NITI Aayog’s Roadmap and the Case for Coordinated Energy Transition Reform
Turning modelling projections into economic security requires credible contingency planning, industrial policy alignment, and disciplined capital mobilisation
A background note can be accessed here: NITI Aayog’s Roadmap for Viksit Bharat and Net Zero
Narendra Kumar Mishra: Senior Researcher, Energy & Heavy Manufacturing
SDG7: Affordable and Clean Energy | SDG 8: Decent Work and Economic Growth | SDG 13: Climate Action
Ministry of Power | Ministry of New and Renewable Energy | Ministry of Environment, Forest and Climate Change | NITI Aayog
Modelling assumptions, especially around technology costs and grid readiness, may diverge in practice. How should policy prioritise contingency pathways then to preserve economic and energy security?
The roadmap is directional rather than binding, and its implementation depends on states with differing fiscal capacities, political incentives, and grid preparedness. This federal dimension, including financially stressed distribution companies and existing surplus solar in some regions due to tariff distortions and transmission bottlenecks, introduces execution risks that modelling frameworks only partially capture.
The scale of transition amplifies this risk. Electricity demand is projected to expand from 1,541 TWh to 13,000 TWh by 2070 – an eight-fold increase requiring simultaneous expansion of generation, storage, and transmission. If key assumptions – such as scaling clean energy investment from USD 70–80 billion today to roughly USD 500 billion annually – fall short, fallback pathways must be pre-structured in advance.
Two priorities emerge. First, grid modernisation should be sequenced as a foundational investment, with ring-fenced state-level financing and measurable accountability rather than aspirational targets. Second, institutionalised technology-readiness reviews, especially for green hydrogen and long-duration storage, should be embedded within five-year policy cycles. Hydrogen’s dual role in managing intermittency and decarbonising hard-to-abate sectors makes it the most strategic contingency technology to monitor closely.
What trade-offs should policymakers weigh between deep decarbonisation of hard-to-abate sectors such as steel and fertilizers and near-term emissions reductions in power and transport, considering India’s development objectives and energy access needs?
Power and transport offer faster, measurable emissions gains. The projected reduction in grid carbon intensity from 0.72 kgCO₂/kWh to 0.07 kgCO₂/kWh by 2050 strengthens energy security, reduces urban air pollution, and creates a cleaner input base for industrial electrification. Policy traction in renewables and electric mobility has already demonstrated implementation capacity and public-health co-benefits.
Yet postponing action in steel and fertilisers would generate structural risks. Steel output is expected to rise from 127 million tonnes to 821 million tonnes by 2070, with significant process emissions that electrification alone cannot eliminate. The Union Budget 2026 announcement on Carbon Capture, Utilization, and Storage (CCUS) reflects early recognition of this constraint. Trade competitiveness adds urgency: mechanisms such as the EU’s Carbon Border Adjustment Mechanism (CBAM) will impose tangible costs on carbon-intensive exports.
Green hydrogen-based Direct Reduced Iron (DRI) and scale efficiencies in hydrogen infrastructure provide a credible long-term decarbonisation pathway. However, industrial policy signals – production-linked incentives, green public procurement, and viable CCUS financing frameworks – must be instituted now. Early alignment ensures industrial growth, employment, and export competitiveness evolve alongside decarbonisation rather than at odds with it.
What governance mechanisms and accountability frameworks are necessary to ensure that investment signals, carbon budgets, and cross-agency mandates cohere with measurable progress on net-zero targets rather than static modelling outputs?
The investment arithmetic underscores the governance imperative. Of the USD 22.7 trillion required cumulatively by 2070, a financing gap of USD 6.53 trillion remains, with 82 percent concentrated in the power sector. Bridging this shortfall requires institutional coherence across fiscal policy, sectoral planning, and centre–state coordination.
A first priority is managing the energy subsidy transition. Fossil-fuel support must be re-sequenced toward clean infrastructure in a politically calibrated manner, linking expenditure reform with long-term capital formation. Sector-specific allocation frameworks, reinforced by performance-linked fiscal transfers to states, would better align incentives than aggregate national targets. Given that states control land acquisition, urban planning, and electricity distribution, coordination mechanisms must be operational rather than consultative.
Accountability should shift from static modelling outputs to dynamic performance tracking. Sector-wise carbon budgets, annual reporting benchmarks, and independent third-party evaluations can anchor credibility. Where private capital is most efficient – renewables, EV infrastructure, green industrial clusters – bankable revenue models must be deliberately structured. With global investors expected to finance 42 percent of the transition by 2070, transparent governance and fiscal discipline become foundational to capital mobilisation.
Authors:
Views are personal.