Karnataka and Gujarat have displayed continued commitment towards clean energy transition with both states effectively integrating renewable energy (RE) into their power sectors.

Karnataka and Gujarat exemplify strong performance across dimensions, integrating renewable swith prepared power systems and robust market enablers. These states have effectively integrated renewable energy sources into their power sectors, making strong strides in decarbonisation.

Moreover, their power systems are adequately prepared to further transition toward sdecarbonisation, complemented by robust market enablers facilitating future growth. However, states still have significant work to do in strengthening decentralised renewable energy (DRE) penetration and short-term market participation.

The 2024 Indian States’ Electricity Transition (SET), a joint report by the Institute for Energy Economics and Financial Analysis (IEEFA) and Ember, reveals that both the states are making big strides in decarbonisation and are adequately prepared to accelerate the transition with robust market enablers facilitating future growth.

CO2 emissions

Given that electricity generation continues to account for nearly half of India’s annual CO2 emissions (1.18 gigatonnes in 2023), accelerating the transition to cleaner generation sources is imperative for the country to meet both its developmental and climate goals, the report said.

While the Centre has already taken several policy measures to foster the electricity transition, states also need to move in the right direction since they have considerable control over regulations and policies, it added.

The first edition of the SET report in 2023 analysed 16 states to help identify areas that require action and attention at the state level. This year’s report builds on that work by expanding the scope to 21 states. They represent about 95 per cent of India’s annual power demand in the past seven financial years (FY) 2018 to 2024 (up to November).

Study findings

States such as Kerala, Haryana, Andhra Pradesh, Punjab, Himachal Pradesh and Maharashtra showed strong progress in one or more of the three dimensions — Decarbonisation, Readiness and Performance of the Power Ecosystem and Market Enablers. But they were also significantly slower in one of the three dimensions.

On the other hand, Odisha exhibits preparedness to embrace electricity transition through the readiness of its market enablers. However, it struggles with the actual decarbonisation of its power systems.

Jharkhand, Bihar, West Bengal and Uttar Pradesh moved slower than others again in SET 2024, despite the changes to our assessment parameters. There is a need to prioritise comprehensive strategies and interventions to foster sustainable growth and transition in their power sectors.

Constant monitoring

IEEFA Director South Asia Vibhuti Garg, who is also the report’s contributing author, said that cyclical weather conditions coupled with faster economic activity is pushing India’s peak electricity demand higher every year.

“While the central government is taking steps to integrate more renewable energy into the grid, states, too, need to be prepared to do so. Gauging subnational progress now requires constant monitoring of several parameters at the state level. A purely national overview can often overshadow subtle intricacies at the state level, which may stymie the country’s electricity transition,” she added.

Another contributing author of the report, Aditya Lolla, who is the Asia Programme Director at Ember, acknowledged that some states have developed progressive steps, such as boosting decentralised renewable energy deployment, promoting solar pumps for agricultural needs, and enhancing storage solutions to ensure more renewable energy in their electricity systems.

Clean electricity

“But, the transition to clean electricity is still in its infancy in many states. These states should look to accelerate the efforts to access the benefits of a transition to clean electricity and to ensure that they are not left too far behind the better-performing states,” he added.

Despite achieving relative success in decarbonising the sector thus far, states must address deficiencies in readiness and market enablers to sustain their momentum,” IEEFA India Clean Energy Transition Energy Specialist Saloni Sachdeva Michael said.

“We recommend the strengthening of state-level regulatory ecosystems. This not only ensures compliance but also promotes growth, data tracking and monitoring, and a conducive environment for business,” she added.