About
The 2024 Indian States’ Electricity Transition (SET) report finds that Gujarat and Karnataka have effectively integrated renewable energy into their power sectors, shown adequate preparedness to further the electricity transition and have robust market enablers to facilitate future growth of clean electricity. The two states’ consistent performance over several different parameters across two iterations of our report highlights their strength when it comes to electricity transition.
States such as Haryana, Andhra Pradesh, Punjab and Rajasthan exhibited considerable progress in certain aspects but the progress has not been consistent across all the dimensions.
At the same time, Jharkhand, Bihar, West Bengal and Uttar Pradesh move more slowly than others again this year, despite the changes to our assessment parameters. They need to prioritise comprehensive strategies and interventions to foster sustainable growth and transition in their power sectors.
We recommend the strengthening of state-level regulatory frameworks and prioritising state-level transition plans and trajectories for broad-based progress towards electricity transition at a subnational level.
Executive summary
India’s economic growth is fuelling a surge in electricity demand. Last year, with a 6.7% growth in gross domestic product (GDP), India’s electricity demand rose by a similar 7%. Demand is likely to grow at a similar pace of 6.5% from 2024 to 2026, according to the International Energy Agency.
Neshwin Rodrigues India Electricity Policy Analyst, Ember
Delhi’s power system is well-prepared for decarbonisation, while Odisha has robust market enablers to support decarbonisation in the power sector. However, their actual decarbonisation progress so far does not match their strengths in these aspects, highlighting the importance of performing well in both dimensions to effectively achieve decarbonisation goals.
Key Findings
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01
Karnataka and Gujarat were top performers again in 2024
Karnataka and Gujarat, the top performers in SET 2023, were again exhibiting strength in 2024’s assessment parameters. These states have effectively integrated renewable energy sources into their power sectors, making big strides in decarbonisation, and are adequately prepared to accelerate the transition with robust market enablers facilitating future growth.
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02
Odisha exhibits readiness of its market enablers for the electricity transition
Odisha exhibits preparedness to embrace electricity transition through the readiness of its market enablers. However, it struggles with the actual decarbonisation of its power systems.
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03
Kerala, Haryana, Andhra Pradesh, Punjab, Himachal Pradesh and Maharashtra showed some strong progress
Kerala, Haryana, Andhra Pradesh, Punjab, Himachal Pradesh and Maharashtra all showed strong progress in one or more of the three dimensions: Decarbonisation, Readiness and Performance of the Power Ecosystem and Market Enablers. But they were also significantly slower in one of the three dimensions.
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04
Jharkhand, Bihar, West Bengal and Uttar Pradesh were again relatively slower than others
Jharkhand, Bihar, West Bengal and Uttar Pradesh move slowly than others again in SET 2024, despite the changes to our assessment parameters. There is a need to prioritise comprehensive strategies and interventions to foster sustainable growth and transition in their power sectors.
Introduction
In the year since the Institute for Energy Economics and Financial Analysis (IEEFA) and Ember jointly released the first edition of the Indian States’ Electricity Transition (SET) report, the decarbonisation targets for the country have only become more ambitious.
While hosting the G20 Presidency for the first time, India championed a climate change-focused agenda, marked by getting the group of countries to agree to tripling global renewable energy capacity by 2030. India reiterated these commitments at COP28 in Dubai, where it also agreed to double energy efficiency by 2030.
Yet, as it strives to meet its developmental goals by powering economic growth, emissions are rising. Although India was the fastest-growing G20 economy, clocking a 6.7% growth rate of gross domestic product (GDP) in 2023, its carbon dioxide (CO2) emissions also grew at a rapid pace of 7% to reach 2.8 gigatonnes (Gt).
Electricity generation remains the country’s largest emitter by far, contributing to nearly half of India’s annual CO2 emissions, with 1.18Gt in 2023.
Transitioning to clean sources of generation can help meet both India’s developmental and climate goals. According to the International Energy Agency (IEA), 60% of India’s electricity emissions increase in 2023 was because of cyclical weather-related events such as harsh summers and weak monsoons. This year, too, a harsh summer is likely to push India’s peak power demand to a record high of 260 gigawatts (GW). But a harsh summer means more sunny days and an opportunity for increased use of solar power.
