





































Ecology, Economy and Society–the INSEE Journal 5 (2): 15-19, July 2022 

COMMENTARY 

Role of Energy Efficiency and Demand-side 

Management in India’s Clean Energy Transition 

Seema Paul, Amit Khare, Aditya Chunekar 

Abstract: India aims to achieve 500 GW of non–fossil fuel capacity by 2030, a 
substantial share of which would be contributed by variable and intermittent solar 
and wind. Further, India’s electricity demand is expected to increase with 
urbanization, income, and temperature. Energy efficiency and demand-side 
management programmes can play a critical role in India’s clean energy transition 
by reducing the demand for electricity and shifting it to times when solar and wind 
power can be most efficiently generated. Balancing the supply-side push for 
renewables with energy efficiency and demand-side management would be more 
cost-effective, less resource-intensive, and pose fewer social and environmental 
challenges compared to a renewables-only approach. This commentary highlights 
the importance of such an approach to India’s clean energy transition. 

Keywords: Clean Energy Transition, Energy Efficiency, Demand-side 
Management, Renewables. 

 

1. CONTEXT 

As Delhi temperatures hovered at 44 degrees Celsius in April this year, 
much sooner in the year than the typically warm/hot summer months of 
May and June, millions of Indians struggled with their daily lives. The peak 
power demand surged to a record high of 207 GW, and electricity 
distribution companies (DISCOMs) scrambled to supply electricity to their 
customers (The Indian Express 2022). Rajasthan, a renewable energy–rich 
state, announced scheduled power cuts of one to three hours for general 
consumers and provided only 50% of the required load capacity to 

 
 Programme Director, Sequoia Climate Foundation, spaul@sequoiaclimate.org. 
 Programme Manager, Sequoia Climate Foundation, akhare@sequoiaclimate.org. 
 Fellow, Prayas Energy Group, aditya@prayaspune.org. 

Copyright © Paul, Khare and Chunekar 2022. Released under Creative Commons 

Attribution © NonCommercial 4.0 International licence (CC BY-NC 4.0) by the author.  

Published by Indian Society for Ecological Economics (INSEE), c/o Institute of  Economic 
Growth, University Enclave, North Campus, Delhi 110007.  

ISSN: 2581–6152 (print); 2581–6101 (web).  

DOI: https://doi.org/10.37773/ees.v5i2.791  

 

mailto:spaul@sequoiaclimate.org
mailto:akhare@sequoiaclimate.org
mailto:aditya@prayaspune.org
https://doi.org/10.37773/ees.v5i2.791


 Ecology, Economy and Society–the INSEE Journal [16] 

 

industrial customers between the unusual hours of 6 pm to 10 pm (The 
Economic Times Energy World 2022).1   

In this context, balancing India’s supply-side push for renewables with 
demand-side management programmes and energy efficiency provides a 
significant opportunity to manage such crises and spur the clean energy 
transition. Moreover, doing so would contribute to meeting the country’s 
climate objectives, as it would reduce the dependency on coal for balancing 
the grid as more renewables are added to the supply mix.  

At present, India’s power system relies heavily on coal; the country is trying 
to balance the need to reliably supply electricity to its people and businesses 
while simultaneously meeting its climate objectives. The International 
Energy Agency (IEA) has said that “All roads to successful clean energy 
transitions go via India” (IEA 2021, 16). As the first major economy to be 
developing in a carbon-constrained world, India could pioneer an economic 
growth and sustainable development model that breaks away from fossil 
fuels. If India is successful, it can act as a template for other countries on 
the frontiers of development in Asia and Africa.  

At the 2021 Glasgow Conference of Parties to the Climate Convention, 
Prime Minister Modi announced five commitments or “Pachamrit”, raising 
to a new level India’s ambitions for addressing climate change (Ministry of 
External Affairs 2021). One of these goals involves achieving 500 GW of 
non-fossil energy capacity by 2030. As of December 2021, India’s installed 
renewable capacity was about 151 gigawatts (GW), making it 38% of the 
total installed capacity of 393 GW (Central Electricity Authority 2022).  

