Price Cap Impact: India's Power Costs and Emissions Surge

Aurora Energy Research reports that a ₹10/kWh price cap in India will result in ₹7 trillion more in wholesale power costs and 1% higher carbon emissions by 2060. The cap hinders renewable energy and storage deployment, affecting investor confidence and prolonging reliance on coal power.

India's energy landscape faces challenges as a ₹10/kWh cap on Day Ahead Market prices is predicted to inflate wholesale power costs by ₹7 trillion and elevate carbon emissions by 1% through 2060, according to Aurora Energy Research.

The analysis attributes these hikes to the constrained growth of onshore wind and battery energy storage technologies, as the cap restricts the deployment of cheaper renewables. Over the next 35 years, higher average power prices are anticipated, along with an additional 224 MtCO2e in emissions due to extended coal power usage.

This scenario raises concerns about investor confidence and the nation's ability to meet its decarbonization goals, with Aurora highlighting the necessity for significant investment and a stable policy environment to boost green technology adoption.