Maharashtra Economic Development Council महाराष्ट्र आर्थिक विकास मंडळ

Viewpoint: Renewables and the Ukraine Crisis

20 MAR,2022 | MEDC

A major socioeconomic dimension of the ongoing Ukraine crisis revolves around energy – its production, control and distribution. Geopolitical conflict has again revealed the fragility of oil prices and threatened to roll back much of the hard-earned economic gains made worldwide in the battle against Covid. Oil prices have risen to $ 139 per barrel last week, which is almost double of what it was in December 2021. This worsens inflationary expectations, and complicates the task of economic policymakers. With rising global uncertainty, one can expect to see even more supply chain disruptions with unpredictable economic consequences.
History repeats itself, and many of the clues to our economic future lie in our past actions. The war in Iraq, the 9/11 terror attacks, and the 2008 financial meltdown are all witnesses to this fact. In each case, there were surges in crude oil prices, impacting oil-importing economies like India. An important lesson to be learnt from this crisis is that India needs to move away resolutely from fossil fuels and towards renewables if we are to secure a sustainable energy future. However, we still have some distance to traverse in this regard.
The Ukraine crisis has confirmed that the quicker we shift from fossil fuels to renewables and green hydrogen, the better it will be for our economic self-reliance and the indigenous mastery of our energy systems. In this regard, the launch of the green hydrogen-based advanced fuel cell electric vehicle (FCEV) by Union Minister Nitin Gadkari in Delhi this week is particularly welcome. It is good to know that the government plans to create an ecosystem for such vehicles in the country. FCEV, powered by hydrogen, is currently one of the best zero-emission solutions and increasingly required in many of India’s over-polluted metropolitan cities today.
From a strategic perspective, most of Europe continues to buy Russian energy. India could also consider that approach, while simultaneously thinking deeper on energy trade autonomy. This crisis should also prompt India to look at globalizing the rupee to minimize potential trade disruptions from Western sanctions. Russia may have complicated the global economic picture with its recent actions, but India should not compromise its strategic interests in energy trade. We now have a certain standing globally, and our policies and pronouncements should reflect that.
Indian companies need to take a serious relook at harnessing wind, solar or hybrid renewable solutions, and decarbonize their production processes by shifting strategically to green hydrogen. In this regard, public policy should also play a supportive role to incentivize sustainable growth through the strategic adoption of renewable energies. We are now likely to witness such geopolitical interruptions on a regular basis, and the best way to prepare for them is to dare to dream big and act in anticipation. The Ukraine crisis has shown that the Indian economy needs to be even more creative and efficient in its march towards renewable energies.

Picture Credit: Google

Viewpoint: Renewables and the Ukraine Crisis

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