West Bengal’s Energy Policy: where does it stand against other states
Authors: Rayandev Sen, Marisha Ghosh, Anindyo Kamal Sen (Jadavpur University, Department of Economics)
This piece is from the paper presented during the Bengal Policy Hackathon - co-hosted by Bengal Development Collective and Public Policy Club - IIM Calcutta in association with Swaniti Initiative.
Find the problem statement here: Energy Transition: The State of West Bengal
India has respectable credentials when it comes to traditional renewable energy generation methods, particularly solar energy. The country has the largest solar power plant in the world as well as the world’s first solar-powered airport, along with a growing wind energy sector. However, West Bengal does not share these achievements. Due to low luminosity, wind speed and slow-flowing rivers, the total share of traditional renewable energy sources (TRES) in Bengal’s total energy production is only 12.33% (PIB, 2019), one of the lowest in the country.
Dirty energy usage also dominates at the micro-level, with large sections of the population using dirty cooking fuel, kerosene and diesel-based power sources. This brief seeks to summarise Bengal’s current state of clean energy transition and recommends policy changes that are inspired by other successful states in the country.
Geographical factors constrain the easy transition of Bengal from coal to clean energy. Low sunlight and heavy rains reduce the efficiency of solar panels, sluggish water flow in rivers constraints dam development and low wind speeds make wind power unviable. Though there exist regions in Bengal where nuclear power plants can be built, nuclear projects have faced heavy backlash from locals in the recent past. Thus, Bengal is effectively out of options for transitioning to TRES which makes us consider non-traditional methods.
Assam faces similar geographical constraints as West Bengal, limiting clean energy generation. In collaboration with the central government under its Green Hydrogen Policy (GHP), 2022, it has commissioned a hydrogen generator that has the potential to generate 1.5MwH (RMI, 2019). Bengal is an ideal state for hydrogen potential - it has an extensive coastline, flat terrain and abundant space. Private companies across India have displayed interest in supplying H2-based power with Larsen and Toubro setting up their own plant in Gujarat to power private and public operations. Historically, the best way to initiate private investment in new technology has been a combination of financial and technical incentives. Subsidising construction costs and allowing limited-time tax exemptions while maintaining regulatory authority (as with private electricity suppliers in the state such as the Calcutta Electric Supply Corporation) is likely to attract private investment in this sector. Collaboration with the GHP, 2022, which shifts the burden of transmission costs to the Center instead of the producer (and the state) will further incentivise private production of green hydrogen energy in the state while keeping investment costs low.
Another viable way to reduce dirty energy consumption is to use energy-efficient technology. Bengal’s index score for energy savings in commercial and public buildings is 0 compared to 100 in Tamil Nadu (NITI AAYOG, 2022). Tamil Nadu Energy Conservation Building Code (TNECBC) Rules, 2022 prescribes standards for aspects like building envelopes (within walls and roofs) to minimise heat gain and sets out rules to incorporate natural lighting into buildings. Buildings that do not utilise any energy or fossil fuel are exempted from this. West Bengal has shown a steady increase in electricity consumption, leading to an expansion of thermal power capacity. With growing urbanisation and rural development, cost-effective energy efficiency methods need to be imbued into the infrastructure.
Incorporating a peak-load consumption limit on commercial buildings with mandatory natural ventilation leads to a 40% decrease in energy usage (Bureau of Energy Efficiency, 2020). Though Bengal has drafted its own code for energy conservation(West Bengal Energy Conservation Building Code, 2020) for new constructions it has not been able to take ventilation and load management into account, leading to a gap in its energy conservation policy.
Energy transition in major countries and states is not only driven by changes in the macro-level infrastructure but also by micro-level changes in the day-to-day consumption of the people. Households tend to consume energy in three major ways - via electricity, their choice of cooking fuel and transport fuel. Bengal has the potential to improve on all three counts at this level.
Cooking Fuels and Electricity
In India, though 99% of households have LPG coverage only 40% use it for cooking (ORF, 2022). In Bengal particularly, approximately 57 million people use dirty cooking fuels. Evidence from representative data for the state suggests that the use of such fuels significantly increases risks of ill health for members of the household, contributes to air pollution in the locality and collection of such dirty fuels by members of the household reduces their economic productivity (Chattopadhyay et al., 2021).
