Energy Transition Strategy and New NDCs under the Paris Agreement
India is preparing to submit new Nationally Determined Contributions (NDCs) as part of its commitments under the Paris Agreement, targeting the period up to 2035. These NDCs should ideally be part of a comprehensive economy-wide transition plan. The following seven key elements have been identified for India's energy transition strategy:
1. Emissions Intensity Reduction
- Set a target to reduce emissions intensity of GDP by 65% by 2035, compared to 2005 levels.
- Projected GDP growth is 7.6%, with total emissions expected to peak around 2035.
- Announcing a peak emissions date enhances India's decarbonization credibility.
2. Power Generation Capacity
- Increase non-fossil-fuel-based power generation to 80% by 2035.
- Target a total generation capacity of 1,600 GW by 2035, with 1,200 GW from solar and wind.
- Expand energy storage capacity to approximately 170 GW from less than 1 GW today.
3. Phasing Down Coal
- Set explicit targets for reducing unabated coal-based generation.
- Peak coal capacity at 293 GW around 2030, declining to 230 GW by 2040.
- Coal capacity may be retained till 2070, subject to carbon capture and storage affordability.
- Prepare coal-producing states for economic transitions and workforce retraining.
4. Electrification of Major Sectors
- Aim for near-100% electric traction in railways by 2035.
- Target 50% electric buses in city fleets, with a push for 100% electric three-wheelers.
- Set electric vehicle sales targets in collaboration with auto manufacturers.
5. Carbon Credit Trading Scheme (CCTS)
- Operational from April 2026, to be included in NDCs.
- Plans to review and expand the scheme after two years of operation.
- Gradually tighten emission intensity targets for obligated units.
6. Electricity Pricing and Grid Management
- Address variability in renewable energy generation with pricing reforms.
- Introduce exchange-based electricity trading and time-of-day tariffs.
- Educate the public for acceptance of new pricing structures.
7. Investment and Financing
- Require $62 billion annually for renewable generation and grid expansion (0.84% of GDP).
- 80% of investments from domestic sources; 20% from international sources.
- Encourage foreign investment with risk mitigation support from multilateral development banks.
Implementing the above strategy requires coordinated efforts from the government, states, and the private sector. The revival of the Prime Minister's Council on Climate Change is suggested to oversee and guide these initiatives. Some elements of this strategy may be included in India's new NDCs, signifying its commitment to decarbonization, contingent on financial resolution.
