Decarbonising

Decarbonization of India’s Energy Sector
Policy Roadmap to Achieve Clean Energy Targets
Under the guidance of: Dr. Ameet Sao
A collaborative effort of:

Shrenik Jain
Vatsal Singh
Introduction
o India’s plan is to create a new clean

energy system that is reliable, affordable,
sustainable and energy independent.
o Long term goal is to have Net Zero

emissions by 2070.
o Short term goals for 2030:

• 50% of energy from renewable
sources.
• Non-fossil fuel capacity of 500 GW.
• Reduction of carbon emissions by 1
billion tonnes.
• Decrease carbon intensity by 45%.
Current Energy Landscape
o Currently the nation’s energy requirements are

primarily met by Coal and Crude oil.
o Renewables, Hydro & Nuclear energy account

for 10.3% of the total energy comsumption.
o 35-40% of our energy requirements are

dependent on imports.
o India has high potential for solar, wind and tidal

energy resources.
Future Electricity Demand
Power Demand & Cost estimates

7
6
6
o Estimated power demand of 3.5 trillion units (TUs)
by 2036-37 to support a growth rate of 7.3%.
5
4
4
3.5 o Current power demand is approximately 1.37 TUs.
3
o According to estimates power sector will required

2
1.37 investment of about US$ 10.1 trillion by 2070.
1
0
2024 2036
Power Demand % of GDP
CO2 Reduction potential
Challenges in Transition
Renewables single-handedly are not enough

as power generation from solar and wind is Storage systems are crucial because all our
climate dependent. power grids are setup for AC power, while
most of the renewables.
Gas power would be necessary to
complement coal and decrease the CO 2
impact during the transition period. Despite the above solutions, in the near
future, India have to rely on coal power
Gas power produces about 50% less emissions therefore emphasis on cleaner coal is very
than coal and can be used as base load power critical.
complementary to solar and wind.
Policy Considerations for Decarbonization
Energy Independence
• Currently India is heavily dependent on imports
Develop Markets
for power demands. • Policy initiatives like development of green
• Close to 40% of our power demands are met open access that incentivize sustainable
through imports. businesses and respond to the demands of a
complex energy system via market-based
prices are crucial.
Technological and Financial Innovation Investments

• Policies should not attempt to predict the future • The policymakers have to device ways to
technologies and sources of power. mobilize the required capital to key sectors in
• Policies should provide an environment the the most effective and transparent way.
appropriate incentives for innovations to happen
on larger scale.
Clean Energy Sources and Strategies
Wind Energy
o India is currently the 4th largest in

the world in terms of installed
wind energy capacity.
o Wind energy is important for

production of green hydrogen due
to higher capacity utilization factor
and greater generation period.
Gas
o 6.7% of India’s energy

consumption is met by natural
gas, which the Govt aims to
improve to 15% in 2030.
o Natural gas plants can switch on

– and go offline rapidly, adjust
power output levels, therefore
they offer tremendous flexibility
o Natural gas also produces 50%

lesser CO2 than coal.
Source: EY report June 2022: Decarbonization of India’s energy sector
o Hydrogen blended with natural
gas needs to be promoted via the
National Hydrogen Mission.
Green hydrogen
o Currently, hydrogen is carbon-intensive,

with a high carbon footprint for 96% of
hydrogen.
o Green hydrogen can be used as fuel in

aero-derivative gas turbines. This can
provide consistent green energy which is
very difficult to achieve with other
conventional storage based solutions.
o For green hydrogen to become viable

cost of production needs to be reduced
and polices need to incentivize the entire
Production ecosystem.
Cleaner Coal
o Coal will be part of India’s power ecosystem

for years to come.
o To aid decarbonization, carbon emissions

from power plants can be utilized for
hydrogen generation or biofuel generation.
o According to estimates from the International

Energy Agency, carbon capture and storage
(CCS) can remove 20% of total CO2
emissions from Industrial and energy
production facilities.

