For states, climate change and energy transition are Centre's concern

The focus of a majority remains on distributing free and subsidised coal-based power

The Centre has released its long-term low-carbon strategy this week at COP27, the global annual meet of nations on climate change. The strategy details how India will take steps such as rapidly expanding renewable energy sources and exploring a greater role for nuclear power to reach net-zero emissions by 2070. It will need a strong buy-in by the state governments since they will be responsible for the ground-level action. To what extent is state political leadership alive to these responsibilities?

At the Paris meeting in 2016, Prime Minister Narendra Modi had announced India will install 500 Gw of renewable energy (RE) by 2030. It is a promise that will need the states to show commensurate levels of urgency, in this decade.

On a positive note, of the 15 large Indian states with significant manufacturing activity, half (eight) now have a minister in charge of a department of energy, which subsumes that of electricity supply. This has been a recent development for most of them, becoming a practice only in their current cabinets. The distinction of being the first Indian state to have an energy minister goes to Odisha, which created the department in 1990.

The problem, however, is that only four of the states have allotted energy as the primary responsibility of their respective ministers. These are Karnataka, Andhra Pradesh, Telangana and Gujarat. (Odisha is not one of those, despite being the forerunner) This means the cabinet ministers basically have energy as their portfolio, which combines the departments of power along with that of new and renewable energy. This has allowed for some interesting experiments.

A pilot project of installing smart meters for agricultural power connections in the Srikakulam district of Andhra Pradesh has shown impressive results. Energy Minister Peddireddy Ramachandra Reddy told reporters last month that the department was able to save 30 to 33 per cent of power, “which otherwise goes unaccounted or pilfered”. He agreed that the changes in the farm sector would not have been possible unless there was a political backing. This was also demonstrated by Gujarat two decades ago when it became the first state in India to split rural electricity supply between farms and rural households.

Punjab has subsequently gone the other way, where every key party has made free power to farmers an article of faith. Reddy said the state plans to install smart meters for all agricultural power connections by next year. If successful, it could break the narrative evident in many states that energy policies are about promising free or subsidised electricity to the domestic consumers, particularly farmers.

The AP initiative is not surprising because together with Gujarat, Karnataka and Telangana, the state is competing to position itself as the prime location to develop solar energy parks in India. So the attention the state has bestowed on this ministry seems a natural follow-through.

For the other four states where there is an energy minister, the allocation of business shows that portfolio is not their primary one. The minister for energy in Odisha also looks after industries, micro, small and medium enterprises, the main consumers of the product of the sector, a clear conflict of interest.

In Jharkhand and Chhattisgarh, it is the chief minister who retains the portfolio of energy. In fact, in most of the coal-producing states of eastern India, even where chief ministers have retained the energy portfolio, there are separate ministers in charge of mining and environment, showing that energy issues as an integrated policy have to run a long distance there.

Behind the three front runner states, Uttar Pradesh seems to be another one where the policy direction has become fairly clear. The energy minister combines his role with that of urban development. Yet this state has had one of the toughest lobby groups to counter, those of the electricity board employees. These employees have repeatedly gone on strike to back their demand for higher wages and continuation of other employment benefits.

The relative lack of interest in policy action in the energy space has also much to do with the lack of fiscal space for the states, argues Gaurav Bhatiani, director - energy and environment, RTI International India, a global think tank on the sector. “The states will need to create fiscal space and reform distribution to enable larger renewable energy into their grids.”

As of now, most states approach energy as an extension of the electricity sector, with its focus on providing free or subsidised power. Some, like West Bengal and Rajasthan, not only have separate ministers responsible for the power sector, in the order of precedence these are the senior ministers. Punjab and Assam follow the same model.

As the several iterations for reforms in the distribution end of the power sector reforms show, states see their primary responsibility as one of reaching electricity to their citizens. Making consequential changes to their energy matrix has been subservient to it. For instance, Andhra Pradesh annoyed the developers of renewable energy in 2019, rescinding most of their existing contracts with the state governments on the specious claim that those were high-cost. Matters reached a climax when the National Solar Energy Foundation of India, the lobby group of companies in the sector, urgently requested Union Power Minister R K Singh to intervene and avert the cancellation of bids by the state government. The crisis has not yet fully blown over.

Bhatiani notes the best way to make energy come into the centre stage of state-level policies is to expand its domain. It cannot be just about setting up RE units, he says. “Integrating energy into urban planning will pave the way for greening the economy, creating local jobs and supporting the just transition.”

WRI India notes that better energy access can lead to better socio-development outcomes such as better health, quality education and improved livelihood opportunities to alleviate poverty and promote development. What a political push can do is evident from the Srikakulam experiment shows. Otherwise, states despite announcement of targets to buy more renewable power have not matched those with implementations. From FY18 to FY20, the RPO targets were 17 per cent, 19 per cent and 21 per cent. Only five states over-achieved their targets — Gujarat, Karnataka, Rajasthan, Andhra Pradesh and Tamil Nadu (Lok Sabha reply).

Without such political commitment, as of now, many states are too willing to let the Centre take on the task of pushing the energy transition issues.

State of Play of 16 Large Indian States

• 8 have minister for energy
• 4 states have ministers with solely energy portfolio
• 4 states have ministers with energy plus other key portfolios (includes 3 chief ministers holding energy portfolio)
• 8 have more than separate ministers with RE, environment, power, mines, etc