10 strategic imperatives for India to achieve its energy vision

20 April 2023 Consultancy.in 5 min. read
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In a new report, experts from Arthur D. Little have analyzed India’s energy industry and its key ambitions, including the goal of becoming energy independent by 2047, meeting growing demand for power consumption, and boosting renewable energy.

Based on their research, the consultants set out 10 key imperatives that will guide India in achieving its energy vision across the value chain of generation, transmission, and distribution.

Power generation

With about 405 gigawatts (GW) installed power capacity, India is the third-largest producer of electricity in the world.

10 strategic imperatives for India to achieve its energy vision

A range of factors – including population growth, digitization, technological advancements and growth of the middle class – is expected to grow demand for electricity consumption. According to an estimate from NITI Aayog, electricity consumption will grow at a rate of around 5% per year up to 2047, creating the need for India to more than double its generating capacity in the next decades.

Scaling up green energy’s contribution for an affordable and cleaner energy mix – by introducing reforms to improve investors’ confidence, removing entry barriers such as difficulty in land acquisition, boosting domestic manufacturing of photovoltaic (PV) cells and wind equipment, and incentivizing adoption of rooftop solar.

10 strategic imperatives for India to achieve its energy vision

The industry should emphasize baseload technologies like offshore wind and nuclear generation, increasing nuclear energy production by establishing scalable small modular reactors (SMRs), utilizing locally available thorium, and building a regulatory environment conducive to these alternatives.

Further reading: India's power sector is gravitating towards renewables.

Promoting green hydrogen as a carbon-neutral energy storage solution – by increasing the use of green hydrogen as a carbon neutral energy storage solution through financial incentives for stakeholders and by ensuring self-sufficiency in electrolyzer production. Readily available biomass can generate green hydrogen as long as robust logistics are in place to support it.

10 strategic imperatives for India to achieve its energy vision

Accelerating carbon capture, utilization, and storage (CCUS) adoption for decarbonization – by accelerating adoption of CCUS for decarbonization via introducing financing channels for CCUS implementers, investing in R&D to identify cost-effective mechanisms, establishing a start-to-end governance framework for CCUS management, and participating in global forums to leverage recent developments.

Power transmission

In India, transmission of electricity bears a technical loss of 3.6%, which is high compared to other nations. Key will be to ensure the segment returns to profitability and is future ready to accommodate changing dynamics within the industry.

Enhancing infrastructure development and capacity augmentation – by improving infrastructure through deployment of anti-theft and anti-oxidation cables to reduce theft and technical losses, shifting toward high-voltage direct current (HVDC) lines for long-distance transmission, imposing stricter penalties for transmission network developers upon default, and expediting development of interstate transmission lines.

10 strategic imperatives for India to achieve its energy visionSecuring future of national smart grid – by designing and implementing a strategy for a smart grid that emphasizes efficient data collection by installing smart meters at nodal points, securing data communications by using narrow broadband technologies such as RF-2.4 GHz, building data concentrator units, and piloting dedicated systems like smart grid control centers (SGCCs) and outage management systems (OMSs).

Creating opportune deployment of microgrids – by deploying microgrids in coordination with local operators while retaining the possibility of complete integration into the national grid in the future

Establishing world-class grid congestion management – by acknowledging that more efficient use of available network capacity will become a necessity with an increasing share of renewable energy. Unnecessary grid investments and ineffective grid operations must be avoided through the deployment of direct control methods (e.g., peak shaving), market-based methods, or a combination of both.

Power distribution

In India, the distribution of power is the most troubled segment across the value chain. Of late, state distribution companies have been characterized by negative net worth (-$4.49 billion) and high debt ($62.87 billion), along with operational inefficiencies (aggregate technical and commercial losses of 21.6%). The need for transformation within the distribution sector is urgent.

10 strategic imperatives for India to achieve its energy vision

Harnessing digital transition of power distribution through smart meters – by developing digital infrastructure like smart meters to transform energy distribution via designing consumercentric engagement strategies, phasing in nationwide deployment with constant feedback collection, and investing in a multilevel data security system using concepts like root of trust (RoT) and public key infrastructure (PKI).

Pushing for increased private player participation to improve efficacy – by increasing private player participation with the help of supporting regulatory frameworks as well as financial support in terms of subsidies and rebates for private entities.

10 strategic imperatives for India to achieve its energy vision

Scaling up adoption of power exchanges – by enhancing power exchange markets via introducing a market-coupling operator to discover a common market clearing price (MCP) across exchanges, initiating energy derivative markets with regulatory frameworks that support fair price determination and shorter credit lines, and considering a market-based economic dispatch model to prevent complete replacement of power purchase agreements (PPAs).


Energy independence, efficiency and sustainability is of growing importance to leading nations. By leveraging the 10 key imperatives outlined, India can drive strategic reform and achieve its energy vision.