While renewables are important for fostering the clean energy transition 
and achieving energy independence, they require colossal amounts of 
investments. To achieve the goal of 500 GW of non-fossil energy capacity 
by 2030, for example, it is projected that India will need to invest $30 to $40 
billion each year in infrastructure (Garg 2022). In this context, it is 
important that India not allow its energy demand to outpace its goals. To 
use the analogy of a faucet and a tub, if we wish to fill the tub (achieve 
energy security through renewables) while increasing supply, we must also 
reduce the leakage (i.e., inefficiently managed demand) by promoting energy 
efficiency. One critical step involves improving appliance efficiency 
standards. In the last six years, the government-owned Energy Efficiency 
Services Limited achieved significant success when it distributed over 300 
million LED bulbs to replace CFL lights, thereby saving 39 million tonnes 

 
1 High solar radiation, wind speed, and availability of land to establish utility-scale solar parks 
make Rajasthan a renewable-rich state in India. 



[17] Seema Paul, Amit Khare and Aditya Chunekar  

 

 
 

(MT) of CO2 emissions annually (Energy Efficiency Services Limited 2022). 
Success at this scale needs to be replicated for the top 10 appliances whose 
ownership is expected to accelerate significantly in this decade and beyond. 
These appliances include air conditioners, ceiling fans, refrigerators, TVs, 
lights, electric water heaters, agricultural pumps, washing machines, and 
motors. Modelling shows that India’s peak electricity demand from the top 
10 most electricity-consuming appliances and equipment alone will 
constitute 200 GW or ~60–70% of the projected total peak demand before 
2040 (Abhyankar et al. 2017). This is equal to the output of nearly 400 large 
thermal power plants.  

Managing the growth in energy demand—especially during peak hours—
would be extremely beneficial to India, including by reducing the 
investment required for the unabated expansion of non-fossil fuel power, 
which also runs into the challenge of limited land availability. Furthermore, 
it helps in managing the challenge of a clean grid posed by the intermittent 
nature of renewables. At present, to supply consumers with power when 
renewables are not available, DISCOMs rely on fossil fuel–based resources. 
One of the most important solutions to a fossil fuel–free grid is battery 
storage. Despite being a robust technology, grid-scale batteries are not yet 
cost-competitive in India, leading to a reliance on coal plants, which 
contribute to air pollution. However, India can easily consider cheaper yet 
reliable demand-side options or demand response/demand flexibility—
including distributed storage and load shifting—to remain firmly on the 
clean energy transition trajectory.  

In the US, utility-administered demand response (DR) programmes play an 
essential role in lowering peak demand to lessen the chances of blackouts 
(US Energy Information Administration 2019). DR programmes typically 
offer customers a financial incentive for reducing energy use during 
specified hours and help reduce the need to build new generation plants to 
meet peak power demand. 

Another complementary approach is leveraging distributed storage systems. 
These are small-scale standalone systems such as electric vehicle batteries or 
small battery systems that can send electricity back to the grid during peak 
hours to manage reliability. The California Public Utilities Commission 
(CPUC) recently approved three vehicle-grid integration pilots to manage 
peak power demand and achieve climate benefits ( California Public 
Utilities Commission 2022). Combined, such comprehensive approaches 
constitute ‘demand flexibility’, which benefits DISCOMs, consumers, and 
the environment. 



 Ecology, Economy and Society–the INSEE Journal [18] 

 

These demand-side options would remain relevant even when battery 
storage becomes cost-competitive because they will reduce the extent to 
which additional power infrastructure, including power plants and batteries, 
would be needed.  

2. EFFICIENCY FIRST 

Any path towards a self-reliant India that also addresses energy security and 
environmental challenges must go concomitantly with ‘energy efficiency’. 
Investing in energy efficiency programmes and managing electricity demand 
is much cheaper than building new power plants as the cost of conserved 
electricity through energy-efficient appliances in India is lower than the 
consumer tariff (Abhyankar et al. 2017).2 Doing so has the potential to save 
300 terra watt-hours (TWh) of electricity annually, reducing the peak load 
by ~80–100 GW, reducing power cuts such as those being witnessed in 
New Delhi right now (Abhyankar et al. 2017). As per the IEA India Energy 
Efficiency Outlook (2016), the power sector is going to avoid producing 
approximately 875 TWh in 2040, about an $18 billion per year reduction in 
investment for electricity generation, through improved energy efficiency. 