Utilising more solar power and, more broadly, clean electricity requires efforts both at the central and state levels. India’s federal structure puts electricity under the jurisdiction of both the centre and states, which have considerable authority over energy production, distribution and regulation. As a result, states’ involvement is essential for achieving the electricity transition.
To be sure, the central government has taken key policy decisions that can accelerate the electricity transition. Investments in key transmission projects to evacuate renewable energy, new regulations that aim to improve clean energy integration in the electricity grid, and reforms in the electricity markets aim to support India’s ambitious non-fossil fuel-based capacity addition targets as part of its National Determined Contributions to increase the share of non-fossil fuel-based electricity sources to half of the total installed capacity by 2030. Concurrently, the central government has implemented several energy efficiency initiatives aimed at various sectors, including appliances, buildings
and industries.
The progress of states in the electricity transition is far more uneven. Some states have developed progressive steps, such as boosting decentralised renewable energy deployment, promoting solar pumps for agricultural needs, and enhancing storage solutions to ensure more renewable energy in their electricity systems.
Haryana, for instance, plans to skyrocket its solar energy capacity by 22 times, installing 6,000 megawatts (MW) by 2030. States such as Uttar Pradesh, Rajasthan and Andhra Pradesh are the only ones with notified green hydrogen policies. Gujarat was set to unveil its green hydrogen policy last year, but it is still in the draft stages. Additionally, the Karnataka Energy Department has launched the state’s ambitious plan to transition millions of irrigation pumps to solar energy to save substantial amounts of money spent as a subsidy every year.
But, as this year’s SET report finds, several other states, such as Jharkhand, West Bengal, Bihar and Odisha, need to do much more.
Gauging India’s progress towards electricity transition requires constant monitoring of several parameters at state level. A purely national overview can often overshadow subtle intricacies at state level that may stymie the country’s electricity transition.
IEEFA and Ember launched the SET report last year to track states’ progress towards electricity transition, and help identify areas that need remedy. This year’s report builds on the previous edition with more states and even more refined dimensions and parameters to map state-level electricity transition nuances. The objective of the SET report remains unchanged, which is to provide the progress and performance of Indian states on various aspects of the clean electricity transition to help policymakers make more informed decisions.
Dimension 1
Decarbonisation
This dimension offers a holistic perspective on states’ decarbonisation efforts, covering pivotal elements such as transitioning to renewable electricity, maximising renewable energy potential and decoupling economic growth from emissions. It also focuses on integrating energy efficiency into state-level policies. Furthermore, it evaluates state governments’ investments in renewable energy projects, and tracks the annual additions of renewable energy capacity in recent years. Together, these parameters provide a comprehensive understanding of states’ progress towards a low-carbon power system.
In this chapter:
This year, the dimension incorporates changes to ensure a more comprehensive assessment of state efforts. One significant alteration is the consideration of the share of total consumption of renewable energy, regardless of the source state. This adjustment aims to capture states’ endeavours in purchasing renewable energy, even if they lack abundant solar and wind resources. Consequently, the parameter of the renewable energy mix in the power supply is now based on consumption, reflecting the share of total consumption generated from renewable sources.
Additionally, to account for states’ progress in adding renewable energy capacity, we evaluate their advancements between 2019 and February 2024. Moreover, this year the dimension includes the public expenditure on renewable energy by state governments, providing insight into states’ efforts towards decarbonisation. These new parameters, along with existing metrics such as the utilisation of renewable energy potential, power sector emission density and the SEEI, constitute a more robust assessment of states’ progress towards decarbonising the power sector.
Despite these changes, Karnataka maintains its position as the top performer in this dimension, showcasing consistent leadership in decarbonisation efforts. The relatively lower performance of states such as Jharkhand, Bihar and West Bengal remains unchanged in comparison with the previous assessment.
However, Rajasthan’s performance has declined significantly, primarily due to a substantial reduction in its score in the new SEEI, down 46.5 points, primarily attributed to the lack of reported data. Similarly, Tamil Nadu has experienced a significant decline in performance, largely due to changes in our assessment methodologies that now include state-level renewable energy consumption. Despite its notable capacity additions, only 16% of Tamil Nadu’s total consumption is from renewable energy sources, one of the lowest percentages in the country, excluding eastern states.
Conversely, Chhattisgarh’s performance has improved notably. This improvement is largely because of the addition of the parameter on state expenditure in renewable energy and an improvement in the SEEI. The inclusion of these factors has lifted Chhattisgarh’s overall score, reflecting its increased efforts and effectiveness in decarbonisation initiatives.
