CHENNAI : While hosting the G20 Presidency for the first time, India championed a climate change-focused agenda and pushed the group of countries to agree to tripling global renewable energy capacity by 2030. India reiterated these commitments at COP28 in Dubai, where it also agreed to double energy efficiency by 2030.
Yet, emissions are rising. Although India was the fastest-growing G20 economy, clocking a 6.7% growth rate of gross domestic product (GDP) in 2023, its carbon dioxide (CO2) emissions also grew at a rapid pace of 7% to reach 2.8 gigatonnes (Gt). Electricity generation remains the country’s largest emitter by far, contributing nearly half of India’s annual CO2 emissions, with 1.18Gt in 2023.
Transitioning to clean sources of generation can help meet both India’s developmental and climate goals. According to the International Energy Agency, 60% of India’s electricity emissions increase in 2023 was because of cyclical weather-related events such as harsh summers and weak monsoons. This year, too, a harsh summer is likely to push India’s peak power demand to a record high of 260 gigawatts (GW). But a harsh summer also means more opportunity for increased use of solar power.
However, not all states are moving at a pace good enough to achieve desirable goals. A report titled “Indian States’ Electricity Transition: 2024” was released by the Institute for Energy Economics and Financial Analysis (IEEFA) and Ember that looks into the performance of 21 states that collectively contributed to about 95% of India’s annual power demand in the past seven financial years. The states were assessed based on three key parameters — decarbonisation, readiness and performance — of the power ecosystem and market enablers. The analysis shows the progress of states in the electricity transition is far more uneven. Some states have developed progressive steps, such as boosting decentralised renewable energy deployment, promoting solar pumps for agricultural needs, and enhancing storage solutions to ensure more renewable energy in their electricity systems.
Haryana, for instance, plans to skyrocket its solar energy capacity by 22 times, installing 6,000 megawatts (MW) by 2030. States such as Uttar Pradesh, Rajasthan and Andhra Pradesh are the only ones with notified green hydrogen policies. Gujarat was set to unveil its green hydrogen policy last year, but it is still in the draft stage. The Karnataka Energy Department has launched the state’s ambitious plan to transition millions of irrigation pumps to solar energy to save substantial amounts as subsidy every year.
But, several other states, such as Jharkhand, West Bengal, Bihar and Odisha, need to do much more. Tamil Nadu is a curious case. Tamil Nadu exhibits a significant contribution to renewable energy generation within the state, accounting for 9% of the total capacity addition by the 21 states over the past four years. However, Tamil Nadu has one of the lowest share of renewable energy consumption in the country. Only 16% of Tamil Nadu’s total consumption is from renewable energy sources. This was primarily due to the bad performance of its DISCOMs and lower than expected distributed solar uptake (2%). The report said the state should focus on strengthening the penetration of rooftop solar and solar pumps along with utility-scale projects. The state DISCOM registered a loss of `91.92 billion (US$1.1 billion) for FY2023, `600 million (US$ 7.2 million) more than the previous year, despite a tariff hike.
Despite having an existing renewable energy policy applicable with a solar target of 9,000 MW by 2023, non-adoption of green open access rules impacted the state’s score. Tamil Nadu demonstrates progress in developing the EV ecosystem through right policy signals, including fiscal and non-fiscal incentives, subsidies for charging infrastructure and innovative EV tariff and battery-swapping policies. But, it just has one charging station per 321 EV registrations as of January, 2024.
Overall, Karnataka and Gujarat emerged as top performers as they effectively integrated renewable energy into their power sectors, have adequate preparedness to further the electricity transition, and have robust market enablers to facilitate the future growth of clean electricity. “Cyclical weather conditions coupled with faster economic activity is pushing India’s peak electricity demand higher every year. While the central government is taking steps to integrate more renewable energy into the grid, states, too, need to be prepared to do so. Gauging subnational progress now requires constant monitoring of several parameters at the state level. A purely national overview can often overshadow subtle intricacies at the state level, which may stymie the country’s electricity transition,” says the report’s contributing author, Vibhuti Garg, Director – South Asia, IEEFA.
Aditya Lolla, Asia Programme Director, Ember, who is also the report’s contributing author, said some states have developed progressive steps, such as boosting decentralised renewable energy deployment, promoting solar pumps for agricultural needs, and enhancing storage solutions. But, the transition to clean electricity is still in its infancy in many states.
Key findings
Consistent performers
Karnataka and Gujarat exemplify strong performance across dimensions, integrating renewables with prepared power systems and robust market enablers
These states have effectively integrated renewable energy sources into their power sectors
Kerala, Haryana, Andhra Pradesh, and Punjab also emerge as frontrunners, demonstrating commendable progress in two out of the three dimensions. However, a closer analysis reveals areas of weakness within each state’s performance
Main recommendations
The recent Ministry of Power (MoP) directive to all states and UTs emphasises the need for compliance with the Resource Adequacy Guidelines. These guidelines require DISCOMs to prepare a resource adequacy plan for a 10-year horizon on a rolling basis, covering the period from FY2025 to FY2034, to meet their requirements. Only Maharashtra, Punjab and Madhya Pradesh have notified such plans
States should also ensure alignment of the guidelines with the Indian Electricity Grid Code (IEGC) 2023 to maintain adequate reserves to handle variability of renewable energy resources