Transitions to Renewable Energy in Industrializing Countries A comparative case study of the Indian states Maharashtra and Tamil Nadu

FNI Report 6/2015. Lysaker, FNI, 2015, 87 p.

A key challenge for future climate change mitigation efforts will be to ensure that industrializing countries make a successful transition from a fossil-heavy energy system to a more sustainable one, where renewable energy sources are predominant. Yet, great variation is observed in the degree of renewable energy spread in industrializing countries. What explains this variation? This report aims to shed light on the determinants of variation in renewable energy transitions in one key industrializing country: India, in hopes that explanations for renewable energy spread here can be applied to this group of countries in general. Through a comparative case study of the electricity sector of the Indian states Maharashtra and Tamil Nadu, propositions derived from two different theoretical perspectives on societal transitions are tested, and linkages are drawn between proposed explanatory mechanisms and the degree of renewable energy spread in the two states.
 The report concludes that in the analyzed cases, clear and direct support policy instruments aimed at facilitating renewable energy greatly help its spread, as long as other contending political issues are not more salient and are taking precedence. One such contending political issue is rapid growth in energy demand. Differences in renewable energy spread in Maharashtra and Tamil Nadu can largely be traced back to the more pressing energy demand situation in the former state, and the greater political saliency of renewable energy in the latter. At the end of the analyzed period, when these two aspects become more similar across cases, the differences in renewable energy spread also dissipate. A directly observed process is that higher power deficits and higher energy demand growth leads to pressure towards the ability of renewable energy to provide enough electricity. This in turn forces a shift in state priority towards fossil energy sources. Empirical observations throughout the analysis further indicate that a high coal dependency is linked to a generally lower spread of renewable energy.