The Rationale Behind the Transition to Clean Energy

In line with the Paris Agreement, India announced its ambitious Intended Nationally Determined Contributions to reduce Green House Gas emissions in 2015. These goals were revised and made even more ambitious in August 2022:

• The aim is to reduce the emission intensity of GDP by 45% (from 2005 levels) by 2030, a significant increase from the previous target of 33-35%.
• The goal is to create an additional carbon sink of 2.5-3 billion tonnes of carbon through afforestation efforts.
• The objective is to ensure that 50% of the cumulative electric installed power comes from non-fossil fuel sources by 2030, up from the previous target of 40%.

To achieve these targets, India has implemented numerous schemes to transition from carbon-intensive energy sources to cleaner alternatives.

The IEEFA/Ember Report

The report evaluated 16 Indian states, which collectively account for nearly 90% of India's total annual power requirement. The evaluation was conducted across four distinct dimensions:

1. Decarbonization: The shift of states from fossil fuel-based power resources to renewable energy resources.
2. Performance of the power system: The ability of the states to create a greener market pulse efficiently.
3. Readiness of the power ecosystem: The preparedness of states to transform their power systems while ensuring a reliable and regular supply of electricity.
4. Policies and political commitments: The willingness of states to promote innovative policies that facilitate the decarbonization of the power sector.

On the basis of these dimensions, the report introduced the SET (States Electricity Transition) scoring system to measure the performance of different states in their transition to clean energy systems.

Key Findings

• Among the 16 states evaluated, Karnataka and Gujarat have shown the most progress in transitioning towards greener electricity sources across all four dimensions. Karnataka, in particular, has excelled in decarbonizing the power sector, improving the performance of its power systems, and preparing its power ecosystem. The state has also demonstrated a strong commitment to promoting innovative policies in this area.
• In addition to Karnataka and Gujarat, Haryana and Punjab have also shown considerable progress in preparing for the transition.
• Some states traditionally known for their commitment to clean energy, such as Tamil Nadu (known for wind energy) and Rajasthan (known for solar energy), need to improve the readiness of their power systems.
• States like Bihar, Uttar Pradesh, and West Bengal are trailing behind the rest in almost all dimensions, indicating a need for improvement to meet India's national targets.

Major Recommendations:

1. There is a need for multifaceted and collaborative efforts to increase both the supply and demand of clean energy.
2. The existing transmission infrastructure needs to be upgraded to better integrate renewable systems (e.g. smart meters, smart grids, etc.).
3. States should participate more actively in Green Market mechanisms such as power banking, open access, Virtual (bilateral) power purchasing agreements (VPPA), Contracts for Difference, etc.
4. There is an immediate need to increase the availability and transparency of data on clean energy transition at the state level. States should collaborate with the central government to make this data accessible on national portals. This will help monitor the progress of states and India as a whole in achieving INDCs.
5. States should take proactive steps to implement clean energy transition policies like green manufacturing, direct benefit transfers , green energy open access, etc. Knowledge exchange between the frontrunners and the lagging states could be beneficial.