Policy Wise: India’s Power Sector

India needs a coordinated approach for decarbonisation of economy


From UPSC perspective, the following things are important :

Prelims level : Emission intensity

Mains level : Paper 3- Decarbonising the Indian economy


The announcement of enhanced targets for climate action by India, particularly for achieving net-zero emissions by 2070, has highlighted the importance of long-term planning for decarbonising the economy.

Why do we need a decarbonizing strategy

  • The Government of India has responded to rapid reductions in the cost of renewable energy (RE) based power, with dramatic enhancements in the targets for RE.
  • With this approach, India has done well and is on a path to fulfilling its Paris Agreement commitments for 2030.
  • However, the road ahead will be challenging, and therefore, a coordinated strategy for decarbonising the economy efficiently and effectively will be required.

Strategy for decarbonising the economy

  • Factoring in the changes: By 2070, there will be many changes in technology, environmental conditions, and the economy.
  • The planning horizon of about 50 years will need to be broken up into shorter periods so that new knowledge about emerging technologies can be incorporated into plans.
  • Monitoring of the progress: Plans will need to be monitored so that the course can be corrected to respond to any unforeseen problems.
  • Five years, as the UK has used, seems like a reasonable “Goldilocks ideal.”
  • An autonomous and technically credible agency, like the Climate Change Committee (CCC) in the UK, should be set up.

Decarbonising the power sector

  • Biggest source of GHG: The power sector is the biggest source of GHG emissions and also the easiest one to decarbonise.
  • Reducing emission intensity is a good overarching objective; increased use of RE or non-fossil-fuel generation is a means to that end.
  • The four 2030 targets: Non-fossil fuel generating capacity to be 500 GW, RE capacity to be 50 per cent of all generation capacity, reduction in emission intensity by 45 per cent, and avoidance of GHG emissions by 1 billion tonnes — are inter-related.

Suggestions to decarbonise the power sector

  • Set emission intensity targets: Setting permissible emission intensity in terms of grammes of carbon dioxide equivalent per kWh of electricity sold, would be a good option for targets in the power sector.
  • Single emission-related objective: In order to decarbonise the power sector, it would be best to have a single emissions-related objective so that an optimal strategy can be developed to achieve the objective at the lowest cost.
  • Avoid separate targets: Currently there is a profusion of separate targets for almost every resource used to generate electricity.
  • For example, there are separate renewable purchase obligations (RPOs) for solar, non-solar RE, and hydropower.
  • Such an approach reduces the flexibility of distribution companies to select resources to meet their loads, resulting in a non-optimal resource mix, and a higher cost of electricity.
  • Reconsider RPO: RPOs are usually imposed to support nascent technologies, and because RE is now competitive on costs with conventional generation, the need for RPOs should be reconsidered.
  • The use of emission intensity targets is a better approach.

Consider the question “Why power sector holds the key to decarbonising the Indian economy? Suggest the strategy India should follow to decarbonise the power sector.”


The use of five-year interim targets for permissible emission intensity and the establishment of an autonomous and credible agency to advise the government on targets and policies and to monitor progress will greatly facilitate an effective, economic, and smooth transition to decarbonisation of the power sector first, and the Indian economy later by 2070.

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