A Double Whammy

Conundrum of Energy Transition for Social Transition or for Climate Action or Both?

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The article explores the critical role of people-centric, decentralized energy transitions in driving both social change and climate action, particularly in India's aspirational districts. Anandajit Goswami argues that while localized energy solutions like solar microgrids can improve livelihoods and reduce local emissions, their global impact on climate change remains limited, requiring a careful balance between development goals and climate commitments.

Is energy transition a necessary condition for social transition and climate action? Energy transition can only be a necessary condition for social transition when it is people-centric and just. Moreover, it will only result in scaling up for climate action if it leads to a marginal change first and then proceed towards radical change thereafter cascading to a transformational change.

For large-scale implementation, initial subsidy support through various business models such as blended finance, public-private partnerships, and grant-based models may be required to subsidize 75 per cent of the electricity provision cost for the households and villages. These areas rely on decentralized solar microgrids to meet their lighting needs along with their demand for electricity for dehulling, irrigation, and education. Often the investment subsidy needed to scale up for decentralized microgrid-connected households in off-grid aspirational districts of India can be to the tune of 45 per cent.

Thus, subsidies for decentralized electricity provision can act as a social multiplier, particularly in the aspirational districts of Bihar, Jharkhand, and Uttar Pradesh. The following experience and learning emanate from one of the projects conducted by the Ashoka Centre for People Centric Energy Transition on clean rural energy transition financing.