LexQuest Foundation

Partnership to Advance Clean Energy (PACE): Understanding the Basics

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LexQuest Foundation
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By Navishta Qureshi, NLIU, Bhopal.

In the present situation facing the globe, one of the most important considerations for economy of any country is the development of its energy sector. Not only from the perspective of economic production of goods, but also from the standpoint of the effect that it causes on environment, it is necessary that various countries of the world come together and co-operate with each other in order to provide energy security and fight against climate change.

HISTORY: The United States and India share a rich history of energy cooperation going back to the 1950s. Prominent among them is USAID’s[1] support for India’s first nuclear power plant at Tarapore in 1969. The need for energy security and curbing the negative impacts of climate change have led to expansion of this partnership. This co-operation has further strengthened by the launch of U.S.-India Energy Dialogue in May 2005. It provided a mechanism for policy dialogue and technical co-operation to enhance mutual energy security, promote increased energy trade and investment, facilitate the deployment of clean energy technologies, including the safe use of nuclear power.

The dialogue is backed by the Secretary of Energy on behalf of U.S. and the Deputy Chairman of Planning Commission by India. The two governments also actively engage with the Indian and American business communities to promote trade and investment in the energy sector. Work under the Energy Dialogue is organized under six working groups –

  1. Power and Energy Efficiency.
  2. New Technology and Renewable Energy.
  3. Oil and Gas.
  4. Civil Nuclear Energy.
  5. Working Group on Sustainable Growth (added in May 2013).

PACE: PARTNERSHIP TO ADVANCE CLEAN ENERGY – In November 2009, Prime Minister Singh and President Obama agreed to strengthen U.S.-India energy cooperation through a new Partnership to Advance Clean Energy (PACE) under the U.S.-India Energy Dialogue. PACE is the flagship program between the U.S. and India to work jointly on energy security and clean energy. It aims to bolster joint efforts to demonstrate the viability of existing clean energy technologies as well as identify new technologies that can increase energy access and security. It focuses on transition of the country to a high-performing, low emission, and energy-secure economy at an accelerated rate.

PACE also focuses on engaging the private sector, local governments, industries, and other stakeholders apart from the central governments of the countries in sharing best practices on sustainable low carbon growth. Since its inception, PACE has mobilized significant resources from both governments and the private sector to promote clean energy scale-up.

It has undertaken two initiatives on urging low- carbon development.

  • PACE-R (Research) ­– It undertakes research in various areas with priority over-
    1. Solar Energy
    2. Energy Efficiency in Buildings
    3. Second-Generation Biofuels.

PACE-R is led by joint efforts of US Department of Energy and Planning Commission of India. The main task is to support research and development especially in the above mentioned fields. As per the latest report on the dialogue issued in the year 2014, both the governments have committed USD 25 million each over the period of five years for the task. Apart from Planning Commission, the Ministry of Science and Technology also contributes towards the fulfilment of the objective.

  • PACE-D (Deployment) – It supports deployment of clean energy. The target areas here are:
    1. Clean Energy Finance
    2. Renewable Energy
    3. Energy Efficiency
    4. Cleaner Fossil Fuel

In addition, it includes a technical assistance program named PACE-D TA Program, jointly funded by USAID and USDOS. The value of funds is USD 20 million. The Deployment agency is supported by seven agencies on behalf of US. They are-

  • USDOC- US Department of Commerce
  • USDOS- US Department of State
  • USDOE- US Department of Energy
  • OPIC- Overseas Private Investment Corporation
  • USAID- US Agency for International Development
  • USTDA- US Trade and Development Agency
  • Ex-Im- Export-Import Bank of US

On the part of India, leading counterpart agencies include:

  • Ministry of Power and
  • Ministry of New and Renewable Energy

In the September of 2013, US and India added a new initiative under the PACE umbrella known as Promoting Energy Access through Clean Energy (PEACE). The primary reason for its inception was to advance economic development of India with the help of advanced clean energy technologies combined with financing models and appropriate policies. It focusses on four key elements to improve clean energy access:

  • Sharing best practises;
  • Developing new approaches to increase Financing for Clean Energy Access;
  • Technology Innovation; and
  • Building Technical Capacity of Stakeholders.

The leading Indian agencies include:

  • Ministry of New and Renewable Energy and
  • National Institute for Solar Energy.

PROGRESS REPORT, 2014– The latest Progress Report on the working of the partnership was published in July 2014 by the US agencies[2]. Following points were highlighted by the report on the progress of PACE.

  • A new initiative under PACE known as PEACE[3] was launched in September 2013 by signing a Memorandum of Understanding between USDOE and MNRE[4].
  • In February 2014, a new initiative under PEACE known as CLEAN[5] was launched towards which USAID has committed USD 1 million. It was signed by ten Not-for-Profit Organisations[6] as partners. Its aim is to strengthen India’s system for market-oriented approaches towards clean enrgy.
  • The Fifth Clean Energy Ministerial (5th CEM) took place on May 12 and 13, 2014 in Seoul, South Korea. The ministerial complements PACE-D activities in renewable energy and energy efficiency. The meeting discussed the present issues that the country is facing as well as noted the path of development that has been made.
  • The plan for development of Smart-Grid supported by USAID PACE-D Program and Ministry of Power in the form of draft was submitted to Forum of Regulators earlier. The proposed regulations have been deployed by MOP.
  • In 2013-2014, OPIC disbursed the full amount of a USD 250 million commitment to one of India’s premier infrastructure lenders to encourage expansion of its lending to renewable energy and infrastructure projects in India.
  • Since PACE’s inception, the seven U.S. agencies working on the PACE initiatives have mobilized about USD 2.38 billion in public and private resources for clean energy projects in India.

On January 26th, 2015, a US-India Joint Statement was released. The US reiterated its intent to support India’s proposed targets on clean energy and climate change. The statement includes seven measures:

  • Expanding PACE-R,
  • Expanding PACE-D,
  • Accelerating Clean Energy Finance,
  • Launching Air Quality Cooperation,
  • Initiating Climate Resilience Tool Development,
  • Demonstrating Clean Energy and Climate Initiatives on the ground, and
  • Concluding MOU on Energy Security, Clean Energy and Climate Change.

A cursory insight into the Partnership Agreement between US and India with respect to energy shows that India has definitely obtained advantages in its energy sector. The considerable amount of funds advanced by the US agencies provided a strong financial base upon which the energy efficient structures have been developed. Furthermore, the regular evaluation of the program has resulted into its expansion in those areas which were initially not accounted for but later their importance was recognised (like PEACE).

It would be not be out of context to quote President Obama’s words that this partnership will be one of the ‘defining partnerships’ of the 21st century. The pace with which it is working is evidence enough of the same.

BIBLIOGRAPHY

[1] US Agency for International Development

[2] The agencies include: USDOC, USDOE, USDOS, USAID, USTDA, OPIC, Ex-Im.

[3] Promoting Energy Access through Clean Energy

[4] Ministry of New and Renewable Energy

[5] Clean Energy Access Network

[6] They include: Ashden India Collective, CEEW, Indian Renewable Energy

Federation, SELCO Foundation, Shakti Sustainable Energy Foundation, The Energy and Resources Institute, The

Climate Group, The Nand and Jeet Khemka Foundation, UN Foundation, and WWF-India