251. Unlocking India’s Energy Transition: Opportunities, Challenges, and the Role of Cross-Subsidies
- Author:
- Fatima Mumtaz
- Publication Date:
- 04-2025
- Content Type:
- Journal Article
- Journal:
- Journal of Public and International Affairs (JPIA)
- Institution:
- School of Public and International Affairs (SPIA), Princeton University
- Abstract:
- This paper examines India’s opportunities and challenges in unlocking its clean energy transition. While the country has made significant advancements in expanding its renewable energy capacity, structural inefficiencies within the electricity sector continue to hinder progress. A key barrier is the cross-subsidy pricing mechanism, which charges commercial and industrial users higher electricity tariffs to subsidize power for agricultural and residential consumers. Although originally intended to promote equity, this mechanism has, over time, contributed to mounting debts for power distribution companies, ultimately weakening the financial health of the electricity grid. This paper provides an analysis of the consequences of the cross-subsidy electricity pricing mechanism. It further explores how a phased approach to reforming this pricing structure could offer a viable pathway to address the financial instability of the power distribution companies.
- Topic:
- Climate Change, Electricity, Renewable Energy, and Energy Transition
- Political Geography:
- South Asia and India