Karnataka and Gujarat have emerged as India’s frontrunners in the transition to clean electricity, a report from the Institute for Energy Economics and Financial Analysis (IEEFA) and Ember stated.
According to the report, all the states need to improve their preparedness for transition and deploy more energy storage solutions for better renewable energy integration.
It added that West Bengal had scored low across all the parameters and its outstanding payments to generators have increased by 500 percent from March 2018 to March 2022. However, the state discoms have shown improvement in performance as per the recent Power Finance Corporation Ltd (PFC)’s report.
Apart from West Bengal, Bihar and Uttar Pradesh also have to strengthen their clean electricity transition performances and should maximise their renewable energy generation potential along with an increase in commitment to move away from fossil fuels-based electricity.
Vibhuti Garg, the report’s co-author and Director of South Asia at IEEFA, said India’s revised nationally determined contribution (NDC) targets have put the country on the right path for transitioning its electricity sector and to achieve those targets, the Centre needs the cooperation of the states to move faster in their clean electricity transitions.
Apart from boosting renewable energy capacity and storage, the report further suggested that states take a multi-dimensional approach towards clean electricity transition, which includes efforts on the demand side.
The report added that even the long-considered green energy leaders like Rajasthan and Tamil Nadu have to improve the readiness of their power ecosystems for clean electricity transition. In addition to managing the demand and supply of electricity, ensuring effective utilisation, monitoring, and tracking of electrons is also a very important factor, it added.
The report also highlights that innovative bilateral financial markets mechanisms like virtual power purchase agreements (VPPAs) and contracts for difference (CfD) have huge potential to open up the market and give buyers and regulators the required assurance on handling intermittent renewable energy generation.
Another key area where states can do better is data availability and transparency. To monitor progress effectively and course correct when necessary, the report called for data availability and transparency improvement.
Also, the report found that the states need to develop a more holistic and circular approach towards handling solar panel, battery and electric vehicle waste as this would become even more crucial as the country installs new manufacturing units under the Atmanirbhar Bharat scheme.
The report analysed 16 Indian states that account for around 90 percent of the country’s annual power requirement across four dimensions — the state’s preparedness to shift away from fossil-fuel-based power, its ability to incentivise greener market participation, its power system's reliability and its policies pushing for power sector decarbonisation.
Based on this analysis, the report authors devised the states’ electricity transition (SET) scoring system, which measures the performance of the different states in the transition to clean electricity.
