How the States Fare

NITI Aayog’s index benchmarks states’ energy and climate performance

In a first-of-its-kind initiative, NITI Aayog has released the State Energy and Climate Index (SECI), which ben­chmarks the performance of the states on various energy sector parameters and mea­sures for mitigating climate change. The first round of the index, released in April 2022, evaluates the performance of the states in 2019-20 across several key pe­rformance indicators  (KPIs) covering various parameters.

Recognising the importance of state discoms in the energy value chain for providing sustainable, affordable and reliable power, the index gives 40 per cent we­i­ghtage to discom performance. The scores and ranks are presented as per la­r­ger states, smaller states and union territories (UTs). Gujarat, Kerala and Punj­ab are the top three performers among the larger states. Goa is the top perfor­m­er in the smaller states category, follow­ed by Tripura and Manipur; and Chan­digarh, Delhi, and Dadra & Na­gar Haveli and Daman & Diu (D&D and D&N) are the top performers among the UTs. Besides ranking the states on multiple performance parameters, SECI aims to promote peer-to-peer learning and encourage healthy competition among the states.

Power Line presents an overview of the key findings and learnings from NITI Aayog’s SECI Round I…

Objective and methodology

The objective of SECI is to rank the sta­tes based on their efforts to improve en­er­gy access, consumption and efficiency, as well as to safeguard the environ­me­nt. It aims to drive the agenda of aff­or­dable, accessible, efficient and clean energy transition at the state level, and encourage healthy competition among the states on various aspects of energy and climate change mitigation.

The index has been designed based on 27 KPIs covering six parameters – discom performance; access, affordability and reliability of energy; clean energy in­­i­tiatives; energy efficiency; environmental sustainability; and new initiati­ves. While discom performance has been assigned the highest weightage (40 per cent) in the overall index, access, aff­or­dability and reliability of energy; and clean energy initiatives have been given a weightage of 15 per cent each. Envi­ro­n­mental sustainability and new initiatives have been assigned 12 per cent we­i­ghtage each and energy efficiency has been given 6 per cent weightage.

The scores and ranks are presented as per the categories of larger states, smaller st­ates and UTs. Besides, the top one-third of states are considered as front runners, the middle one-third as achievers, and the last one-third as aspirants.

SECI scores of the states

The all-India score, calculated as an average of the state-wise score, works out to 40.6. Among the larger states, Gujarat, Ke­ra­la, Punjab, Haryana, Uttarakhand and Maharashtra have emerged as the front runners. Himachal Pradesh, Karna­ta­ka, Tamil Nadu, Assam, Telangana, An­d­hra Pradesh, Uttar Pradesh, West Beng­al, Bihar and Odisha are achievers, and the remaining states are aspirants (see Figure 1 for state-wise SECI scores).

Among the smaller states, the SECI sc­or­es range from 51.4 (Goa) to 27 (Aruna­chal Pradesh). Meanwhile, the SECI sco­r­es of the UTs are in the range of 55.7 (Ch­andi­garh) and 26.9 (Lakshadweep). D&D and D&N, Chandigarh, Delhi and Puducherry are the front runners, while Jammu & Kashmir, Andaman & Nicobar Islands, and Lakshadweep fall in the aspirants’ category.

Indicator-wise performance and key learnings

Discom performance: The discoms’ performance parameter consists of nine indicators. These are debt-equity ratio, ag­g­regate technical and commercial (AT&C) losses, average cost of supply (ACS)-average revenue realised (ARR) gap, transmission and distribution (T&D) losses, time-of-day/time-of-use tariffs for consumers, direct benefit transfer (DBT), open access surcharge, regulatory assets and complexity of tariffs.

The all-India average SECI score for discom performance is 56.8. Among the larger states, Punjab is the best-performing state with higher scores for in­dicators such as debt-equity ratio, regulatory assets, open access surcharge and complexity of tariff. Meanwhile, Rajas­than has performed poorly with a zero score for its debt-equity ratio and high AT&C and T&D losses.

A number of initiatives are needed to improve the performance of discoms. Currently, sub-15 per cent AT&C losses have been recorded in only a few states such as Punjab, Gujarat, Goa and Kerala. Likewise, only a few states/UTs, such as Gujarat, Haryana, Chhattisgarh, Assam, Chandigarh, and D&D and D&N, have a favourable ACS-ARR gap. There is, moreover, an urgent need to reduce regulatory assets across states, particularly in Ma­harashtra, Uttar Pradesh, West Ben­gal, Karnataka and Delhi, and simplify tariff structures.

