According to a recent study by the Reserve Bank of India (RBI), India’s energy efficiency has improved by 1.9% between 2000 and 2023, outpacing the global average of 1.4%. This is also higher than the average of 1.62% for the BRICS countries. However, India’s energy efficiency lags behind developed markets like the US and Germany, which registered more than 2% growth during this period.
The study highlighted that India’s energy-related CO2 emissions increased by 706 million tonnes between 2012 and 2022, primarily driven by economic growth. However, the report also noted that gains in energy efficiency, structural shifts in the economy, and reduced emission intensity of electricity generation, thanks to increased renewable energy use, helped offset nearly 450 million tonnes of emissions.
The report emphasizes the importance of renewables in reducing emissions, with solar and wind power accounting for 2.1% of total primary energy in 2022-23. The study suggests that India needs to intensify its efforts to expand renewable energy, as solar and wind power tariffs are now lower than those for new coal power plants, dispelling earlier concerns about the high costs of renewables.
The study employed the Logarithmic Mean Divisia Index (LMDI) decomposition method to break down total emissions into key contributing factors, including GDP growth, energy efficiency, and changes in the fuel mix. The report concludes that India can achieve the net-zero goal by focusing on expanding renewable energy and reducing the carbon intensity of electricity generation.