A look at the ongoing ‘green’ electrification of the country’s energy systems reveals that the effort to fast-track its pace over the past decade or so has led to around 10 GW of renewable electricity being added annually. This needs to go up by a factor of five if we are to meet our own defined goals of 500 GW of RE by 2030. Additionally, alternative measures around liquid/gaseous fuels like hydrogen and bio-ethanol, and consumption technologies like electric vehicles (EV) would also need to be implemented/strengthened and calibrated to align with the global goal. For example, to maximise EV penetration, a powerful decarbonisation pathway, the government needs to formulate the optimal mix of credit-linked subsidies provided to consumers and production-linked subsidies to automobile manufacturers. Currently, most of the benefits are placed in the hands of the manufacturers.

An overarching approach to addressing the above challenges lies in: One, the creation of markets for price discovery; two, rationalising and streamlining subsidies in the interim; three, devising adequate payment security mechanisms and; four, strengthening the capacities of various institutions/entities/markets to cope with the preceding changes, among several other measures.

The first three of the above, and the totality of them, could lead to either an increase in retail prices hurting consumers and/or, indeed, denying access to swathes of consumers due to poorly designed incentives or missing market actors — drawing attention to the iniquitous impact of energy transitions on the poor.

It is well established that not all people in the country can harness the same opportunities or outcome impacts of such transformative actions due to inherent disadvantages. The question is — as we redefine the way we energise ourselves to grow our incomes and enhance our lifestyles, can we ensure that we do not exacerbate, but instead alleviate, energy and related inequities and injustices that are currently embedded in our system?

For example, the critical role that biomass is expected to play in the energy transition enjoins the decision-makers to keep a sharp focus on the redistribution of income and unanticipated costs and deprivation that could potentially be faced by the lower-income classes, both in rural and urban areas. Commercialisation of the biomass supply chain, unless undertaken in a people-sensitive manner, could result in the loss of land, a vital low-cost energy source, fodder, and security for the poor. It could also result in a conflict with food security goals, placing an upward price pressure on food items.

Yet another key energy transition area that could adversely impact the smaller businesses and masses— both in terms of direct cost increases and the cascading effects felt through general consumer prices – is the transportation sector.

The rapid electrification of vehicles is likely to make a large part of the automobile industry — currently providing livelihoods to about 35 million people directly or indirectly — redundant, for lack of requisite skills. For long-haul freight-related transition, the government would need to make strategic, forward-looking choices on replacement energy sources. India runs a real risk of tying itself into a high-cost incentive system riddled with capital subsidies, retail subsidies and stranded assets.

Apart from the direct fallout on energy prices of making renewable energy supply sectors attractive for industry, consumers are also expected to be actively engaged in the decarbonisation process — change lifestyles, invest in energy-efficient appliances and practices, and become ‘prosumers’ themselves as installation of decentralised renewables energy systems like rooftop solar panels gains momentum.

In fact, the government has recently announced it would be a part of its power sector reform recipe and plans to nudge electricity distribution utilities to make the installations mandatory and in a time-bound manner. This would call for a thriving service industry to be developed to handhold the ‘prosumers’ in this transition.

The ACPET report has, therefore, proposed an Energy Transition Authority that should be the recipient of reports from high-level panels on rationalising subsidies and on market development wherein they have the mandate to provide a clear lens on the impact on people. Armed with a deeper understanding from integrated analyses of these critical subjects, the Authority needs to redeploy the saved financial resources to design alternative ways to support deserving underprivileged populations and incentivise the MSME sector towards providing energy services to underprivileged consumers. A well-targeted, digitally enabled system of direct-benefit transfers aided by the massive financial inclusion efforts of the government could be one option to be considered.

Leena Srivastava is director and head, Ashoka Centre for a People-centric Energy Transition. The views expressed are personal