Access, affordability and reliability: This parameter consists of five indicators – per capita energy consumption, hours of electricity supplied to the agricultural sector, hours of electricity supplied to the industrial sector, cross-subsidisati­on, and lifeline electricity and tariff. The all-India average SECI score for access, affordability and reliability is 46.4. Am­ong the larger states, Kerala has emerged as the top performer with a sc­ore of 67.3 and has fared well on three key indicators – hours of electricity supplied for agriculture, hours of electricity supplied for industry and cross-subsidisation. A key area of concern in the ranking of states with regard to access, affor­dability and reliability of power is the lack of relevant data on the availability and reliability of electricity supply in rural and urban areas.

Clean energy initiatives: This parameter consists of three indicators – clean cooking fuel supply, renewable energy penetration and CNG vehicle penetration. On an average, the states have scored 22.6 on this parameter, indicating that proactive measures need to be undertaken to laun­ch clean energy initiatives. In terms of state-wise performance, Ha­r­­­­ya­­­na (42.9), Goa (62.4) and Chandi­garh (69.2) are the best-performing states/UTs in their respective categories. While a number of initiatives, such as the Pradhan Ma­ntri Ujjwala Yojana and DBT for LPG consumers, have been taken to provide clean cooking fuel, stat­es such as Bihar, Chh­a­t­tisgarh, Jharkh­and, Meghalaya and Naga­land need significant improvements in providing cle­an energy for cooking. In terms of CNG penetration, Delhi is the top performer while Gujarat, Haryana, Maharashtra have also performed well.

Energy efficiency: The parameter of energy efficiency consists of three indicators, pertaining to energy savings in industry, energy savings in buildings, and energy intensity. The highest score achieved by the states/UTs on this parameter is 85.4 and the lowest is zero, showing a huge variation in the performance of the states/UTs. The highest score, achieved by Tamil Nadu, is attributed to the state’s efforts in realising energy savings in the industrial, public and commercial buildings sector and its comparatively low energy intensity. Al­most half of the states have scored more than the all-India average value of 29.05. Notably, larger states such as Tamil Na­du, Maha­ra­shtra and Telangana have been making significant efforts in the adoption of the Energy Conservation Building Code and are the front runners in energy savings in commercial and public buildings.

Environmental sustainability: This parameter consists of four indicators – energy intensity of the gross state domestic product, utilisation of the renewable en­ergy potential, percentage change in forest cover, and forest carbon stock. The all-India average for environmental sustainability is 37.7 and around 50 per cent of the states/UTs have scored higher than the average value. Chandigarh has emer­ged as the top performer with a score of 62.5, while Chhattisgarh has obtained the lowest score of 5.8. Overall, in order to achieve environmental sustainability in the states in the energy sector, there is a need to bridge the resource gap, build capacities and create infrastructure for rapid proliferation of cutting-edge technologies for emission reduction, among other things.

New initiatives: This parameter consists of three indicators – electric vehicle (EV) penetration, availability of charging in­frastructure for EVs, and proportion of con­su­mers with smart meters. The difference between the highest score (58.7) and the lowest score (0.00) reveals that there is huge scope for improvement in new and emerging technologies. Among the larger states, Himachal Pradesh, with a score of 38.1, is the top performer. Tri­pura (58.7) and Sikkim (0.6) are the best- and worst-performing states respe­c­tively in the smaller states category. Delhi (49.7) is the best-performing UT.

Conclusion

To conclude, India’s recent commitment to achieve net zero emissions by 2070 and ensure reliable and affordable po­wer for all in the country requires each state to deliver its best performance on climate change mitigation and improve the performance of its discoms. SECI is ex­pected to help in achieving these ob­jec­tives by encouraging the states to undertake timely remedial measures to ensure sustainable and reliable power supply, and by promoting peer-to-peer learning and healthy competition among the states.

One of the challenges in benchmarking the performance of the states has been the lack of adequate data on several key va­riables regarding state energy sector performance and climate change mitigation initiatives. Going forward, it is imp­ortant to capture such data to ensure a comprehensive and reliable assessment of the performance of the states.

Priyanka Kwatra

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