Solar energy as an early just transition opportunity for coal-bearing states in India

Abstract

Continued investment in coal embroils regions in coal lock-ins, creating dependence and vested interests around coal and thereby limiting the speed and potential to switch to cleaner energy. In India, four states contribute 70% of coal production, with regions surrounding mines also housing significant operating and under-construction coal power stations. On the other hand, states in the west and south of India dominate current and near-term renewable energy capacity growth, broadly following patterns of highest resource potentials. We show that following current policies, by the end of the decade, coal-bearing states will likely sink deeper into carbon lock-ins, while the rest of the country, especially western and southern states could become increasingly decarbonised. Even in decarbonisation scenarios, gains from job and value creation in the clean energy sector might primarily take place away from existing coal regions, raising equity concerns, and ultimately putting the political feasibility of such a scenario in question. We suggest that policies aiming at higher renewable installations (mostly solar due to better potentials) in coal-bearing states, although not a one-to-one panacea, could provide an early break from lock-ins and into a just transition. This may, however, require a dedicated program and imply a small mark-up in power system costs. They would, however, help for medium-term diversification and job creation in all regions which will be key for assuring political support for the transition.