concerns against the IRA, including France and South Korea who saw through the monopolistic nature of the scheme.

Modi's visit to the US is aimed at deepening strategic economic and military cooperation with Washington amid China's growing influence. According to Singh, both parties are in the process of finalizing agreements to standardize green hydrogen production standards and enable cooperation.

He added that New Delhi will make moves to prevent a massive manufacturing offshoring in search of subsidies, noting that "we’re not going to lie down and allow people to walk over us."

Commenting on global pressures to phase out coal consumption, Singh said that there are no realistic plans to meet India's pace of economic developments, that coal is required to do so, and that the West failed to fulfill a 2009 pledge to fund developing $100bn a year to fight climate change.

"The bottom line is that our country is growing . . . So I am not going to compromise on the availability of power for my growth," Singh said. "You can’t say, ‘I’ll continue burning gas while you stop burning coal’."