In a first-of-its-kind initiative, NITI Aayog has released the State Energy and Climate Index (SECI), which benchmarks the performance of the states on various energy sector parameters and measures for mitigating climate change. The first round of the index, released in April 2022, evaluates the performance of the states in 2019-20 across several key performance indicators (KPIs) covering various parameters.
Recognising the importance of state discoms in the energy value chain for providing sustainable, affordable and reliable power, the index gives 40 per cent weightage to discom performance. The scores and ranks are presented as per larger states, smaller states and union territories (UTs). Gujarat, Kerala and Punjab are the top three performers among the larger states. Goa is the top performer in the smaller states category, followed by Tripura and Manipur; and Chandigarh, Delhi, and Dadra & Nagar Haveli and Daman & Diu (D&D and D&N) are the top performers among the UTs. Besides ranking the states on multiple performance parameters, SECI aims to promote peer-to-peer learning and encourage healthy competition among the states.
An overview of the key findings and learnings from NITI Aayog’s SECI Round I…
Objective and methodology
The objective of SECI is to rank the states based on their efforts to improve energy access, consumption and efficiency, as well as to safeguard the environment. It aims to drive the agenda of affordable, accessible, efficient and clean energy transition at the state level, and encourage healthy competition among the states on various aspects of energy and climate change mitigation.
The index has been designed based on 27 KPIs covering six parameters – discom performance; access, affordability and reliability of energy; clean energy initiatives; energy efficiency; environmental sustainability; and new initiatives. While discom performance has been assigned the highest weightage (40 per cent) in the overall index, access, affordability and reliability of energy; and clean energy initiatives have been given a weightage of 15 per cent each. Environmental sustainability and new initiatives have been assigned 12 per cent weightage each and energy efficiency has been given 6 per cent weightage.
The scores and ranks are presented as per the categories of larger states, smaller states and UTs. Besides, the top one-third of states are considered as front runners, the middle one-third as achievers, and the last one-third as aspirants.
SECI scores of the states
The all-India score, calculated as an average of the state-wise score, works out to 40.6. Among the larger states, Gujarat, Kerala, Punjab, Haryana, Uttarakhand and Maharashtra have emerged as the front runners. Himachal Pradesh, Karnataka, Tamil Nadu, Assam, Telangana, Andhra Pradesh, Uttar Pradesh, West Bengal, Bihar and Odisha are achievers, and the remaining states are aspirants (see Fig. 1 for state-wise SECI scores).
Among the smaller states, the SECI scores range from 51.4 (Goa) to 27 (Arunachal Pradesh). Meanwhile, the SECI scores of the UTs are in the range of 55.7 (Chandigarh) and 26.9 (Lakshadweep). D&D and D&N, Chandigarh, Delhi and Puducherry are the front runners, while Jammu & Kashmir, the Andaman & Nicobar Islands, and Lakshadweep fall in the aspirants’ category.
Indicator-wise performance and key learnings
Discom performance: The discoms’ performance parameter consists of nine indicators. These are debt-equity ratio, aggregate technical and commercial (AT&C) losses, average cost of supply (ACS)-average revenue realised (ARR) gap, transmission and distribution (T&D) losses, time-of-day/time-of-use tariffs for consumers, direct benefit transfer (DBT), open access surcharge, regulatory assets and complexity of tariffs.
The all-India average SECI score for discom performance is 56.8. Among the larger states, Punjab is the best performing state with higher scores for indicators such as debt-equity ratio, regulatory assets, open access surcharge and complexity of tariff. Meanwhile, Rajasthan has performed poorly with a zero score for its debt-equity ratio and high AT&C and T&D losses.
A number of initiatives are needed to improve the performance of discoms. Currently, sub-15 per cent AT&C losses have been recorded in only a few states such as Punjab, Gujarat, Goa and Kerala. Likewise, only a few states/UTs, such as Gujarat, Haryana, Chhattisgarh, Assam, Chandigarh, and D&D and D&N, have a favourable ACS-ARR gap. There is, moreover, an urgent need to reduce regulatory assets across states, particularly in Maharashtra, Uttar Pradesh, West Bengal, Karnataka and Delhi, and simplify tariff structures.
