INDIA'S POWER SECTOR EMISSIONS FALL

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Picture Courtesy:  DOWNTOEARTH

Context

A Report by the Centre for Research on Energy and Clean Air (CREA) for Carbon Brief finds that India’s power-sector CO₂ emissions fell by about 1% year-on-year in the first half of 2025, and by 0.2% over the past 12 months. This is only the second decline in 50 years, excluding the 2020 pandemic year.

Why Power Sector CO2 emissions fall?

Clean Energy Surge Outpaced Demand Growth

India added 25.1 GW of new non-fossil capacity (solar, wind, hydro, nuclear) in just the first half of 2025 → a 69% jump compared to last year.

These projects generated power, which nearly matched the rise in total power demand.

As result, the entire demand growth was met by clean power.

Weather Factors Reduced Fossil Fuel Demand

Milder summer + prolonged rainfall → lower electricity use for air conditioning and cooling.

High hydro generation (due to good rainfall) substituted fossil-based power.

Efficiency and Diversification

Expansion of solar + wind hybrids and nuclear capacity added more stable non-fossil generation.

Power system flexibility improved, reducing dependence on coal peaking.

Structural Shift in Energy Mix

For the first time ever, clean energy capacity additions > electricity demand growth.

Share of renewables in India’s capacity mix crossed 50% by mid-2025.

Coal and gas generation stagnated, even as total electricity output rose.

Power Sector in India  

It is a core infrastructure sector, directly influencing economic growth, industrialization, and welfare.

India has transitioned from a state-dominated, capacity-constrained sector to a market-oriented, diversified, and increasingly green power sector.

Third largest globally in electricity production and consumption. Total installed capacity crossed 480 GW by mid-2025. Nearly 100% household electrification has been achieved.

Non-fossil fuel capacity has crossed 50% of the total installed capacity. Coal is still the largest source of generation.

Currently, India is at a turning point: facing fuel security challenges but also witnessing a historic fall in CO₂ emissions (2025), driven by clean energy expansion.

Government Initiatives in Power Sector

Financial and operational reforms

Revamped Distribution Sector Scheme (RDSS): Approved in 2021 with an outlay of over ₹3 lakh crore, RDSS offers financial assistance to Discoms to improve operational efficiency and financial sustainability.

Ujwal Discom Assurance Yojana (UDAY): Launched in 2015, UDAY addressed Discom debt by allowing state governments to take over 75% of their accumulated debt.

Renewable energy promotion

PM Surya Ghar Muft Bijli Yojana: Launched in February 2024, this scheme aims to provide free electricity to one crore households through rooftop solar installations.

PM-KUSUM Scheme: Supports farmers by providing financial assistance for installing standalone solar pumps and small grid-connected solar power plants on their land.

National Green Hydrogen Mission: Launched in 2023 with an outlay of ₹19,744 crore, this mission aims to establish India as a global hub for green hydrogen production and export.

Production Linked Incentive (PLI) Scheme: This scheme supports domestic manufacturing of high-efficiency solar PV modules with an outlay of ₹24,000 crore, reducing import dependence. 

Infrastructure and access

National Smart Grid Mission (NSGM): Established in 2015, the NSGM plans and monitors the deployment of smart grid technologies to improve grid reliability, integrate renewables, and enhance consumer management.

Pradhan Mantri Sahaj Bijli Har Ghar Yojana (Saubhagya): Launched in 2017, this scheme successfully connected more than 2.8 crore households to the grid by 2021, achieving near-universal household electrification.

Green Energy Corridor Projects: Projects aim to build the transmission infrastructure needed to evacuate renewable power from generation-rich regions to load centers across the country. 

Source: DOWNTOEARTH