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04 Nov 2025 : The case for energy efficiency

Editorial 2: ​​The case for energy efficiency

Context

For India to truly clean its power grid, energy efficiency must lead the way, and flexibility as not fossil fuels should drive the future.

 

Introduction

India has made major strides in clean energy, yet the electricity you use today is more polluting than five years ago. This irony sits at the core of India’s energy transition. By June 2025, non-fossil fuels formed about 50% of India’s installed capacity. Still, the grid emission factor (GEF)— which tracks how much carbon each unit of power emits - rose from 0.703 tCO₂/MWh in 2020–21 to 0.727 tCO₂/MWh in 2023–24, as per the Central Electricity Authority. This is surprising, because more renewables should mean a cleaner grid. So, why is India’s power mix getting dirtier instead?

The Capacity–Generation Mismatch

  • The key issue lies in the difference between installed capacity and actual generation. While renewables make up a large part of India’s capacity, they produce much less electricity through the year compared to coal or nuclear plants.
  • Solar and wind run only at 15–25% efficiency, while coal and nuclear work at 65–90% capacity utilisation. This means even with rising renewable capacity, coal still dominates real power generation.
  • In 2023–24, renewables (including hydro) provided just 22% of total electricity, while fossil fuels powered the rest. As demand grows, the gap widens, and coal plants continue meeting the extra load — making the grid more carbon-intensive.
  • Power demand peaks when renewables drop — evenings and nights. Solar fills the grid in daylight but fades at dusk, forcing coal plants to act as backup, which locks in emissions.
  • This mismatch shows that capacity expansion alone isn’t enough. To truly decarbonise, India must add flexibility and storage along with capacity. Though Round-the-Clock renewable power now costs under ₹5 per kWh, scaling it needs more land, transmission networks, and steady investment.

The Role of Energy Efficiency

  • Energy efficiency acts as the “first fuel”, cutting power demand before it even needs to be generated. By lowering evening and night-time peaks, it reduces coal dependence, especially when emissions are at their highest.
  • Scaling up efficient appliances such as fans, air conditioners, and motors, and designing energy-smart buildings and industries, can reshape demand patterns and support cleaner energy use.
  • Beyond saving coal, efficiency adds flexibility. It flattens demand peaks and aligns electricity use with renewable supply, preventing new investments in inefficient, polluting technologies.
  • Between FY2017–18 and FY2022–23, the Bureau of Energy Efficiency (BEE) estimated India saved 200 Million Tonnes of Oil Equivalent — about 1.29 GT of CO₂eq, worth nearly ₹7.6 lakh crore in savings.
  • Compared to France, Norway, and Sweden, whose grid emission factors are just 0.1–0.2 tCO₂/MWh, India’s 0.727 tCO₂/MWh highlights its coal-heavy base. This makes energy efficiency a core strategy, not just an add-on. Without it, renewables risk being wasted during low-demand hours.

What Needs to Be Done

  • India must let homes and offices link their batteries into virtual power plants. This will help the grid handle peak demand smoothly and reduce pressure on fossil fuels.
  • It should tighten appliance efficiency standards, pushing markets toward 4-star and 5-star models while raising performance benchmarks every few years.
  • Small and medium enterprises (SMEs) need support and incentives to use efficient motors, pumps, and production processes, cutting waste and saving energy.
  • India must introduce flexible electricity pricing. Tariffs should reward consumers for using power during hours of high renewable energy availability, balancing the grid naturally.
  • A scrappage policy should target old, inefficient machines and appliances, replacing them with cleaner, high-efficiency versions.
  • Distribution companies (DISCOMs) must start buying “electricity services”, such as green cooling as energy-efficient air conditioning powered by Round-the-Clock (RTC) renewable power.
  • According to the Central Electricity Authority’s National Electricity Plan, India’s Grid Emission Factor (GEF) could fall to 0.548 by 2026–27 and 0.430 by 2031–32. But this drop demands more than just adding solar or wind. It requires a flexible, system-wide approach with energy efficiency at its heart.

 

Conclusion

India has managed to grow its economy while reducing its emission intensity by 33% between 2005 and 2019, as reported in its Fourth Biennial Update Report to the UNFCCC. However, the recent rise in the Grid Emission Factor (GEF) shows that growth alone is not enough. India now needs a balanced approach -  one that rapidly expands renewable energy, storage, and transmission, while deeply embedding energy efficiency across homes, industries, and cities. To truly decarbonise the grid, efficiency must become the first fuel, and flexibility - not fossil fuels and must drive the nation’s clean energy future.