Dimension 2
Readiness and Performance of the Power Ecosystem
Alongside green electricity generation and consumption, the preparedness of the power ecosystem holds paramount importance in facilitating the energy transition of states. A well-prepared power system serves as a foundational pillar for transition, as it facilitates the integration of renewable energy sources and infrastructure. This readiness enhances grid efficiency, reliability and competitiveness, laying the groundwork for sustainable and resilient energy frameworks.
In this chapter:
Dimension 2 has undergone revisions to provide a more holistic view of states’ readiness for the electricity transition. One notable change involves merging Dimension 2 (Performance of Power System) and Dimension 3 (Readiness of the Power Ecosystem) from the SET 2023 report. This modification aims to strengthen the interlinkages between a strong distribution and transition infrastructure, and the efficient use of each electron.
Consequently, we widened the parameter assessing the states’ green market participation to capture their participation in short-term electricity markets, facilitating efficient power sharing and system flexibility. Another addition was to capture the penetration of distributed solar energy. This reflects states’ efforts towards diversifying the energy mix and ensuring energy access across diverse regions. We also removed parameters such as feeder segregation and smart metering due to the lack of data available.
As a result of the changes, the performance of Karnataka and Andhra Pradesh, which topped Dimension 2 and Dimension 3 last year, suffered a setback in 2024. On the other hand, Delhi, Haryana and Telangana outperformed from last year in strengthening their readiness.
Last year, Karnataka’s strong performance was due to its high electricity generation volumes, robust green market participation and successful attainment of renewable energy targets, highlighting its proactive approach to electricity transition. However, this year the relatively lower DISCOM performance, short-term market participation and the removal of parameters, such as feeder segregation and smart metering, affected its overall performance in the dimension.
Delhi’s performance improved this year due to its better DISCOM rating, short-term market participation and the uptake of decentralised solar energy.
Gujarat continued to be a strong performer this year, too, despite the changes in the parameters. Conversely, states such as Uttar Pradesh and Bihar were low performers across both years, with lower readiness levels in terms of short-term market participation, meeting renewable energy targets and DISCOM rating.
Dimension 3
Market Enablers
The Market Enablers dimension underscores a critical aspect in assessing energy transition by focusing on both supply-side initiatives to boost renewable energy capacity, and demand-side measures to facilitate increased renewable purchases. Parameters such as green tariff adoption, electric vehicle (EV) adoption rates, storage capacity at state level, state policy targets, regulatory frameworks and green open access rules are integral components within this dimension.
In this chapter:
This dimension underwent an exhaustive transformation from last year, including the name change to Market Enablers from Policies and Political Commitments. Through the changes, the dimension now evaluates market enablers and readiness indicators necessary for accelerating the electricity transition. This shift led to a complete change at the parameter level, with the addition of new parameters that capture necessary market enablers. It continues to track some policy developments through parameters such as the renewable energy policy landscape and the adoption of GOARs and codes/regulations for the distribution system.
Although a direct comparison cannot be drawn between the past two years, it is interesting to see how Odisha emerges as a frontrunner this year due to its low incremental green tariff rate and robust renewable energy policy framework. The state’s focus on fostering the EV ecosystem through policy incentives and infrastructure development further strengthens its position. Last year, it scored lowly in almost all parameters, including low per capita e-waste and battery recycling capacity, coal capacity in under-construction and pre-construction stages and lack of BESS projects in the pipeline.
The broad comparison also reveals distinct trends and challenges across states in their readiness for the energy transition. While last year focused on the policy landscape and political commitments towards sustainability, this year’s report puts emphasis on market enablers such as green tariff adoption and EV infrastructure. Gujarat and Karnataka showcase comprehensive strategies encompassing both reports, while others struggle to bridge these gaps and align market enablers with robust policy frameworks.
Conclusion
The report acknowledges the tremendous efforts undertaken by some of the states towards electricity transition. The figure below summarises where the states stand regarding their progress across different parameters and dimensions of this transition.
States encountering challenges in multiple dimensions must prioritise comprehensive strategies and interventions to foster sustainable growth and transition in the power sector.
