Webinar on Just Transition in the Electricity Sector in India

With increasing demand for electricity in urban and rural areas, impending shortages in electricity supply due to unavailability of coal and increasing penetration of renewable energy in India, it is imperative to ensure a Just Transition for electricity consumers. It is important that the impact of the benefits and challenges are distributed ‘Justly’ between the rural and urban sectors and across consumers categories. 

As Tamil Nadu embarks on this journey of decarbonization and strengthening the electricity sector for its consumers, the ‘Citizen consumer and civic Action Group (CAG)’ in collaboration with MP Ensystems Advisory Pvt. Ltd organized a webinar to discuss the importance, relevance and challenges related to ‘Just Transition in the Electricity Sector in India.’ The webinar can be viewed here.

Key Discussion Points

Context of Just Transition in India and Tamil Nadu: Vishnu Rao, CAG

• Energy transition has been looked at from the renewable integration aspect, but we need to address social and economic aspects from the consumer perspective. 
• This discussion is a beginning stage to map out next steps that Tamil Nadu can take to enable a Just energy transition scenario in the future. We are looking at options including sustainable commercial utilities that provides affordable power for all as well as utility-scale solar plants. On the financial aspects of the Just transition, we need to understand whether it is feasible and commercially viable for a utility to accelerate a Just energy transition scenario in the state.
• We need to look at the role of marginalised people in Just transition to ensure equitable inclusion. 

Presentation on an overview of Just Transition: Meghana Rao Pahlajani, MP Ensystems

• Just transition related to a low carbon economy has three key focus areas:

• Climate Justice concerns sharing the benefits and burden of climate change from my human rights perspective
• Energy Justice refers to the application of human rights across the energy life cycle
• Environmental Justice aims to treat all citizens equally and to involve them in development, implementation and enforcement of environmental laws, regulations and policies

• Key drivers of an accelerated transition away from fossil fuels in India include:
  • Renewable and Storage getting cheaper
  • Emission Intensity commitment in NDC
  • Stranded assets and reluctance of finance institutions to fund new coal: 
  • Increasing, yet lower than expected demand
  • High cost of transport
  • Competing demand for limited land
• With a total installation capacity of around 34,000 MW, Tamil Nadu has one of the highest installations of Renewable Energy in the country. Tamil Nadu also has the highest borrowings of distribution utilities amongst states in 2019-20. Tamil Nadu is well poised to shift from a thermal base system to a renewable energy-based system. Projections from NREL model RE capacity reaching close to 34 GW in 2030 and the Tamil Government has announced high targets and relevant policies to support decarbonization in the State.  

Panel Discussion 1: Reflections on Just Transition in Energy and Global perspective

Dr Mahesh Patankar, MP Ensystems

• Developing countries have to focus on Just transition to account for adequate electricity supply to meet the growing demand whilst maximising livelihood opportunities in the rural sector. 
• With an ecosystem of renewables integrating to Tamil Nadu’s energy infrastructure, we need to look at how to balance this with the current strength of utilities. We need to make sure we have abundance of electricity available to vulnerable populations for not just their domestic needs but also industrial and agricultural requirements in urban and rural areas.
• During the Covid-19 pandemic, we saw a reverse migration from urban to rural areas, increasing demand from agriculture, rural industries, and small businesses. To enable equitable distribution of social and economic objectives for all, we need to provide adequate and reliable power supply throughout the country. 
• Several aspects of the energy system need to be carefully analysed. It is important to look at designing power markets effectively to ensure decarbonised electricity is available for all distribution companies. 

Dr. Zsuzsanna Pató, Regulatory Assistance Project 

• Some of the issues raised in Eastern Europe are relevant in the Just transition context for India. The conversation at the EU at a policy level has only covered issues of energy poverty. However, as energy prices increase, we need to focus on ensuring equity for poor consumers.
• In the case of net metering policies, PV consumers pay only for the net amount of energy produced. This creates a mismatch as poorer households, who usually cannot pay for PV installations, are paying the cost of upholding the distribution network. 
• In EU, the transition is driven at the national level. A stronger push on regulations and policies at a sub-national and local level will be required to ensure equitable energy transition. 

Akanksha Golcha, Shakti Sustainable Energy Foundation

• Transition pathways will vary depending upon geography. We need to consider social transition of not only direct coal-affected communities, but also indirect stakeholders located near coal mines. A data-centric approach and convergence between centralized and decentralised power supply approach is important to plan and streamline for a Just transition. 
• Central policies are necessary to drive the overall national objectives, but we also need a bottom-up approach that considers multiple aspects such as gender. 
• Saubhagya Scheme was successfully undertaken in rural areas. A similar approach is required for a Just transition to ensure economically poor households can benefit equitably. 

Panel Discussion 2: Just Energy transition in India

Dr. Kaveri Iychettira, School of Public Policy, Indian Institute of Technology Delhi

• Much of the literature on energy has focused mainly on economic thinking to structure the power sector and utility regulation but has not considered equity thinking. This has led to only states with a strong capital being able to integrate renewables, highlighting the equity challenge in the sector. 
• The regulatory framework is only directed at efficiency and not at equity which does not resolve cost-recovery issues. Therefore, we need to take a deeper look from the equity perspective to understand why there is a mismatch in states managing their power sector debt. 
• We need better integrate markets to enable grid flexibility where short-term markets are going to be important to integrate renewables. A higher RE-integrated power systems needs to have inter-state exchange of electricity supply to meet the targets set for decarbonization.  

Sreekumar N, Prayas Energy Group

• Electricity sector is now being looked at from diverse perspectives as we address challenges in the transport, agriculture, cooking, industry sectors that are transitioning towards electrification. 
• Institutional strengthening needs to be supported for key stakeholders including:
  • Regulatory commissions who play a role in taking a holistic sectoral perspective 
  • Distribution companies who need to balance the mismatch between losses and new market instruments in renewables.   
  • Load dispatch centres so they have access to adequate resources 
  • Transmission investment focused on addressing grid security challenges.
• Civil society organisations need to push for innovations that will direct a Just transition ensuring affordable, quality supply to all consumers.

Special Remarks: Role of regulators to facilitate Just Transition

Shri D. Radhakrishnan, Tripura Electricity Regulatory Commission

• The Indian power sector is striving towards leading the renewable energy markets, so the transition towards renewables needs to take place in a Just and systematic manner with innovations emphasised in various sectors such as transport, consumer awareness and rural market access. We also need to ensure safety in the power sector by tackling local-level issues such as electricity overloading before going on to the transition phase. In the rural areas, the focus needs to be on ensuring ease of access to clean cooking.
• Cities will transition towards electrification as Smart City Mission rolls out and transport means in the public (Metro) and private (e-vehicles) sectors expand.  It is expected that electricity consumption will rise from 18-19% to around 40% in next 10-12 years through the transport sector. 
• At Tripura Electricity Regulatory Commission, Consumer Education Forum has been formed to consider consumers’ rights, opportunities, and rules.