Power sector in 2030

India’s power system is heavily reliant on coal with an estimated emission intensity of around 632 gCO₂/kWh in 2019, with coal providing almost three quarters of all electricity. Recent years have seen a drop in this intensity, which stood at over 800 gCO₂/kWh for most of the last two decades.^3,13,14

India’s current installed coal capacity is more than 200 GW, and according to recent projection of Central Electricity Authority this will increase to 266 GW by 2029-30.¹⁵ By contrast, Paris Agreement compatible pathways see coal phased out of power production in the mid-2030s driving the full decarbonisation of the power sector by around 2040.³⁰ This means that any plant built today would risk turning into a stranded asset quickly in a 1.5°C scenario. In its National Electricity Plan of 2018, India had initially planned to retire a total of 45 GW coal powered plants between 2017-20278, but this has been revised to retire only a total of 25 GW between 2017-2027.¹⁵

Renewable power is starting to take hold in India, and at the federal level, the government has a target of 175 GW total renewable power capacity by 2022 (100 GW solar PV, 60 GW wind, 10 GW bioenergy and 5 GW small scale hydropower). India further aims at reaching 450 GW by 2030 and is expected to achieve a generation share of 40-43% in 2030. While India has increased its renewables installed capacity to 151GW in December 2021 from 39 GW in 2015, coal based power generation is still increasing at an annual average rate of 6% since 2015.^7,16

However, for a Paris Agreement compatible pathway, India would need a share of renewable energy of 70-79% by 2030 and around 90-98% by 2040, equivalent to increasing from 1 EJ_final (0.3 PWh) in 2019, to 2 EJ_final in 2030, and 5-11 EJ_final in 2050. A share of non-fossil power generation of 70-80% in 2030 translates to around 80-90% share in non-fossil electric capacity.

To achieve these levels India could strengthen its renewables targets, replacing the current plan for coal power plant additions. Phasing out fossil fuel subsidies, combined with the fact that new solar PV is now significantly cheaper to build in India than new coal power, would provide additional economic signals.⁹

Towards a fully decarbonised power sector

In the analysed 1.5°C pathways, India’s power sector reaches full decarbonisation around 2040 through a phase out of coal and gas by around 2035. In 1.5°C pathways reaching high renewable shares later, the power sector starts contributing negative emissions from the 2020s reaching up to 12% (of electricity produced) by 2050. This will contribute in abating around 0.2 GtCO₂, to balance earlier emissions and/or in other sectors. Higher penetration of renewables would reduce the country reliance on carbon dioxide removal technologies and the related investment costs.

¹ Climate Action Tracker. India. September 2021 update. Climate Action Tracker. (2021).

² IRENA. Renewable Power Generation Costs in 2020. (2021).

³ Climate Transparency. Climate Transparency Report. (2020).

⁴ Climate Action Tracker. Data Portal. (2017).

⁵ IEA. India. IEA. (2020).

⁶ Observatory of Economic Complexity. India. Observatory of Economic Complexity (OEC). (2019).

⁷ Central Electricity Authority. All India Installed Capacity. (2021).

⁸ Central Electricity Authority. National Electricity Plan. (2018).

⁹ Climate Action Tracker. India. September 2020 update. Climate Action Tracker. (2020).

¹⁰ Kuramochi, T. et al. Ten key short-term sectoral benchmarks to limit warming to 1.5°C. Clim. Policy (2017).

¹¹ NITI Aayog. Ethanol Blending in India 2020-25 Roadmap for Report of the Expert Committee. (2021).

¹² Kukreti, I. Union Budget 2021-22: India to launch Hydrogen Energy Mission. (2021).

¹³ IEA. World Energy Balances 2019. https://www.iea.org/reports/world-energy-balances-overview (2021).

¹⁴ IEA. CO2 Emissions Statistics. (2019).

¹⁵ CEA. Report on Optimal Generation Capacity Mix for 2029-30. (2020).

¹⁶ Central Electricity Authority. Annual Generation Report. (2020).

¹⁷ Bureau of Energy Efficiency. ECBC Residential. (2020).

¹⁸ PIK. The PRIMAP-hist national historical emissions time series. (2021).

¹⁹ Dasgupta, S., Van Der Salm, F. & Roy, J. Designing PAT as a Climate Policy in India: Issues Learnt from EU-ETS. Nature, Econ. Soc. Underst. Linkages 315–328 (2016) doi:10.1007/978-81-322-2404-4_16.

²⁰ BEE. PAT scheme (Perform, Achieve and Trade scheme). (2018).

²¹ MoEFCC. India Third Biennial Update Report to The United Nations Framework Convention on Climate Change. (2021).

²² TERI. Green steel through hydrogen direct reduction. (2021).

²³ Bhaskar, A., Assadi, M. & Somehsaraei, H. N. Decarbonization of the iron and steel industry with direct reduction of iron ore with green hydrogen. Energies 13, 1–23 (2020).

²⁴ Ministry of Road Transport and Highways. Notification G.S.R. 749(E). (2018).

²⁵ Clean Energy Ministerial. EV30@30 campaign. Clean Energy Ministerial. (2019).

²⁶ Carpenter, S. India’s Plan To Turn 200 Million Vehicles Electric In Six Years. Forbes. (2019).

²⁷ Economic Times. Bubble alert: India’s electric two wheeler industry maybe headed towards a glut by 2026, Auto News, ET Auto.

²⁸ While global cost-effective pathways assessed by the IPCC Special Report 1.5°C provide useful guidance for an upper-limit of emissions trajectories for developed countries, they underestimate the feasible space for such countries to reach net zero earlier. The current generation of models tend to depend strongly on land-use sinks outside of currently developed countries and include fossil fuel use well beyond the time at which these could be phased out, compared to what is understood from bottom-up approaches. The scientific teams which provide these global pathways constantly improve the technologies represented in their models – and novel CDR technologies are now being included in new studies focused on deep mitigation scenarios meeting the Paris Agreement. A wide assessment database of these new scenarios is not yet available; thus, we rely on available scenarios which focus particularly on BECCS as a net-negative emission technology. Accordingly, we do not yet consider land-sector emissions (LULUCF) and other CDR approaches.

²⁹ The generation share was translated to approximate capacity shares based on an assumption of a similar split across technologies as the 175 GW target.

³⁰ Analysed pathways assume the development of negative emissions technologies – BECCS – thus the year of zero emissions provided might be reached earlier than when 100% of the power mix is based from renewables and represent a ‘net zero emissions’ year.

³¹ Analysed pathways assume the development of negative emissions technologies – BECCS – thus the year of zero emissions provided might be reached earlier than when 100% of the power mix is based from renewables and represent a ‘net zero emissions’ year.