Context

• The urgency for countries worldwide to decarbonise has never been more pronounced.
• However, for nations such as India, the challenge lies in ensuring that the shift to cleaner energy sources does not hinder economic growth or development.
• As COP29 negotiations unfold amid complex global issues, India’s path to decarbonisation demands careful attention to equity, growth, and the role of people at the core of this transformation.

The Increasing Energy Demand and Need for Flexibility

• India’s Increasing Energy Demand
  • India, as one of the world’s fastest-growing economies, is experiencing a rapid surge in energy demand driven by industrial expansion, urbanisation, and a rising standard of living.
  • By 2032, peak power demand in the country is expected to reach nearly 370 gigawatts (GW), nearly double its current capacity.
  • This exponential growth in energy needs is a critical factor shaping India’s approach to sustainable energy.
  • The country's response requires not just scaling up energy capacity but also creating a flexible, adaptive energy system capable of meeting fluctuating demands while integrating renewable sources and reducing emissions.
• The Need for Flexibility
  • Renewable energy, while sustainable and eco-friendly, presents unique challenges in terms of reliability and predictability.
  • Unlike coal or natural gas, which can provide continuous power output, renewables such as solar and wind are intermittent; their production depends on weather and environmental conditions, which can be unpredictable.
  • India’s push to generate a substantial portion of its electricity from renewables thus necessitates a system with built-in flexibility—one that can absorb fluctuations in supply and balance them with demand.
  • This flexible infrastructure will allow India to achieve both energy security and sustainability, making renewables a viable backbone for its growing economy.

A Strategic Roadmap for India to Build a Robust Green Energy System and Achieve Flexibility

• Moving from Centralised to Decentralised Energy Systems
  • Decentralised energy systems offer a sustainable approach for large-scale renewable energy adoption.
  • Distributed Renewable Energy (DRE) solutions, such as rooftop solar, are crucial to this shift.
  • Despite India’s ambitious goal to solarize 10 million households, making rooftop solar economically viable for lower-income households remains a challenge.
  • According to a Council on Energy, Environment, and Water (CEEW) study, approximately 30% of India’s rooftop solar potential lies within the 0-1 kW capacity range, which remains costly even after subsidies.
  • Alternative market-driven interventions, such as community-based solar initiatives, can make rooftop solar accessible to a broader demographic, encouraging widespread adoption of clean energy.
• Transitioning from Capital Expenditure to Operational Expenditure Models
  • Traditionally, energy investments have focused on capital expenditure (capex), prioritizing infrastructure costs upfront.
  • However, for a sustainable energy transition, India must adopt an operational expenditure (opex) model.
  • This approach allows consumers to pay for energy services on a usage basis rather than incurring high initial costs.
  • For instance, rather than individual households purchasing solar panels, utility companies could set up community solar installations, charging consumers based on consumption.
  • This model can also be applied to energy-efficient systems, district cooling, and clean mobility, aligning costs with actual energy use and promoting efficient energy distribution.
• Prioritising Climate-Resilient Investments over Short-Term Financial Gains
  • Investing in climate-resilient infrastructure and clean energy systems is crucial for long-term stability, especially as climate change intensifies.
  • Currently, over 80% of India’s districts are considered climate-vulnerable, increasing the risk of economic and infrastructural shocks.
  • By focusing on resilience, India can mitigate future risks and reduce potential costs associated with climate-induced disasters.
  • Encouraging businesses and investors to consider climate risk assessments and climate-proofing strategies ensures that economic growth aligns with sustainable practices, safeguarding both the economy and the environment.

Some Other Required Shifts for India to Build an Economy Sustained by Clean Energy

• Focusing on Global Supply Chain Integration Rather than Protectionist Policies
  • To ensure energy security and position itself in the global clean energy landscape, India should pursue strategic integration into global supply chains rather than adopting protectionist industrial policies.
  • By collaborating with other countries, India can contribute to the solar photovoltaic (PV) and green hydrogen industries, leveraging its strengths in specific segments.
  • This shift also promotes an international rules-based system that prioritises cooperation and interdependence, a contrast to more unilateral or protectionist approaches seen in other economies.
• Merging Decarbonisation with Digitalisation
  • India’s dual revolutions in decarbonisation and digitalisation present a unique opportunity to create synergy between energy infrastructure and digital technology.
  • The widespread adoption of smart meters and the rise of rural internet users signal the beginning of a shift from hardware-centric to software-centric energy management.
  • Digital solutions, such as AI-based systems and smart appliances, can optimise energy flow, enabling real-time management and increased resilience.
  • This shift not only improves efficiency but also ensures that renewable energy sources can be seamlessly integrated into existing systems, making energy management more adaptive and consumer-focused.
• Moving from a Linear to a Circular Economy
  • A circular economy approach enhances India’s energy resilience by maximising resource efficiency and securing critical mineral resources.
  • With India’s solar energy capacity set to produce substantial waste by 2030, effective waste management and mineral recovery processes are essential.
  • The government’s vision to establish India as a circular economy hub for minerals and agricultural waste will help address environmental concerns.
  • It will also improve resource security, and support other sectors like water and agriculture, contributing to a holistic approach to sustainability.
• People-centric Energy Transition
  • A people-centric approach is indispensable in India’s energy transition and while significant funding flows toward large-scale renewable energy projects, consumer-focused financing is often lacking.
  • Support for end-use consumers, such as financing for electric vehicles, rooftop solar, and energy-efficient building materials, can drive demand and create consumer ownership of the green economy.
  • By creating portfolios of small-scale investments, India can leverage consumer demand to build a robust market for clean energy solutions that empower individuals and communities.

Conclusion

• India’s energy transition in the coming decade is not just about replacing fossil fuels with renewable sources; it requires a comprehensive rethinking of how energy, economics, and environment interact.
• By implementing these strategic shifts, India can develop a clean, resilient, and inclusive energy economy that balances growth with sustainability.
• Above all, placing people at the centre of this transition ensures that India’s energy future is not only sustainable but also equitable, empowering its citizens to actively participate in and benefit from this profound transformation.