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Karnataka and Gujarat leading in the clean energy transition: report

Improvement needed in Rajasthan and Tamil Nadu, Bihar, Uttar Pradesh, and West Bengal should make more use of their renewable power capacity

By Pallav Jain
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Karnataka and Gujarat are the Indian states making the most progress in showing overall preparedness and commitment to the clean energy transition, new research has found.

A joint research by the Institute for Energy Economics and Financial Analysis (IEEFA) and Amber analyzed 16 Indian states. All these states together account for 90% of the country's annual power requirement in all four dimensions. These dimensions track the state's readiness to move away from fossil-fuel-based electricity, its ability to encourage green market participation, the reliability of its electricity system, and policies advancing the decarbonization of the electricity sector.

IEEFA and Amber analyzed 16 Indian states progress in clean energy transition
Source: IEEFA

States Electricity Transition Scoring System

Based on this analysis, the authors of the report created the States Electricity Transition Scoring System, which measures the performance of different states in the clean energy transition.

Report co-author and Director, South Asia, IEEFA, Vibhuti Garg, says, “India's revised Nationally Determined Contribution (NDC) targets have put the country on the right track for its power sector transformation. To achieve those goals, the Center now needs the cooperation of states to accelerate their clean electricity transition. This means that states have to redouble their efforts to chart the path to electricity transition, and both central and state governments have to monitor progress and take corrective measures as needed."

The report outlines focus areas for states to improve their preparedness for change, such as harnessing wind and solar generation potential and deploying more electricity storage solutions, such as batteries and pumped hydro, for better renewable power integration.

“Bihar, Uttar Pradesh, and West Bengal have work to do to strengthen their clean energy transition performance. These three states should maximize their renewable electricity generation capacity, and at the same time increase their commitment to move away from fossil-fuel-based electricity," says report co-author Saloni Sachdeva Michael, who is at the IEEFA Energy analyst.

In addition to increasing renewable energy capacity and storage, the report recommends that states adopt a multi-pronged approach towards a clean energy transition that includes demand-side efforts.

With more renewable electricity coming online, the report also recommends that states pay more attention to strengthening their electricity systems.

The report highlights the increased participation of states in green market mechanisms as a key element of the clean energy transition.

“We found limited participation of states in green market mechanisms like Green Day Ahead Market (GDAM), Green Term Ahead Market (GTAM), and more,” says Sachdeva Michael.

She adds, “There is an opportunity to support states with less renewable electricity capacity to develop a more robust market. To achieve this, states need to take immediate action such as removing banking restrictions and not only monthly but quarterly and allowing annual banking of renewable electricity, particularly for wind generation."

The report also highlights that innovative bilateral financial markets mechanisms such as Virtual Power Purchase Agreements (VPPAs) and Contracts for Difference (CFDs) need to open up markets and provide assurances to buyers and regulators to deal with intermittent renewable power generation There is great potential to give.

Data availability and transparency

Another important aspect where states can do better is data availability and transparency. To effectively monitor progress and correct where necessary, the report calls for improvements in data availability and transparency.

Also, the report finds that states need to develop a more holistic and circular approach to dealing with solar panel, battery, and electric vehicle waste. This will become even more important as India is setting up new manufacturing units under the Atmanirbhar Bharat plan.

Finally, the report highlights that many states must also bridge the gap between the intent of their electricity transition policies and their implementation.

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