Policy in other states, like Delhi, has been focused on subsidies and spreading awareness. HPCL, Ministry of Renewable Energy and other central government bodies hold information campaigns on the detriments of using dirty cooking fuels and for adopting LPG. Studies and policy simulations (Chattopadhyay et al., 2021; Vishwanathan & Kumar, 2005) have shown, for Bengal particularly, increasing knowledge on dirty fuels will have a significant impact on reducing their consumption. State-wide information campaigns by the government combined with pre-existing subsidy schemes can be an effective method for the micro-level energy transition in cooking fuels.
As mentioned previously, Bengal is not suited for traditional clean energy generation methods. It is one of the largest rice producers in the country, producing 42 million tonnes of rice husk annually, which is usually composted or burnt. Maharashtra has the highest number of biogas installations in the nation and the gas from these plants has acted as a substitute for diesel in generators, farm equipment and household appliances - leading to a 70% drop in diesel usage in the average village (TBI, 2020). The by-product of biogas plants can be used as fertiliser and for incense production - adding economic value to farmers’ lives. With West Bengal’s massive agricultural output, a transition to biogas as an alternative source of energy in rural regions is the natural step. Maharashtra has a comprehensive system of grants and subsidies transferred to village panchayats for setting up and managing their biogas plants. A similar set of incentives for target villages along with routine operational and maintenance checks provided by the government can lead to a major transition to clean energy in rural Bengal.
Transition in Transport
The running cost of a CNG car is about Rs 2.6/km compared to Rs 7.5/km (petrol) resulting in savings of about 65%. There are similar arguments against the use of diesel as well. An electric car will save one Rs. 10,12,340 in 8 years compared to a similar petrol car after driving 1,20,000 km (PII, 2020). CNG public transport also reduces net pollution in cities. Consumers also bear the opportunity cost of not switching which include medical bills due to the pollution cost of these fuels and high fuel prices forcing people to cut expenditure on health and utilities (State Bank of India, 2021).
From above, the states of Karnataka and UP lead electric vehicle transport in the country. Bengal is in the process of setting up EV infrastructure such as charging stations; it may follow their scheme of efficient yet economical subsidies which made EVs so successful in these states. The cost to the government is estimated to be Rs 215 crores - which is 0.1% of the total receipts in the state’s budget in 2022. Furthermore, to shift consumers’ preferences towards CNG, the state can provide an exemption in VAT for CNG users and keep its price constant despite the increase in the cost of gas.
The following subsidy scheme for West Bengal based on Uttar Pradesh Electric Vehicle Manufacturing and Mobility Policy 2022 is proposed:
As with cooking fuels, studies (IEA, 2020; ORF, 2022) have shown that information campaigns lead to higher adoption of electric vehicles by transport providers - thus a mixture of campaigning and subsidies is needed.
Transitioning to clean energy demands changes in its production and consumption at both the micro and macro levels. Such changes tend to be heavy on the state’s pockets. However, through regulated privatisation, strategic subsidies and comprehensive information campaigns a transition can be achieved without breaking Bengal’s bank. Overall, the state should:
Facilitate private production of green hydrogen energy in the state by subsidising construction costs and allowing limited-time tax exemptions while maintaining regulatory authority
Incorporate a peak-load consumption limit on commercial buildings with mandatory natural ventilation
Bring forth the transition to biogas as an alternative source of energy in rural regions using the massive amounts of rice husk that Bengal produces annually
Conduct information campaigns to make consumers aware of the opportunity costs of using dirty fuels
Lead a transition to CNG cars and EVs by subsidising service providers and consumers of EVs, providing an exemption in VAT for CNG users and keeping the price of CNG comparatively low despite the increase in the cost of gas
These policies would eventually lead to a cleaner mode of energy generation in the state, reduce deaths and illnesses caused by dirty fuels, and make public transportation in the state cleaner and cheaper - positively impacting citizens in every socio-economic stratum.
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