This report “Budgeting for Net Zero: Government support needed to meet India’s clean energy goals” by IISD concludes that several technologies have already achieved or will soon achieve cost parity with conventional equivalents and are now dominating their respective markets (BESSs, solar PV, and e3Ws). Others, like e2Ws, e-buses and electric cars, and offshore wind, are projected to reach cost parity in the next decade or so, after which their adoption will primarily deliver upsides for India as energy savings, pollution reduction, and new jobs. However, the speed of the transition will be critically linked to the timing, sizing, and nature of government support. For technologies that have not yet reached cost parity, ongoing support is needed to help bridge the cost gap, secure macroeconomic benefits, and achieve government goals, particularly the fast-approaching ones for 2030.
Macroeconomic analysis indicates that government support for four of the five technologies we examined is highly worthwhile. In the 2050 time frame, BESSs, solar PV, offshore wind, and EVs deliver economic paybacks and boosts to GDP. Only GH2 did not show macroeconomic benefits because cost parity was reached outside the period of our study—beyond 2050. Financial support from the government is not the only kind that will be needed. Many other policy alternatives are available: for example, regulatory instruments, such as power market reforms, can enable BESSs to realize better value and reduce costs and fuel efficiency standards, such as Corporate Average Fuel Efficiency norms and zero-emissions vehicle mandates, can help EV supply. Thus, deployment or consumer discounts for GH2 users can help secure offtaker agreements. Governments can also intervene with regulations like emissions taxes or cap-and-trade systems to make emissions costlier, prompting companies to invest in cleaner technologies. Informational tools such as public awareness campaigns and educational programs that promote the benefits of clean energy technologies can also help alter consumer behaviour and encourage adoption. Making existing programs work better can also help achieve the targets.
Access the report here