For states grappling with challenges across all dimensions, implementing comprehensive strategies and significant interventions becomes paramount. By prioritising initiatives to enhance decarbonisation performance, improve power system readiness and fortify market enablers, states can pave the way for sustainable growth and transition within the power sector.
Jharkhand, Bihar, West Bengal and Uttar Pradesh have showcased slower progress in most of the parameters last year and this year. These states are early in their electricity transition journey, but low performance across several parameters over two iterations of this report suggests
structural challenges.
Recommendations
Based on our analysis, we make the following recommendations to accelerate the subnational electricity transition:
These integrated recommendations emphasise the importance of prioritising state-level studies, ensuring data availability and transparency, and addressing national-level oversights to facilitate a successful transition to renewable energy in India.
Supporting Material
Methodology
Overview
This report builds on the previous edition, where we tracked 16 states on 17 parameters grouped under four dimensions.
This year, the report tracks 21 states that collectively contributed to about 95% of India’s annual power demand in the past seven financial years (FY) 2018 to 2024 (up to November). The new states on the list are Kerala, Uttarakhand, Himachal Pradesh, Assam and Jharkhand.
This year’s report also uses a more refined methodology, which affects both the dimensions and their parameters. We made the changes based on the relevance to the status of states’ electricity transition progress, feedback from stakeholders and data availability.
New Dimensions
Based on stakeholder feedback, this year’s report merges last year’s Dimension 2 (Performance of the Power System) and Dimension 3 (Readiness of the Power Ecosystem). We also revised last year’s Dimension 4: Policies and Political Commitments to include market enablers capturing both supply-side and demand-side interventions.
As a result, the new dimensions for this year’s report are:
- Dimension 1: Decarbonisation – This dimension assesses how effectively states
are reducing carbon emissions in their electricity sector. - Dimension 2: Readiness and Performance of Power Ecosystem – This dimension evaluates the states’ preparedness to transform their power systems while ensuring reliable electricity supply.
- Dimension 3: Market Enablers – This dimension assesses the presence of conducive market conditions and policy mechanisms that facilitate the growth of renewable energy.
Refer to Annexure 1 for more details on the changes between the dimensions from last year and this year. Annexure 2 elucidates the rationale behind each dimension’s role in the electricity transition.
New Parameters
Extensive discussions with sectoral experts from organisations, including the Energy and Resources Institute (TERI), Grid-India, EY-Parthenon and others, helped us refine the parameters for each of the three dimensions.
The changes were based on relevance to the three dimensions, feedback from experts after the launch of last year’s report, and the availability of data from reliable sources.
In addition to modifying old parameters and adding new ones, we also revised the mode of measurement for a few parameters. Annexure 1 provides details of the changes.
Refer to the 2023 report for details on the selection of weightages, the scale used for scoring, and data collection methods, which remain the same.
We relied on qualitative data alongside quantitative data for the third dimension, Market Enablers. To ensure uniformity in analysis, the report relied on data for FY2023 wherever possible. In cases where data for FY2023 was unavailable, we used the latest available data for all the parameters. Sectoral experts vetted the data used in this report.
Similar to last year, there were challenges obtaining data for a few states in certain parameters. Refer to Annexure 2 for a full list of data-related challenges and assumptions.
Table 1 provides details on the parameters, the metrics used for different parameters, the type of indicator, weightages and data sources for SET 2024.
Acknowledgements
Aditya Lolla, Asia Policy Director, Ember
Vibhuti Garg, Energy economist and South Asia Director, IEEFA.
The authors would like to acknowledge and thank Mr S.C. Saxena (Grid- India), Mr Abhishek Ranjan (EY-Parthenon), Dr Somit Dasgupta (personal capacity), and Ms Vrinda Gupta (personal capacity) for the constructive feedback provided during the peer review and data analysis process. Although any errors are our own and should not tarnish the reputations of these esteemed persons.
We would also like to thank Mr Ranjan, Mr Saxena, Dr Dasgupta, Mr A.K Saxena (TERI), Ms Gupta, Mr Rahul Patidar (personal capacity), Mr Shiv Vembadi (personal capacity) and Mr Nikhil Tyagi (personal capacity) for their contributions in finalising the report methodology, weightages and data analysis process, as well as Ashish Rawat for his support in data collection and analysis.
Finally, we would like to thank Chelsea Bruce-Lockhart, Uni Lee, Cara King, Shane Brady and Debabrata Das for their support in the production of this report.
