India's Green Energy Transition

Earth, home to over 8 billion species, saw record CO2 emissions in 2023. The temperatures rose by 1.4 °C, close to the 1.5 °C cap of the Paris Agreement, making it the warmest year. Recently, as we celebrated the World Environment Day on 5th June — the biggest day on environment observed to increase awareness about and action against this aggravating climate change situation — it is timely to reinterpret our fundamental rights and duties through a climate lens.

The Central Electricity Regulatory Commission (CERC) issued the Draft Central Electricity Regulatory Commission (Deviation Settlement Mechanism [DSM] and Related Matters) Regulations in April 2024. The commission found that the existing DSM pricing structure was leading to over-incentivisation of deviations from scheduled transactions, resulting in suboptimal grid operations and impacting grid stability. Generators were using DSM as a market medium rather than a tool to avoid frequency deviations and ensure grid stability.

India marked its presence as a serious contender in the green hydrogen space at the World Hydrogen Summit in Rotterdam, the Netherlands, which happened in May this year. The India Pavilion set up by the Ministry of New and Renewable Energy (MNRE) showcased the nation’s progress in the green hydrogen (GH2) domain and conveyed the government’s intent to deploy it for meeting the nation’s energy requirements sustainably.

Rooftop solar (RTS) has the potential to revolutionise India’s energy landscape, offering a sustainable, decentralised, and affordable solution to meet the country’s growing electricity needs and making consumers self-reliant. The country’s installed RTS capacity increased by 2.99 GW in 2023-2024, the highest growth reported in a year. As of March 31 this year, the total installed RTS capacity in India was 11.87 GW, per the Ministry of New and Renewable Energy.

Small industries or micro, small, and medium enterprises (MSMEs) are a crucial sector in India’s development. They have a large carbon footprint, partly because of the nature of energy consumption, with over 80% of the energy consumed being required for thermal processes to produce heat (e.g. in boilers and furnaces). These thermal energy demands have traditionally been met through fossil fuel sources (such as coal, natural gas, and pet coke), making MSMEs a hard-to-abate sector.

Our Annual Report 2023–2024 highlights how CSTEP's innovative solutions are driving a change on the ground. We continue to be the catalyst for change by conducting analysis, building tools to support decision-making, and developing innovative approaches to problems.

Bengaluru, 28 June 2024: The Micro, Small and Medium Enterprises (MSMEs) contribute to 31% of India’s gross domestic product, almost 50% of exports, and 57% of all employment in manufacturing sectors, making them crucial to the economy. However, they are highly energy- and emission-intensive.

The Micro, Small and Medium Enterprise (MSME) industries are still majorly dependent on fossil fuels for their energy requirements, making them particularly susceptible to increasing fuel prices. With energy costs having a substantial share in the overall manufacturing costs, the need for sustainable alternatives is crucial. Decarbonisation of MSMEs is necessary to reduce fossil fuel dependency in the industrial sector.

Electric vehicles (EVs) are a technologically evolving industry that can help reduce fossil-fuel consumption and the associated import

While clean power generation is crucial, India’s energy transition requires concerted efforts from all actors in the power sector value chain. This book chapter explored the critical role of India’s distribution companies (DISCOMs) where operational, financial, and political challenges accumulate. After presenting the institutional genesis of Indian DISCOMs, we discussed these issues and shed light on the strengths and opportunities of DISCOMs in enabling a successful transition to a clean energy future.