Karnataka top performer in decarbonisation: IEEFA

Karnataka has been top performer to decarbonise their electricity systems with a higher renewable energy share in their procurement mix and lower power sector emissions intensity, according to the new report of Institute for Energy Economics and Financial Analysis (IEEFA) and Ember.

Besides Karnataka, the states of Himachal Pradesh and Kerala will gain more ground in their transition journey by addressing the gaps in their grid readiness, health of distribution companies (DISCOMs), and market-enabling conditions.

Delhi and Haryana remain ahead in terms of power ecosystem readiness and performance, supported by robust distributed solar adoption, reliable power supply, and relatively sound DISCOM performance.

Chhattisgarh is also a notable performer, recording a minimal power shortage of 0.07 per cent in FY2025, supported by moderate DISCOM performance.’The third edition of IEEFA and Ember’s Indian States’ Electricity Transition (SET) report, based on a three-dimensional framework, highlights that while some states are continuing to advance steadily in the fiscal year (FY) 2025, others have built momentum and a strong foundation for rapid progress. The uneven progress is owing to differences in resources, development priorities and institutional capacities.

“All the 21 states assessed have advanced on multiple fronts, even as the pace and areas of focus vary. Such divergence is inevitable at the sub-national level given the structural and historical factors, including differences in resource endowment, development legacies, states’ fiscal and economic conditions, rural-urban composition, and institutional capacity within the power sector. Going forward, understanding these state-level differences and gaps in progress is essential for designing targeted policies and interventions,” says Vibhuti Garg, Director, South Asia, IEEFA, and a co-author of the report.

“India’s electricity transition is maturing into a multi-speed transition, where instead of a single leader across all areas, we are witnessing new leaders in specific areas. This requires a more targeted approach to policies and interventions to ensure the momentum is evenly spread,” added co-author Ruchita Shah, Energy Analyst, Ember.

Despite a change in methodology for SET 2026, including a recalibrated mode of measurement for the capacity addition parameter and the inclusion of hydro capacity, Karnataka remained a top performer in the decarbonisation dimension of the report.

Himachal Pradesh and Kerala, too, did well in this dimension that tracks states’ progress in expanding renewable electricity and decoupling economic growth from emissions. Tamil Nadu, Maharashtra, and Rajasthan improved their performance in this dimension owing to their energy efficiency interventions, reflected in their State Energy Efficiency Index (SEEI) 2024 scores.

“For states with potential to improve on this dimension, targeted reforms could unlock faster progress. Strengthening DISCOM finances, ensuring timely subsidies, adopting cost- reflective tariffs, and enhancing billing and collection through digitisation and smart metering will help reduce risk perception and enable DISCOMs to scale renewable energy procurement effectively,” says co-author Saloni Sachdeva Michael, Clean Energy Specialist, IEEFA.