Explaining expedited energy transition toward renewables by COVID-19 in India

ABSTRACT

Energy transition toward renewables, mainly wind and solar, has gained momentum in the past decade. Although the COVID-19 pandemic brought unprecedented, multi-faceted challenges and uncertainties, India witnessed an expedited energy transition in 2020. With our newly constructed Electric System Dispatch Model for India (ESDMI), this study aims to provide an explanation of the underlining mechanisms. The Janta Curfew (7am-9pm) in India was observed on March 22, 2020 followed by a 21-day complete lockdown starting March 25, 2020 to control the spread of the virus. Electricity demand in India dropped by nearly a quarter. We model the supply-side dynamics prior to and during the pandemic response as well as in a counterfactual scenario in the pandemic's absence. We find that the expedited energy transition could be explained by (i) the higher priority of a large renewables fleet to access electric grid either through stipulations and the merit order effect, and (ii) coal-fired electricity generation is less flexible than natural gas and hydropower units. A substantial amount of coal-fired power plants in India are still far from reaching their designed lifetimes. Their low resilience in such crises could exacerbate the problem of stranded assets.