Seeing India’s energy transition through its states

Context

In the upcoming G20 forum, India intends to propose a diversified approach to energy pathways that considers the distinct contexts and development trajectories of countries.
India’s own domestic energy transition will be determined by multiple pathways of Indian states.
The effective transition will require bridging the gap between national ambitions and State-level implementations because states are critical actors in India’s energy transition.

Renewable Energy and Energy Transition

Renewable energy is energy derived from natural sources that are replenished at a higher rate than they are consumed. Sunlight and wind, for example, are such sources that are constantly being replenished.
Energy transition refers to the global energy sector’s shift from fossil-based systems of energy production and consumption — including oil, natural gas and coal — to renewable energy sources like wind and solar, as well as lithium-ion batteries.

India’s Target

Reduce the overall carbon intensity: India aims to reduce the overall carbon intensity and achieve 50 per cent of power from non-fossil fuel sources by 2030, which is currently at 43 per cent.
Clean Energy: India has made a commitment to clean energy with ambitious targets like 500GW of non-fossil, including 450 GW Renewable Energy (RE) capacity addition and 43% RE purchase obligation by 2030.
Net Zero Target: India has set itself an ambitious long-term goal of reaching net zero emissions by 2070.

India’s Policy Framework in the Direction of Energy Transition

India’s targets are supported through complementary policy and legislative mandates(Energy Conservation (Amendment) Act 2022), missions (National Green Hydrogen Mission), fiscal incentives (PLIs) and market mechanisms (upcoming national carbon market).
The Energy Conservation Amendment Act 2022
- It mandates the use of non-fossil fuel sources including green hydrogen, green ammonia, biomass and ethanol for energy and feedstock in industries.
- It also gives the power to the Central Government to establish carbon markets.
In 2022, India updated its Nationally Determined Contributions (INDC)under the Paris Agreement to reflect its aim of achieving 50% cumulative electric power installed capacity from non-fossil fuel-based energy sources by 2030.
India aims to produce five million tonnes of green hydrogen by 2030.

India’s Progress in Energy Transition

Solar, wind, and other RE sources are already replacing the historic share of coal and gas in the power generation mix.
The share of fossil fuels in the installed capacity has reduced from 67% in 2017 to 57% in 2023.
As of Feb 2023, RE Sources, including large hydropower, have a combined installed capacity of 178.9 GW.
The installed capacity for renewables is:
- Wind Power: 42.6 GW
- Solar Power: 66.7 GW
- Biomass/Co-generation: 10.2 GW
- Small Hydro Power: 4.94 GW
- Waste to Energy: 0.55 GW
- Large Hydro: 4.85 GW

Challenges to India’s Energy Transition Effort

Incomplete targets: While India made significant progress towards its 2022 target of 175 GW renewable energy capacity, the target remained incomplete due to various factors.
Disparities on state level:Only a few States, such as Gujarat, Karnataka, and Rajasthan, were able to meet their individual renewable energy targets.
Implementation challenges:The energy transition faces multiple challengessuch as infrastructure development, clear policy framework, availability of finance.

Significance of States in India’s Energy Transition

Critical to Meet National Targets
- While the central government sets goals and provides support, the actual realisation of these targets depends on how they align with State priorities and capabilities.
- State’s role in implementing and their active participation is essential for achieving national energy goals.
Laboratories of Policy Innovations
- States in India have been instrumental in driving policy innovations, particularly in the renewable energy sector.
- Early initiatives taken by States like Gujarat, Rajasthan, Maharashtra, and Tamil Nadu have significantly contributed to the uptake of renewable energy at the national level.
State’s Role to address Legacy Issues: Legacy issues in the electricity sector, such as high losses, unreliable supply and service quality, must be addressed at the State level.
The Diversity Across States
- States have unique contexts, capabilities, and opportunities that need to be considered during the energy transition.
- Recognizing and engaging with State-level diversities is essential for developing targeted and effective policies that consider regional nuances.

Importance of State-Level Framework

To understand plan, actions, and governance regarding the national energy transition mission.
To broaden the transition discourse:By applying a state-level framework, the focus of the energy transition will expand tooutcome-oriented discussions.
To ensure public legitimacy: It could enable participation of stakeholders in the processes and ensure public legitimacy and buy-in to complex decisions.
To enable more evidence-based policy choices towards a pragmatic, yet accelerated, scale and pace of energy transition.

Way Forward

Systematic Identification of States’ Potential: States with the potential of contributing to RE installations and the 2030 clean energy transition goal need to be identified and leveraged systematically.
Planning on National Level: This process involves defining transition goals, making policies, and allocating funds to promote RE adoption.
State Level Engagement and Implementation: States have diverse priorities, and capabilities and therefore engagement with states is crucial for implementation of goals set by Central government.

Conclusion

The 2030 RE goal requires participation from all the states, with the rate and extent of the transition depending on RE resolutions adopted at the state level.
Different Stateshave different challenges and theyrequire tailored solutions to overcome barriers and ensure smooth implementation to realise India’s energy transition.