A new assessment of India’s electricity transition shows that some States are moving faster than others in preparing their power systems for electric vehicles (EVs), green hydrogen, and higher renewable energy (RE) integration. The States’ Electricity Transition (SET) report, jointly released by the Institute for Energy Economics and Financial Analysis and Ember, evaluates 21 States accounting for 95% of India’s power demand. It highlights emerging leaders and exposes structural gaps in India’s subnational energy transition.
How the SET Report Measures State Readiness
The SET framework assesses States across dimensions such as renewable procurement, emissions intensity, distribution company (Discom) performance, and “Market Enablers” — policies that support EV adoption, green hydrogen development, green tariffs, energy storage, and open access reforms.
The “Market Enablers” dimension is particularly crucial as it signals whether States are preparing their power ecosystems for decarbonised end-use sectors such as transport and industry.
Among the 21 States analysed, Uttar Pradesh, Andhra Pradesh and Rajasthan emerged as the strongest performers in enabling frameworks for clean energy expansion.
Uttar Pradesh: EV Momentum and Green Hydrogen Push
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Uttar Pradesh has demonstrated notable momentum in EV deployment, reaching an adoption rate of 10% in FY25 across vehicle categories. Its Renewable Energy policy targets 22 GW of installed solar capacity by FY27.
Key measures include:
- Green tariff premium reduced to ₹0.34 per kWh for FY26.
- Solar-hour-aligned Time-of-Day (ToD) tariff introduction.
- Green hydrogen target of 1 million tonnes by 2028.
The ToD mechanism aligns lower tariffs with peak solar generation hours, incentivising consumption when renewable output is high. However, the State needs to accelerate deployment of storage capacity to ensure reliability amid growing renewable penetration.
Andhra Pradesh: Policy Integration and Storage Capacity
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Andhra Pradesh’s progress is driven by its integrated renewable energy policy (October 2024) and adoption of the Green Energy Open Access Rules, 2022.
Notable achievements include:
- Deployment of smart meters enabling ToD tariff implementation.
- Green tariff premium of ₹0.75 per kWh.
- EV adoption rate of 6.2% in FY25.
- 1,440 MW of pumped hydro storage operational or under construction.
Energy storage capacity — especially pumped hydro — strengthens grid flexibility and facilitates integration of variable renewable energy (VRE) such as solar and wind. The State’s diversified approach has attracted investments in green hydrogen production and renewable energy exports.
Rajasthan: Renewable Leader with Storage Gaps
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Rajasthan continues to lead in renewable energy deployment and policy clarity. It offers the lowest green tariff premium at ₹0.05 per kWh, enhancing affordability for green power consumers.
However, challenges persist:
- EV adoption stands at 6.6% in FY25 — moderate performance.
- Smart meter deployment lags, limiting effective ToD implementation.
- Only 25 MW of storage capacity is operational, creating vulnerability during peak demand.
Given its vast solar potential, scaling storage infrastructure is critical for Rajasthan to avoid curtailment losses and grid instability.
Other High Performers in Power Decarbonisation
Beyond market enablers, States such as Karnataka, Himachal Pradesh and Kerala have reduced emissions intensity by increasing renewable shares in procurement.
Meanwhile, Delhi and Haryana perform strongly in power ecosystem readiness due to robust distributed solar adoption, reliable supply, and relatively healthier Discom finances.
This indicates that India’s energy transition is geographically uneven but policy-responsive.
Why Market Enablers Matter for Net Zero
India’s decarbonisation goals hinge not just on adding renewable capacity but on restructuring electricity markets.
Key enablers include:
- Green tariffs to allow voluntary purchase of renewable power.
- Green open access for large consumers.
- Smart meters enabling dynamic pricing.
- Energy storage systems for grid balancing.
- Policy clarity for green hydrogen production.
Without these reforms, renewable capacity additions alone cannot drive systemic decarbonisation.
What to Note for Prelims?
- Green tariffs allow consumers to opt for renewable energy at a premium.
- Time-of-Day (ToD) tariffs vary electricity prices based on demand and generation patterns.
- Pumped hydro storage supports grid stability by storing surplus energy.
- Green Energy Open Access Rules, 2022 facilitate renewable procurement by consumers.
What to Note for Mains?
- Discuss the role of State-level policies in India’s electricity transition.
- Analyse the importance of energy storage in renewable integration.
- Examine how tariff reforms can accelerate EV and green hydrogen adoption.
- Evaluate disparities in subnational energy transition and policy readiness.