2. Indian Energy Transition: Need for a More Balanced and Market-Oriented Approach

As the intensity of discussion on energy transition across the globe has increased recently, we will most likely see a rapid transition away from thermal generation play out in India for the first time in this decade. In the past few years, the policy regime has been very deep in variable renewable technologies that certainly were successful in amassing 77 GW of solar and wind in a short space of time. However, they also manifested several unwarranted impacts, including financial stress on the thermal sector and distribution companies/customers, even without possibly the policy target being fully met by 2022. More importantly, the recently announced policy package has a far deeper 450 GW renewable energy target by 2030. This strategy may call for at least half a trillion dollars in new investment, mostly in solar and wind projects that will dry up investment in other forms of generation and distribution system upgrades. It will also almost inevitably deepen the crisis in the thermal sector and may potentially drive several state distribution companies to bankruptcy. It is important to objectively assess these issues and explore an alternative market-driven path to induce renewables on their merit and let coal and other thermal projects also exit.