India's Renewable Energy Challenges Ahead

Notes on India's Energy Transition and Carbon Emissions

Current Energy Landscape

• Installed Capacity: As of June 2025, non-fossil fuel sources constitute about 50% of India's total installed electricity capacity.
• Grid Emission Factor (GEF): Increased from 0.703 tCO₂/MWh (2020-21) to 0.727 tCO₂/MWh (2023-24) according to the Central Electricity Authority (CEA).
• Electricity Generation: In 2023-24, renewables (including hydro) contributed only 22% of total electricity generated; the remainder is primarily from fossil fuels, especially coal.

Capacity and Generation Disparity

• Renewables run at 15-25% capacity utilization compared to coal and nuclear, which run at 65-90%.
• India’s growing electricity demand is predominantly met by coal, particularly during peak usage times when renewables are insufficient.

Importance of Energy Efficiency

• Energy efficiency is termed as the "first fuel", which helps reduce overall demand and reliance on coal.
• The Bureau of Energy Efficiency reported a savings of approximately 200 Million Tonnes of Oil Equivalent (Mtoe) of final energy from FY2017-18 to FY2022-23, translating to around 1.29 gigatonnes of CO2 equivalent savings and close to ₹760,000 crore in financial savings.
• Effective scaling of energy-efficient appliances and processes is essential for reducing coal consumption and improving the integration of renewable energy.

Recommendations for Energy Transition

1. Battery Integration: Enable homes and offices to connect batteries as virtual power plants to manage peak demand.
2. Appliance Standards: Accelerate the implementation of higher appliance efficiency standards and promote market shift towards high-efficiency products (4- and 5-star rating).
3. Support SMEs: Aid small and medium enterprises to adopt efficient technologies, including motors and pumps.
4. Flexible Pricing: Implement tariff structures that incentivize consumers to adjust usage in alignment with renewable availability.
5. Scrappage Incentives: Introduce incentives for replacing old, energy-inefficient appliances.
6. Electricity Services Procurement: Allow distribution companies to procure green cooling services that use RTC (Round-the-Clock) clean power.

Future Projections

• The Central Electricity Authority's National Electricity Plan anticipates a reduction in GEF to 0.548 by 2026-27 and further to 0.430 by 2031-32, necessitating a system-wide flexible approach focusing on energy efficiency.

Emission Intensity Reduction

• From 2005 to 2019, India managed to cut emissions intensity by 33%, as reported in its Fourth Biennial Update Report to the UNFCCC.
• Continued and balanced efforts are essential to sustain this trend, combining renewable energy expansion with efficiency improvements across various sectors.

Conclusion

To achieve a decarbonized grid, prioritizing energy efficiency is crucial, along with leveraging flexible energy systems that reduce dependency on fossil fuels while optimizing the use of renewables.