Modelling the impacts of carbon pricing in India’s power system using a dynamic optimization approach

• Published in: The Electricity journal Vol. 36; no. 6; p. 107291
• Main Authors: Benitez, Liliana E., Brinkerink, Maarten, Shivakumar, Abhishek, Deane, Paul
• Format: Journal Article
• Language: English
• Published: Elsevier Inc 01.07.2023
• Subjects: Climate change mitigation; Decarbonization; India; Power systems modelling; Renewable energy; Renewable energy; Climate change mitigation; Power systems modelling; Decarbonization; India
• ISSN: 1040-6190; 1873-6874
• DOI: 10.1016/j.tej.2023.107291

India has a significant importance in achieving the global Paris agreement’s long-term goal as it is the world's third-largest consumer of energy. This paper aims to improve the understanding of the opportunities and constraints of decarbonizing India’s electricity sector and adds to the growing body of literature by modelling the electricity sector in India with a dynamic optimization approach that assesses options for effective greenhouse reductions through carbon pricing. Attaining significant variable renewable energy penetration in India by 2050 is consistent with the lowest cost power generation options identified through our simulations, where solar and wind can provide 66 % of the electricity needs by 2050, even without a carbon price. With a carbon price of US$50/tCO2e, the simulations project that wind and power generation share in the electricity mix will rise to 81 %, leading to significant emission reductions. In this scenario, power sector emissions will be 164 million tCO2e by 2050, which is only about 14 % of the emissions levels in 2019. The analysis also indicates that fossil fuels remain part of India’s electricity mix in 2050, but their role and operation would dramatically change. When a carbon price of US$50/tCO2e is introduced, coal capacity remains valuable to fill demand when solar and wind are not available. This would require modifications in operation schedules and repurposing coal power plants for frequent ramping up and down.