Powering Through a Transition: The Political Economy of India’s Electricity Future

India’s electricity sector has been an Achilles’ heel for the emerging economy. Despite 25 years of techno-economic interventions, persistent sector inefficiencies not only continue to be a drain on the state exchequer, but also compromise the quality of this essential service for citizens and businesses. While grappling with the legacy challenges, the sector is undergoing a fundamental transition, in the ways which electricity is produced, supplied and consumed. The impetus comes from the global trend on decarbonisation of electricity as well as a strong domestic push for addressing chronic electricity challenges and pursue an electricity future that ensures uninterrupted supply for all, increasingly from non-fossil sources. Renewable energy technologies, the key driver of change, offer the promise of low-cost power with additional co-benefits like environmental gain and industrial competitiveness. But low cost, by itself, does not guarantee that this transition will happen in presence of substantial interests and institutions built around the existing conventional energy technologies. The transition will be shaped by the political and economic context under which the sector operates, along with the techno-economic options.

While the policy discourse is focused on techno-economic options to enable this transition, there is little attention to the underlying political economic context, lock-ins to conventional energy technologies, and the disruptive potential of new technologies. Our past research – Mapping Power: The Political Economy of Electricity in India’s States ­– suggests that electricity sector dynamics cannot be understood independent of broader political economy trends. To examine electricity politics, it is important to understand the extent to which reforms are informed by and address the political context. With this backdrop, we aim to promote more wide-spread engagement with the need for political analysis and understanding of the electricity sector as an important complement to techno-economic analysis, and thereby, contribute to an enabling policy and regulatory framework for transition to a clean, inclusive and viable electricity future.

Building on in-depth analysis and sustained partnership at the national and state level, this project aims to demonstrate the importance of a political economy focus in bringing about improvements in electricity sector outcomes and a clean energy transition, and provide concrete recommendations on reforms that take into account political context. In particular, it will:

  • Stimulate engagement with political opportunities and constraints as part of national electricity policy discussion.
  • Promote development of state-specific approaches to electricity transition – in Andhra Pradesh and Madhya Pradesh – that internalise the effects of political changes, important complement to techno-economic analysis.
  • Provide analysis and stimulate discussion toward solving the free power to farmer conundrum, drawing on multiple case studies in Andhra Pradesh, Chhattisgarh, Gujarat, Karnataka, Maharashtra, and West Bengal.

The project, spread over three years (August 2019 – July 2021), is supported by Children’s Investment Fund Foundations and has additional support from Oak Foundation’s core grant to the Initiative on Climate, Energy and Environment.