Though the scores on economic development and growth dimension have improved, supported by subsidy reforms over the past decade for cost-reflective pricing of fuels. This has also helped in improving cost competitiveness of renewable energy sources, the LCOE (levelized cost of energy) for solar PV and onshore wind remains among the lowest in the world.
While scores on the environmental sustainability dimension have improved, supported by ramping up renewable energy investment and capacity installation, and improving energy efficiency of appliances and transport, they remain low on absolute scale. Given the scale of the challenge, and the rising demand for energy to support industrialisation and urbanisation, the trade-off remains complex. India remains among two of the world’s 10 largest economies without a net zero goal.
Finally, the pandemic is exacerbating the weaknesses in India’s electricity system, thus causing tensions in the transition. Both fossil and RE systems will need stimulus to sustain the impacts. It is not a question of which technology to support, but a choice between different configurations of technology, politics and institutions.
The energy transition, however, is not only limited to the gradual closure of coal-fired power stations and the development of clean energies: it is a paradigm shift that concerns the entire system. A huge contribution to decarbonization comes from electrification, which also makes other sectors such as transport cleaner, and from the digitalization of electricity grids, which improves energy efficiency.