Sixteen out of 35 Indian States and Union Territories (UT) lag behind the national average score in NITI Aayog’s State Energy and Climate Index Round-I, designed to measure various energy efficiency and climate resilience factors.

The State Energy and Climate Index is India’s first-ever index, aiming to track the efforts made by states and UTs in the climate and energy sector and provides an in-depth analysis of individual states to help enhance their performance in the sector.

The index expects to encourage healthy competition among the states on different dimensions of energy and climate by ranking them on their efforts to improve energy access, energy consumption, energy efficiency, and safeguarding the environment.

An iterative method was followed to reach the final set of indicators with follow-up meetings held with industry experts. The indicators were selected based on their importance and the availability of reliable annual data from existing data sources; the data used for this analysis is from 2019 to 2020. And for a better comparison, the states were classified as larger states, smaller states, and union territories.

The index consists of six parameters: DISCOM’s performance; Access, Affordability, and Reliability; Clean Energy initiatives; Energy Efficiency; Environmental Sustainability; and New Initiatives. The parameters are further divided into 27 indicators.

State Rankings

Post the analysis of all the indicators, the overall score for India worked out to be 40.6.

The analysis found Gujarat with an average score of 50.1, Kerala with 49.1, and Punjab with 48.6 were the top three performers among larger states.

Goa emerged as the top-performing state in the ‘Smaller States’ category with a score of 51.4, followed by Tripura with 45 and Manipur with 36. Among UTs, Chandigarh at 55.7, Delhi at 55.6, Daman and Diu, and Dadra and Nagar Haveli at 53.2 were noted to be performing well.

In the larger states category, the state with the lowest scoring was Chhattisgarh, averaging 31.7. The analysis noted that the state did not perform well in clean energy initiatives, energy efficiency, environmental sustainability, and new initiatives. Madhya Pradesh, Bihar, Jharkhand, and Orissa also had greater scope for improvement in terms of clean energy initiatives, energy efficiency, environmental sustainability, and new initiatives.

Though Gujarat is the best-performing state, its performance in terms of environmental sustainability and new initiatives needed improvement, the analysis suggested.

Arunachal Pradesh scored the lowest among the smaller states at 27, alongside Nagaland and Meghalaya at 27.9 and 29.4. Lakshadweep averaging 26.9, was at the bottom of the union territories list.

The three UTs and two states that scored above 50 were Chandigarh, Delhi, Daman & Diu, Dadra & Nagar Haveli, and Gujarat and Goa. Overall, even though more than half of the states scored higher than the average value (40.6), there were a total of 16 states and union territories lagging.

Scope for Improvement

The overall index score and the scores achieved under each parameter leave scope for huge improvements, suggesting that while India may possess a conducive environment and energy-related policies, it is not necessarily translating into transforming the sector.

The analysis in the index suggests that the targeted Direct Benefit Transfer (DBT) could help reduce leakages and improve efficiency. It also recommends a future policy direction to amplify energy efficiency programs and technological innovation and build the EV ecosystem to decarbonize transportation.

The report suggests that most states with a low score struggled with higher Aggregate Technical and Commercial (AT&C) losses and complex tariff structures with their respective DISCOMs. It recommends that the state DISCOMs may benefit from aggressively using the revamped central government reform scheme to upgrade their distribution infrastructure and systems.

The report said states could improve their performance by increasing the hours of electricity supplied at affordable rates and improving data availability of hours of electricity supply in rural and urban areas.

Shri Amitabh Kant, CEO, NITI Aayog, said, “Achieving the ambitious climate targets would require a conducive policy environment to encourage investment. The State Energy & Climate Index Round-I will help initiate a dialogue with the states on the energy sector so that much required policy improvements can be made.”

In August last year, NITI Aayog and Rocky Mountain Institute (RMI) analyzed the learnings and best practices from domestic and global experience to help state governments consider further reforms to put their power distribution sector on the track to efficiency and profitability.

In December 2021, the Ministry of Power said that 39 out of 55 electricity distribution companies (DISCOMs) had submitted draft proposals under the ₹3.03 trillion (~$40.82 billion) reforms-based result-linked power distribution program.