As per a recent report by the Institute for Energy Economics and Financial Analysis (IEEFA) and Ember, the Indian states of Karnataka and Gujarat are leading the transition towards clean electricity. Ember, which is an independent climate and energy think tank, collaborated with IEEFA to analyze energy markets, trends, and policies.

What are the Highlights of the Report?

A scoring methodology was established by the report ‘Indian States’ Energy Transition’ to evaluate the performance of 16 states that contribute to 90% of India’s electricity production based on four comprehensive parameters.

1. Decarbonisation: This parameter assesses a state’s progress in reducing carbon emissions from the power sector. It includes indicators such as the share of renewable energy in the state’s electricity mix, the growth rate of renewable energy capacity, and the carbon intensity of electricity generation.
2. Performance of the power system: This parameter assesses the reliability, affordability, and efficiency of the power system in a state. It includes indicators such as the average duration of power outages, the percentage of households with access to electricity, and the average cost of electricity for consumers.
3. Readiness of the power ecosystem: This parameter assesses a state’s preparedness to transition to a low-carbon energy system. It includes indicators such as the availability of skilled workforce, the presence of energy research and development institutions, and the level of innovation in the energy sector.
4. Policies and political commitments: This parameter assesses the policy and regulatory framework in a state to support the energy transition. It includes indicators such as the existence of renewable energy targets, the level of investment in renewable energy, and the participation of the state in national and international climate change initiatives.

Assessment

In the analysis of 16 states, only Karnataka received a good score in all four aspects of the clean energy transition.

Furthermore, Karnataka surpassed its target for segregating feeders by 16% and achieved 100% of its smart meter installation goal.

Gujarat was slightly behind Karnataka in terms of decarbonization efforts.

Haryana and Punjab demonstrated encouraging progress in their efforts towards energy transition.

In contrast, states such as West Bengal, Bihar, and Uttar Pradesh have a long way to go in this regard. West Bengal scored poorly in all four parameters, and its outstanding payments to generators increased by 500% between March 2018 and March 2022.

Rajasthan and Tamil Nadu need to enhance their readiness for the power system transition.

Suggestions

To achieve a clean energy transition, it is advised that states adopt a multi-pronged approach that includes demand-side initiatives in addition to the increase in renewable energy capacity and storage. Innovative financial market mechanisms such as virtual power purchase agreements (VPPAs) and contracts for difference (CfD) can play a significant role in promoting the intermittent renewable energy generation market, providing both buyers and regulators with the necessary assurance. The report highlights the importance of improving data availability and transparency to effectively monitor progress and make necessary corrections.

What is India’s Clean Energy Target?

India has made a pledge to produce 50% of its electricity from non-fossil fuel sources and to decrease the emissions intensity of its Gross Domestic Product (GDP) by 45% by 2030 in accordance with its international commitments. In order to achieve this goal, it is necessary for the States to modify their electricity infrastructure to facilitate the integration of various power sources including solar, wind, hydropower, and conventional fossil fuels. With the implementation of revised Nationally Determined Contribution (NDC) targets, India has taken a step forward in transitioning its electricity sector.

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