India’s Net Zero Imperative: Electrifying the Economy

Syllabus: GS3/Economy; Environment

Context

• India needs to undergo a transformative shift — one that hinges on the widespread electrification of its economy, to meet its ambitious Net Zero target by 2070.

Why Electrification Matters?

• Electrification refers to replacing fossil fuel-based systems with electric alternatives powered by clean energy. This transition is essential for several reasons:
  • Energy Efficiency: Electric systems are inherently more efficient than combustion-based ones. For example, electric vehicles (EVs) convert over 77% of electrical energy into motion, compared to just 12–30% for internal combustion engines.
  • Emission Reduction: According to a joint report by the Indo-German Energy Forum and the Bureau of Energy Efficiency (BEE), electrifying 90% of India’s energy needs could slash emissions by 55%.
  • Renewable Integration: Electricity can be generated from renewable sources like solar, wind, and hydro, making it a cleaner alternative to fossil fuels.
  • Air Quality, Energy Efficiency, and Climate Gains: The International Energy Agency (IEA) projects that global energy consumption could fall by 15% by 2035, even with growing GDP, largely due to electrification.
    • Lower energy consumption directly reduces carbon emissions, and switching from fossil fuels to clean electricity improves air quality.

Phases of India’s Electrification Journey

• Phase I (2020–2030): Focus on deploying high Technology Readiness Level (TRL 7–9) solutions:
  • Round-the-clock renewable power;
  • Electric heavy vehicles, small boats, and air cargo delivery;
  • Electric melting furnaces
  • Simultaneously, India needs to invest early in emerging technologies such as electric kilns for cement; green hydrogen for shipping and industry; and electrolytic reduction of mineral ores.
• Phase II (2030–2050): As clean technologies mature, full electrification becomes feasible for railways; fertiliser production; and textile industries.
  • It supports emerging investments in small modular nuclear reactors; electric blast burners; and clean-energy-powered direct air capture.
• Phase III (2050–2070): By this period, India deploys a scalable and cost-competitive domestic technology base:
  • 3,500 GWh of battery storage;
  • 55 million tonnes of green hydrogen annually;
  • Sectoral transformation aims to accelerate in shipping, steel, aluminium, glass, and cement. Roughly 75% of all mobility, including tractors and possibly aviation, could be electrified.
  • Breakthrough technologies — fusion, space-based energy, advanced geothermal, and next-generation air capture — begin reaching critical mass.

Sector-Wise Transformation

• Power Generation: Transitioning from coal to renewables is foundational. India has already made strides, with solar and wind capacity growing rapidly.
• Industry: Electrifying industrial processes — especially in steel, cement, and chemicals — can drastically cut emissions.
  • Technologies like electric arc furnaces and green hydrogen are key enablers.
• Transport & Mobility: EV adoption is accelerating, but infrastructure like charging stations and battery supply chains need to scale up.
  • India needs to prioritise rapid renewable energy expansion; removal of transmission and grid bottlenecks; investment in storage systems; expansion of EV affordability and access; development of hydrogen fuels and smart grids; and buy-back and performance guarantee frameworks;
• Buildings: Electrifying heating, cooling, and cooking through efficient appliances and smart grids can reduce urban emissions.
• Agriculture: Solar-powered irrigation and electric tractors can reduce diesel dependence in rural areas.

Key Concerns and Challenges

• Grid Infrastructure Limitations: The current electricity grid is not equipped to handle the surge in demand from widespread electrification.
• High Upfront Costs: Transitioning to electric systems—especially in transport and industry—requires significant capital investment.
  • Electric vehicles, green hydrogen, and electric furnaces all come with steep initial costs.
• Policy and Regulatory Gaps: Fragmented policies across states and sectors hinder progress.
• Dependence on Fossil Fuels for Revenue: Fossil fuels contribute heavily to government revenues through taxes.
  • Electrification, especially in transport, could reduce this income, creating fiscal tensions.
• Technological Readiness and Adoption: Many industries still rely on legacy systems. Electrification demands new technologies and retraining of the workforce and redesigning supply chains.
• Green Hydrogen Trade Barriers: International trade restrictions on green hydrogen could slow India’s decarbonization efforts and hurt its competitiveness.
• Agricultural Sector Complexity: Electrifying agriculture is particularly challenging due to its decentralized nature and reliance on diesel-based equipment.

Way Forward

• Building Domestic Capability and Resilient Supply Chain: Electrification isn’t only about deploying devices — it requires manufacturing them in India.
  • It includes building secure supply chains for copper, nickel, cobalt, and rare earth metals.
  • These minerals often have long payback periods, necessitating strategic government-led global mining partnerships.
• Policy and Financial Architecture for the Transition: India’s energy transition will require a balanced mix of incentives, disincentives, and strategic public investment. Key interventions are:
  • Sustained policy support for renewable energy growth;
  • Incentives for users shifting to electrified technologies (e.g., EV subsidies);
  • Introduction of carbon pricing at meaningful rates;
  • Use of carbon revenue to fund decarbonisation programs;
  • Government as an entrepreneurial investor:
    • Strengthening early-stage technologies through the national R&D-Innovation Fund;
    • Crowd-in private capital while securing equity returns and geopolitical advantage;

Source: BL