Access, affordability and reliability: This parameter consists of five indicators – per capita energy consumption, hours of electricity supplied to the agricultural sector, hours of electricity supplied to the industrial sector, cross-subsidisation, and lifeline electricity and tariff. The all-India average SECI score for access, affordability and reliability is 46.4. Among the larger states, Kerala has emerged as the top performer with a score of 67.3 and has fared well on three key indicators – hours of electricity supplied for agriculture, hours of electricity supplied for industry and cross-subsidisation. A key area of concern in the ranking of states with regard to access, affordability and reliability of power is the lack of relevant data on the availability and reliability of electricity supply in rural and urban areas.
Clean energy initiatives: This parameter consists of three indicators – clean cooking fuel supply, renewable energy penetration and CNG vehicle penetration. On an average, the states have scored 22.6 on this parameter, indicating that proactive measures need to be undertaken to launch clean energy initiatives. In terms of state-wise performance, Haryana (42.9), Goa (62.4) and Chandigarh (69.2) are the best performing states/UTs in their respective categories. While a number of initiatives, such as the Pradhan Mantri Ujjwala Yojana and DBT for LPG consumers, have been taken to provide clean cooking fuel, states such as Bihar, Chhattisgarh, Jharkhand, Meghalaya and Nagaland need significant improvements in providing clean energy for cooking. In terms of CNG penetration, Delhi is the top performer while Gujarat, Haryana, Maharashtra have also performed well.
Energy efficiency: The parameter of energy efficiency consists of three indicators, pertaining to energy savings in industry, energy savings in buildings, and energy intensity. The highest score achieved by the states/UTs on this parameter is 85.4 and the lowest is zero, showing a huge variation in the performance of the states/UTs. The highest score, achieved by Tamil Nadu, is attributed to the state’s efforts in realising energy savings in the industrial, public and commercial buildings sector and its comparatively low energy intensity. Almost half of the states have scored more than the all-India average value of 29.05. Notably, larger states such as Tamil Nadu, Maharashtra and Telangana have been making significant efforts in the adoption of the Energy Conservation Building Code and are the front runners in energy savings in commercial and public buildings.
Environmental sustainability: This parameter consists of four indicators – energy intensity of the gross state domestic product, utilisation of the renewable energy potential, percentage change in forest cover, and forest carbon stock. The all-India average for environmental sustainability is 37.7 and around 50 per cent of the states/UTs have scored higher than the average value. Chandigarh has emerged as the top performer with a score of 62.5, while Chhattisgarh has obtained the lowest score of 5.8. Overall, in order to achieve environmental sustainability in the states in the energy sector, there is a need to bridge the resource gap, build capacities and create infrastructure for rapid proliferation of cutting-edge technologies for emission reduction, among other things.
New initiatives: This parameter consists of three indicators – electric vehicle (EV) penetration, availability of charging infrastructure for EVs, and proportion of consumers with smart meters. The difference between the highest score (58.7) and the lowest score (0) reveals that there is huge scope for improvement in new and emerging technologies. Among the larger states, Himachal Pradesh, with a score of 38.1, is the top performer. Tripura (58.7) and Sikkim (0.6) are the best and worst performing states respectively in the smaller states category. Delhi (49.7) is the best performing UT.
To conclude, India’s recent commitment to achieve net zero emissions by 2070 and ensure reliable and affordable power for all in the country requires each state to deliver its best performance on climate change mitigation and improve the performance of its discoms. SECI is expected to help in achieving these objectives by encouraging the states to undertake timely remedial measures to ensure sustainable and reliable power supply, and by promoting peer-to-peer learning and healthy competition among the states.
One of the challenges in benchmarking the performance of the states has been the lack of adequate data on several key variables regarding state energy sector performance and climate change mitigation initiatives. Going forward, it is important to capture such data to ensure a comprehensive and reliable assessment of the performance of the states.