Clean energy transition in India: Towards a brighter future
India is the world’s third-largest energy producer and also a prominent energy consumer. The country has made significant progress in establishing a roadmap for clean energy transition through a range of measures that bolster renewable energy production and research. With an allocation of INR 10,222 crore to the renewable energy sector, Union Budget 2023-24 has demonstrated India’s strong commitment towards propelling the growth of clean and sustainable power sources. It has also earmarked INR 35,000 crore for priority capital investment towards energy transition, underscoring the nation’s commitment to achieve net-zero emissions and boost energy security.
India has always been focussed on international collaborations, such as the one with the International Renewable Energy Agency (IRENA) in early 2022, to scale up clean energy technologies and facilitate India’s long-term energy planning initiatives. India’s future energy transition targets achieving and installing 450 gigawatts of renewable energy by 2030 and providing 24-hour access to electricity for all.
Though India has made extraordinary efforts to develop solar and wind power, fossil fuels are still the mainstay of the electricity industry, making it difficult to take the road to clean energy transition. As of April 2023, the total installed coal, lignite, and diesel thermal power capacity in India are 205.2 gigawatts, 6.6 gigawatts, 24.8 gigawatts, and 0.58 gigawatts, respectively, together making up approximately 57% of the total share of the installed generation capacity of the power sector, while the share of renewables stands at nearly 30%, with the rest coming in from hydroelectric (~11%) and nuclear energy (~2%). Further, for a country like India—where fossil fuels power the economy—they are a lifeline for the local communities in many states. According to a recent government estimate, the coal industry
employs around 50 lakh Indians directly or indirectly. Despite seeing an improvement in rural electrification in recent years—from 83.4% in 2015 to 98.5% in 2020 (according to the World Bank)—for communities in the rural areas of India, erratic power supply, routine outages for several hours, and high operation and maintenance costs of transmission network and supply remain big bottlenecks.
While India has taken several initiatives to improve energy access (through a higher integration of renewables), the focus now must be on providing affordable and reliable power. Grid stability and resilience in power systems can be enhanced through a hybrid renewable energy model that includes solar and wind, and opens the floor for investment opportunities in distributed energy resources such as rooftop solar and offshore wind. At the same time, to overcome the unpredictable nature of policies, a long-term energy strategy is needed.
The National Energy Policy drafted by NITI Aayog in 2017 is a suitable framework and can guide the policy decisions of central and state governments. The policy enables the fulfilment of the government’s bold ambitions for India’s energy sector development, by making access to energy affordable for all through the extension of financial support to enable consumption by the vulnerable sections of society; and ensuring improved energy security through diversification of the sources of imports as well as increased domestic production of energy. Another objective of this policy is to ensure sustainability and economic growth through deep decarbonisation.
For monitoring, assessing, and enforcing energy policies, high-quality and timely energy data are crucial. To fill policy gaps and establish new laws, data on consumption by various industries, captive power plants, open-access energy procurement, etc., will be especially helpful. Thus, state services with access to such data and authorities acquiring the data must prioritise data structuring. Sharing data in the public domain would also help monitor progress. The process of energy transformation in India not only holds the key to sustainable development but also offers substantial business opportunities. According to a recent report, India could potentially create 3.4 million jobs by installing 140 gigawatts of new wind capacity and 280 gigawatts of solar capacity to achieve the 500 gigawatts non-fossil-fuel generation capacity by 2030.The clean energy transition is a revolutionary idea, which should be ingrained in policy, planning, and implementation for the country to effectively achieve its energy goals.
(This article was originally published as a CSTEP blog post.)
Bidisha Banerjee is Analyst in the Energy and Power team at CSTEP. She completed her MTech in Renewable Energy Engineering and Management from TERI School of Advanced Studies, New Delhi, and her BTech in Electrical and Electronics Engineering from Maharaja Agrasen Institute of Technology, New Delhi. Her areas of interest include renewable policy analysis, solar photovoltaics and its simulation, renewable energy technologies, and solid waste management models.