3. CONCLUSION 

Around the world, key economies are vying to have a clean electricity 
grid—one that is free of fossil fuel use—as fast as possible. While India 
does so, it is also essential to maximise the potential for energy efficiency 
and decouple economic growth from energy intensity. Adding more 
renewables to meet India’s growing energy demand and replace fossil fuel–
based generation is critical to India’s sustainable growth; however, a 
renewables-only approach that ignores energy efficiency will produce 
reliability-, cost-, and land-related challenges. Additionally, energy efficiency 
will produce multiple benefits for the nation and the people while 
addressing concerns arising from India’s growing demand for electricity, 
especially during peak demand periods in the summer months. Energy 
efficiency is a precursor to India achieving its climate goal, and along with 
other approaches being prioritised, will help place India strongly on the net-
zero emissions by 2070 pathway. 

REFERENCES 

Abhyankar, Nikit, Nihar Shah, Virginie Letschert, and Amol Phadke. 2017. 
“Assessing the Cost-effective Energy Saving Potential from Top-10 Appliances in 

 
2 Energy efficiency measures are considered cost-effective when the cost of conserved 
energy (CCE) is lower than the price of energy it replaces.  



[19] Seema Paul, Amit Khare and Aditya Chunekar  

 

 
 

India.” 9th International Conference on Energy Efficiency in Domestic Appliances and Lighting 
(EEDAL): 25. https://international.lbl.gov/publications/assessing-cost-effective-
energy.  

California Public Utilities Commission. 2022. "CPUC Supports Transportation 
Electrification with Approval of PG&E Vehicle-Grid Integration Pilot Programs." 
Accessed May 13, 2022. https://www.cpuc.ca.gov/news-and-updates/all-
news/cpuc-supports-transportation-electrification-with-approval-of-pge-vgi-pilots.    

Central Electricity Authority. 2022. "Dashboard." Accessed May 13, 2022. 
https://cea.nic.in/dashboard/?lang=en.  

Energy Efficiency Services Limited. 2022. UJALA – Energy Efficiency Services Limited. 
Accessed May 13, 2022. https://eeslindia.org/en/ourujala/. 

Garg, Vibhuti. 2022. Renewables Investment Trends in India. Institute for Energy 
Economics and Financial Analysis. Accessed June 17, 2022. 
https://ieefa.org/sites/default/files/2022-
06/Renewables%20Investment%20Trends%20in%20India-June_2022.pdf.  

IEA. 2016. Energy Efficiency Outlook for India – Sizing up the Opportunity. 
“IndiaEnergyEfficiencyOutlook_20161215_Final.Pdf.” International Energy 
Agency. Accessed May 13, 2022. 
https://iea.blob.core.windows.net/assets/a27eeef7-b4ef-44f2-b7ca-
0c85db33d0b7/IndiaEnergyEfficiencyOutlook_20161215_Final.pdf. 

———. 2021. India Energy Outlook 2021. International Energy Agency. Access May 
13, 2022. https://iea.blob.core.windows.net/assets/1de6d91e-e23f-4e02-b1fb-
51fdd6283b22/India_Energy_Outlook_2021.pdf    

Ministry of External Affairs. 2021. “National Statement by Prime Minister Shri 
Narendra Modi at COP26 Summit in Glasgow.” Accessed May 13, 2022. 
https://www.mea.gov.in/Speeches-
Statements.htm?dtl/34466/National+Statement+by+Prime+Minister+Shri+Nare
ndra+Modi+at+COP26+Summit+in+Glasgow. 

The Indian Express. 2022. “India’s Peak Power Supply Touches Record Level of 
207GW on Friday.” 2022. The Indian Express, April 29. 
https://indianexpress.com/article/india/indias-peak-power-supply-touches-
record-level-of-207gw-on-friday-7894174/. 

The Economic Times Energy World. 2022. “Scheduled Power Cuts in Rajasthan 
from Thursday – ET Energy World.” ETEnergyworld.com. Accessed May 13, 
2022. https://energy.economictimes.indiatimes.com/news/power/scheduled-
power-cuts-in-rajasthan-from-thursday/91142488. 

US Energy Information Administration. 2019. Demand-side Management Programs Save 
Energy and Reduce Peak Demand. Accessed May 13, 2022. 
https://www.eia.gov/todayinenergy/detail.php?id=38872.  

———. 2021. India Has the Opportunity to Build a New Energy Future – News. Accessed 
May 13, 2022. https://www.iea.org/news/india-has-the-opportunity-to-build-a-
new-energy-future. 


