Low carbon and clean energy scenarios for India: analysis of targets approach

Abstract

Low carbon energy technologies are of increasing importance to India for reducing emissions and diversifying its energy supply mix. Using GCAM, an integrated assessment model, this paper analyzes a targets approach for pushing solar, wind, and nuclear technologies in the Indian electricity generation sector from 2005 to 2095. Targets for these technologies have been constructed on the basis of Indian government documents, policy announcements, and expert opinions. Different targets have been set for the reference scenario and the carbon price scenario. In the reference scenario, wind and nuclear technologies exceed respective targets in the long run without any subsidy push, while solar energy requires subsidy push throughout the century in order to meet its high targets. In the short run, nuclear energy also requires significant subsidy, including a much higher initial subsidy relative to solar power, which is a result of its higher targets. Under a carbon price scenario, the carbon price drives the penetration of these technologies. Still, subsidy is required — especially in the short run when the carbon price is low. We also found that pushing solar, wind, and nuclear technologies leads to a decrease in share of CCS under the carbon price scenario and biomass under both the reference and carbon price scenarios. This is because low carbon technologies compete among themselves and substitute each other, thereby enhancing the need for subsidy or carbon price, highlighting that proposed targets are not set at efficient levels. In light of contemporary debate on external costs of nuclear energy, we also assess the sensitivity of the results to nuclear technology cost. We find that higher cost significantly decreases the share of nuclear power under both the reference and carbon price scenarios.