With its immense potential for renewable energy generation, India stands at a crossroads, ready to embrace a cleaner, greener energy landscape. However, several hurdles must be overcome, and collaboration between the government, private sector and citizens will be needed for a successful energy transition.

Current barriers towards net zero
One of the primary challenges identified in India is the prevailing deadlock between the central and state governments. The central government has been trying to privatise the underperforming and indebted ‘discoms’ (electricity distributors licenced by the state), but the state governments have shown resistance towards this policy.

This situation has been worsened by corruption, which poses a significant threat to effective governance and the implementation of sustainable policies.

India is also a highly populated country, making the management of peak electricity demand a challenge. Additionally, the lack of a reliable and comprehensive transmission grid makes the transition to 100% renewable energy more difficult.

Another point of friction towards this transition is the currently underutilised capacity of high wind areas due to the focus on solar energy and a lack of supportive policies. Where wind turbines have been installed, they are often old and less efficient, and therefore fail to capitalise on India’s enormous areas of high-speed winds.

India stands on the cusp of a significant energy transition, fuelled by its vast renewable potential and increasing demand for sustainable solutions.
 

Potential solutions
To encourage collaboration between central government and state, roadmaps, similar to the European Union’s Effort Sharing Regulation or Emissions Trading System, could be developed for each state, outlining specific goals and frameworks to achieve renewable energy targets.

India did recently submit its first Long-term Strategy for Low Carbon Development (LT-LEDS). A bill was also introduced in the Indian parliament to provide a framework for achieving net zero emissions by the year 2070. By aligning the efforts of the central and state governments, India can effectively harness its underutilised potential.

Privatisation of discoms has already shown promise in places like New Delhi, where the government provides those consuming 201–400 units of monthly electricity with a 50% subsidy, capped at INR 850 ($10). Encouraging public-private partnerships and open-market tenders for renewable energy projects can boost competition and lower the capital barrier to entry in the sector. This approach would also eventually pave the way for a free energy trade market, allowing consumers and companies to choose their electricity sources.

To tackle the issue of corruption, regulatory bodies should be established as constitutional entities with the mandate to oversee sectors of national importance, free from political interference. Drawing inspiration from successful examples such as the Election Commission of India, these bodies would ensure accountability, minimise corruption and regulate key areas such as discoms.

India’s newly discovered lithium deposits, amounting to 5.9mn tonnes (the sixth largest reserves in the world), can contribute immensely towards the transition. Electric vehicle (EV) adoption is also crucial and so to alleviate range anxiety and promote EVs, the government should consider subsidising fleet owners for electrification, particularly in metropolitan areas with extensive taxi fleets.

Moreover, standardisation in the private sector, especially in battery manufacturing, is vital to driving demand for electric transport. Collaborative efforts among players in the two and three-wheeler segment to standardise battery packs can help drive down costs and increase market accessibility.

Electrifying the public transport network, including city buses, would further contribute to reducing metropolitan pollution levels. The massive Indian railway network is currently undergoing electrification, with 14 states already 100% electrified in 2023. Additionally, establishing low-emission zones, following Europe’s example, can further combat pollution in cities by reducing tailpipe emissions.

Energy production
The laggard wind sector could get a boost if the government makes efforts to repower old plants, encourage hybrid parks and make investments into offshore wind farms. Furthermore, exploring hybrid wind and solar systems and pumped hydro projects can optimise renewable energy generation and address the challenges of off-peak demand, ultimately reducing reliance on coal.

The biofuel and biogas industry holds great promise for India, given the fact that the majority of the Indian population still depends on agricultural practices for sustenance. There is an opportunity to reduce stubble burning, generate additional income for farmers and decrease coal consumption in thermal plants. Government support for ethanol blending and utilising biomass availability from agricultural residue can further boost the biofuel sector.

Although high setup costs and limited technological progress pose challenges, companies with substantial resources can capitalise on the immense potential in this sector.

While hydrogen fuel cell technology remains uncertain and commercially unviable at present, the focus should be on improving grid efficiency. Investment in biofuels, battery manufacturing and renewable power plants align more closely with India’s current energy landscape and could yield substantial benefits in both the near and long-term.

Is India prepared?
India is on the cusp of a significant energy transition, fuelled by its vast renewable potential and increasing demand for sustainable solutions. This is reflected in various indexes: India has risen by two places to #8 in the Climate Change Performance Index; the World Economic Forum’s Energy Transition Index points to positive developments and improved India’s score to 54.3 in 2023 from 53 in 2021; the Sustainable Development Report also raised India’s score from 60.3 in 2021 to 63.45 in 2022.

While challenges such as corruption, grid optimisation and underutilised potential need to be addressed, the country’s readiness for change is evident. By exploring privatisation, better regulation and digitalisation, India can overcome hurdles and pave the way for a cleaner, greener future.

Awareness campaigns and educational initiatives can also play a vital role in fostering a culture of sustainability. With timely action and collective efforts, India can emerge as a global leader in the energy transition, reaping the economic, environmental and social benefits that lie ahead.

The views and opinions expressed in this article are strictly those of the author only and are not necessarily given or endorsed by or on behalf of the Energy Institute.