To meet India’s Nationally Determined Contribution targets, the centre and states must play a crucial role. However, renewable energy-rich states are not utilising their full energy potential, claims a report published by the Institute for Energy Economics and Financial Analysis, an international think-tank.
The report that appeared on February 26 found that Karnataka is leading in the transition to clean energy while Bihar, Uttar Pradesh, and West Bengal need to maximise their renewable energy potential. Rajasthan, Tamil Nadu, and Maharashtra, which were earlier front-runners in initiating reforms in the renewable sector, also falling behind in meeting their renewable potential, said the report. Progress has not been consistent across all the dimensions, particularly for Rajasthan and Tamil Nadu, it added.
Researchers analysed 16 Indian states that account for 90% of the country’s annual power requirement on four key dimensions of electricity transition: decarbonisation, the power system’s performance, power ecosystem readiness, and policy and political commitments.
Under decarbonisation, the researchers explored the state’s preparedness to shift away from fossil-based power. They studied states’ ability to incentivise greener market participation to understand the performance of the power system. For the third category (readiness of the power ecosystem), these researchers studied states’ power system reliability to ensure electricity supply for the transition.
Underlining the importance of the electricity sector for achieving India’s Nationally Determined Contribution targets, the report says, “Most of the Nationally Determined Contribution targets have the electricity sector as the foundation. Hence, it is important to set crystallised pathways for transitioning the electricity sector in India.”
The report explained the electricity transition as a means to move away from producing electricity through fossil fuels to producing power with renewable energy. This transition includes innovative policies, green market participation, efficient technologies, and reliable supply.
India’s global commitments, made at the COP26 climate conference in 2021, includes 500 gigawatts of non-fossil electricity capacity, 50% cumulative electric power installed from non-fossil fuel resources, reducing carbon emissions by one billion tonnes and reducing emissions intensity of its gross domestic product by 45%. The government has set a deadline of 2030 to achieve all these targets as well as achieve net zero by 2070.
Dependence on coal
To understand the state’s decarbonisation performance, the study looks at five criteria, including renewable energy mix in the state’s power supply, the potential of renewable energy utilised, old coal power capacity in operation, the emission intensity of the power sector, and state energy efficiency index.
Based on these criteria, researchers found that states like Karnataka, Rajasthan, Punjab, and Haryana are doing well across parameters. Chhattisgarh, West Bengal, Bihar, and Uttar Pradesh scored low on most parameters.
Gujarat and Maharashtra, which are performers in the renewable sector, appeared mid-table in the ranking which came as a surprise.
The dependence on the coal sector emerged as one primary reason for those states that were ranked low. Gujarat still has a considerable proportion of older coal power plants in its coal fleet (19%). Similarly, 19% of Maharashtra operational coal fleet is older than 25 years. Their renewable energy share in total energy capacity is 10% and 11%, respectively.
Among all the states, Uttar Pradesh had the highest share of coal power capacity older than 25 years (35%). States like Chhattisgarh, Odisha, and West Bengal, heavily dependent on coal, must catch up in utilising their renewable potential, says the report.
Overall performance
To study the state’s power system, researchers delved into the performance of the power distribution companies, outstanding payment to power developers, GDAM participation, and performance on individual renewable targets.
GDAM stands for Green Day Ahead Market. It is a green energy market mechanism where any entity can produce and supply renewable energy to discoms/states.
Karnataka again appeared on top here, followed by Punjab, Telangana, and Gujarat. Karnataka purchased and sold the highest electricity volume (~ 614 million units). The southern state is also one of the few Indian states which crossed its renewable energy targets for the end of 2022. Gujarat purchased and sold just ~27 million units through Green Day Ahead Market, as per the report.
In this category, researchers also explored Aggregated Technical and Commercial losses. It is a combination of energy due to several reasons, including technical, theft and losses due to inefficiency in billing. The Indian government has targeted to keep Aggregated Technical and Commercial losses between 12%-15%. However, the report said renewable energy-rich states like Rajasthan and Maharashtra lag because of Aggregated Technical and Commercial losses. The loss stood at 18.9% in Maharashtra, while for Rajasthan, it was 18%.
In the distribution companies rating, Karnataka, which is the top performer in other categories, did not score well. Madhya Pradesh and West Bengal were the poorest in terms of performance of the power system.
Regarding achieving renewable targets, Telangana and Gujarat were other front-runners in terms of performance of power systems. Telangana is the best-performing state in meeting its renewable energy targets set for the end of 2022 (two gigawatts), with an installed capacity of five gigawatts. Gujarat has installed 18 gigawatts of renewable energy by September.
Are we ready?
To understand if states are ready for efficient electricity utilisation, the researchers looked into the quality of supply/power shortage, feeder segregation, smart metering, and electricity intensity of gross domestic product. Installation of smart meters is meant to overcome metering issues, leading to reduced Aggregated Technical and Commercial losses. Feeder segregation ensures two separate feeders for agricultural and non-agricultural connections to ensure timely action to manage power loads.
The report found that Karnataka has also exceeded its feeder segregation targets. It also completed 100% of its smart meter target. Andhra Pradesh also scored well in most of these parameters. Gujarat met its smart meter and segregation targets too. However, progress on many of these parameters appeared lagging for other renewable-rich states like Rajasthan and Tamil Nadu.
For example, Rajasthan reported the highest shortage of power supply of 489 million units in 2021-’22. It also met only 39% of its feeder segregation target and 70% of its smart meter target. Tamil Nadu was also midway in the ranking in this segment because of the slow growth of feeder segregation.
While Bihar performed well in feeder segregation (218% success) and low intensity of the state gross domestic product, it appeared lagging because of power shortage and poor smart meter coverage (45%).
Uttar Pradesh scored worst in smart meter progress with 29% coverage of its target. Haryana’s smart meter coverage was 53%.
Punjab and Haryana
Haryana and Punjab showed surprising results, moving rapidly towards electricity transition, noted the report. Saloni Sachdeva Michael, Energy Analyst at Institute of Energy Economics and Financial Analysis and one of the report’s co-authors, told Mongabay-India that Haryana and Punjab were a pleasant surprise.
“Both states have better tapped into their renewable energy potential than others. Haryana is utilising 19% of its potential, and Punjab is approximately 25%. If we look at the distribution companies’ health and outstanding payments by the them to generators, both states have shown significant improvements. Punjab has reduced its overdue/owed payment from 116% in March 2018 to 53% in March 2022. For Haryana, this fraction increased from 88% in March 2018 to 91% in March 2022; despite the increase, it was still better than other states,” she said.
Commenting on the lower renewable energy intake of many states, Raghav Pachouri, leading Energy and Power sector modeling in Vasudha Foundation, told Mongabay-India that it is likely to be tackled with the proposed Electricity Amendment Bill, which makes renewable power obligation compliance mandatory and fines for defiance.
“The proposed Electricity Amendment Bill 2022 has a provision of imposing a penalty in case of non-compliance with renewable power obligation. Further, the bill has also proposed that the renewable power obligation for a state should not be below the minimum percentage prescribed by the central government. These amendments will force states to integrate more renewable energy in their electricity portfolio,” he said. The bill, however, is yet to see the light of day. After getting introduced in the Lok Sabha was sent to a Parliamentary Committee for more scrutiny.
This article first appeared on Mongabay.
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