Informing institutional design for an efficient and equitable electricity sector transition in India

Project description

While aspirations for Indian decarbonisation rest on the expectation of continued declines in the cost of renewable generation, the primary driver of decision making in India’s electricity sector is the challenge in balancing the role of electricity supply in welfare distribution, with the need for institutional cost recovery. Past attempts to strike that balance have only entrenched a cycle of distribution utility debt, which now complicates the implementation of institutional mechanisms (e.g. integrated markets, incentivisation of flexible demand) that would be needed to support an electricity system dominated by renewables generation. Furthermore, it makes investment in new generation capacity a high-risk venture for all stakeholders.

Sustained decarbonisation will therefore require an electricity sector institutional design ( i.e. market mechanisms, rules, and policies) that can also address cost recovery challenges in a manner that is both cost-effective and equitable. The latter requirement is not accounted for either in the theoretical frameworks or the stylised models that underpin long-term electricity planning discourse.

This project will investigate the interaction between cost recovery issues and India’s electricity transition outcomes, to identify policy strategies that could address such challenges in an equitable, efficient manner. The student’s research questions might include some or all of the following:

• What are the existing bottlenecks arising from cost-recovery issues to achieving an efficient and equitable electricity transition in India?
• How do cost recovery challenges adversely impact planning and governance of electricity sector decarbonisation in India?
• What strategies could overcome those constraints, improving cost recovery performance while increasing the pace of renewables integration?

The research will employ a mix of quantitative simulation (ex: agent-based and/or optimisation models) and qualitative techniques (ex: interviews, surveys and/or stakeholder analysis). The research will build on theoretical frameworks rooted in economics, engineering, and institutional analysis, generating new empirical data and planning insights.

Outcomes

Findings from this project will help various stakeholders, policymakers, practitioners, and academics understand and elucidate the relationship between poverty (cost-recovery issues) and imperatives to decarbonize the electricity sector. Ensuing policy recommendations will help incorporate cost and equity-related features in electricity sector policy design at the national and state levels. Specific policy contributions could include: design of public finance mechanisms organized at the central level to enable inter-state electricity market integration, strategies for improved power procurement.

We also expect scientific contributions in the form of improved analytical frameworks and modelling approaches which incorporate equity (and cost-recovery) considerations into electricity transition planning. Such findings will be also relevant to many other developing country regions with similar contextual conditions.

Specific deliverables will include:

i) Presentation of intermediate and final research outputs in at least three academic conferences. Presentation of research outcomes at a workshop designed to engage with key policymakers, bureaucrats, and civil society members.

ii) At least 3 scientific articles in international journals of high repute in the field of energy policy in developing countries. This will contribute immensely to literature on electricity sector transitions in a developing country context. Each research publication will also be accompanied with policy briefs or opinion pieces in popular news outlets to garner wider outreach.

iii) The project will strengthen formative collaborations between the IIT-D School of Public Policy (KI, AM) and UQ’s energy systems modelling community (JL), extending that to incorporate the social sciences experience of UQ’s Energy & Poverty Research Group (VS). It will also support a growing connection with leading-edge US energy transition researchers, leveraging the existing alliances between IITD-Harvard University and UQ-Princeton University. We believe this will establish a community of researchers in India, Australia and elsewhere interested in electricity sector decarbonization in developing countries.

Essential capabilities

Quantitative modelling or simulation; familiarity with programming or coding (Example: energy systems models).

Desireable capabilities

Demonstrated interest in policy analysis; demonstrated interest in the Indian energy sector; familiarity with economic concepts.

Expected qualifications (Course/Degrees etc.)

Engineering degree (majoring in electrical or computer science).