Energy Storage
o The Ministry of Power has given basic guidance on

energy storage systems. They can also be
standalone energy projects, making it a delicensed
activity.
o Globally the predominant technology of energy

storage is pumped storage hydropower (PSH)
contributing to more than 95% of the total installed
storage capacity.
o India has a potential of close to 120 GW of PSH

across 120 locations.
o 12 PSH projects (public and private) (with an

installed capacity of 10,000 MW) are under pre-
feasibility study, investigation and survey or
obtaining clearances.
Clean Energy distribution
Better power grids Open access
o Smart Grid (SG) helps with improving the o The Ministry of Power notified the Electricity
reliability of power networks and makes them (Promoting Renewable Energy Through
flexible to inputs from distributed renewable Green Energy Open Access) Rules, 2022
energy units. supported open access for green energy.
o To harness the benefits of the Smart Grid, the o The Green Energy Open Access Rules
Ministry of Power (MoP) has inaugrated the provide for a single window to be set up and
National Smart Grid Mission in 12 locations. operated by a Central Nodal Agency to
streamline the approval process.
o Micro-grids that are controllable at the local
level with flexibility distribution and o Ease of transmission and distribution of green
consumption for sectors like Electric Vehicles energy through open access can catalyze
need to be added to India’s power India’s clean energy transition.
ecosystem.

Enablers for decarbonization
Carbon Markets
o The explicit cost of carbon emissions can

be assessed through both a carbon
trading scheme and carbon tax.
o Economic fiscal measures like incentives

on production and use of goods and
services with a low carbon footprint help
businesses be competitive and minimize
costs.
o India does not have an implicit carbon tax

or a carbon price, though there are
measures such as a levy on coal, high
excise duties and VAT on petrol and
diesel, etc.
Green Finance
o In 2022, global green bond market is

expected to reach US$1 trillion. The
energy sector is the largest recipient of
green bonds.
o India has emerged as a significant issuer

in the global market for green bonds,
primarily focusing on financing projects in
the renewable energy sector.
o The Union Budget for 2022-23

announced the establishment of a new
framework for the issuance of sovereign
green bonds.
Conclusion
Maximizing renewable energy production,
including offshore wind, should rely on The Green Energy Open Access Rules
domestically manufactured equipment
supported by production-linked incentives, such
provide for a single window to be set up
as for rotor blades. Government policies must and operated by a Central Nodal Agency
focus on reducing embodied carbon in the to streamline the approval process.
equipment used.
By prioritizing renewable energy

India needs to transform the electricity grid development, enhancing gas
from a centralized, one-way system to a infrastructure, and implementing cleaner
decentralized smart grid that can facilitate coal technologies, India can pave the way
two-way electricity flow is essential. towards a sustainable and resilient energy
future.
Incentivizing decarbonization efforts

India’s decarbonization goals requires a
among large commercial and industrial
multifaceted approach that includes
energy users can be achieved through the
significant investments in infrastructure,
establishment of carbon markets and the
technology innovation, and supportive
effective implementation of green open
government policies.
access.
THANK YOU FOR YOUR TIME

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Decarbonization of India’s Energy Sector

Policy Roadmap to Achieve Clean Energy Targets

Under the guidance of: Dr. Ameet Sao

A collaborative effort of:

o India’s plan is to create a new clean

o Long term goal is to have Net Zero

o Short term goals for 2030:

o Currently the nation’s energy requirements are

o Renewables, Hydro & Nuclear energy account

o 35-40% of our energy requirements are

o India has high potential for solar, wind and tidal

Power Demand & Cost estimates

o According to estimates power sector will required

Renewables single-handedly are not enough

Technological and Financial Innovation Investments

o India is currently the 4th largest in

o Wind energy is important for

o 6.7% of India’s energy

o Natural gas plants can switch on

o Natural gas also produces 50%

o Currently, hydrogen is carbon-intensive,

o Green hydrogen can be used as fuel in

o For green hydrogen to become viable

o Coal will be part of India’s power ecosystem

o To aid decarbonization, carbon emissions

o According to estimates from the International

Source: EY report June 2022: Decarbonization of India’s energy sector

o The Ministry of Power has given basic guidance on

o Globally the predominant technology of energy

o India has a potential of close to 120 GW of PSH

o 12 PSH projects (public and private) (with an

Better power grids Open access

Source: EY report June 2022: Decarbonization of India’s energy sector

o The explicit cost of carbon emissions can

o Economic fiscal measures like incentives

o India does not have an implicit carbon tax

o In 2022, global green bond market is

o India has emerged as a significant issuer

o The Union Budget for 2022-23

By prioritizing renewable energy

Incentivizing decarbonization efforts

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