PIER: Modelling India's energy system from FY2023-24 to FY2040-41

PIER 2.0: India's energy supply until 2040-41 PIER 2.0: India's energy supply until 2040-41 Prayas (Energy Group), December 2025 PIER 2.0: India's energy supply until 2040-41 Rumi & PIER 2 Feature Rumi Modelling Platform (The Code/Framework) PIER Energy Model (The Data/Application) Core Identity A generic, open-source energy systems modelling platform developed by Prayas (Energy Group) A fully functional open-source model of the Indian energy system built upon the Rumi platform Function Provides a software platform (Python/ Pyomo, demand accounting, supply optimization) that accepts inputs in pre - defined formats to describe an energy system and processes it Provides the specific detailed Excel & CSV datasets containing granular data and assumptions (e.g., demographics, efficiency standards, technology penetration, transmission network plans) required to model India's energy system Scope & Customization Generic ; users define the geographic and temporal details, energy carriers, demand sectors, technologies etc. India -specific; models regions, time, carriers etc. appropriate to India PIER (Perspectives on Indian Energy based on Rumi) is an open-source India specific energy systems model built on the Rumi open-source modelling platform. PIER •Generic, customizable open-source energy systems modelling platform •Software platform with systems specifications •India-specific model •Detailed input data/assumptions •Demand, Supply, Post-processing outputs •Open-source Other Rumibased models PIER 2.0: India's energy supply until 2040-41 Outline •PIER 2.0 supply model at a glance: Model overview and setup •Model results •Reference scenario & its variants •Other scenarios •Inter-scenario comparison •Insights / findings Not covered •Detailed methodology and inputs (available in 02_PIER-2.0-supply-detailedmodel-description.pdf) 3 PIER 2.0: India's energy supply until 2040-41 PIER 2.0 supply model overview Inputs •PIER 2.0 demand for each energy carrier at suitable granularity •Costs, production and import limits for primary and derived carriers •Costs, limits, efficiencies, legacy capacity of energy conversion technologies (e.g. power plants, refineries) and storage technologies (e.g. batteries) •Limits, costs and losses of intraand inter-geography energy transfers •Policy mandates (e.g. RPO, SPO, import dependence) & technical constraints Outputs: cost-optimal supply mix •Domestic production and import of each energy carrier in each <time, geography> unit •Capacity of each conversion, storage technology to be added in each <year, geography> •Generation/supply from each technology in each <time, geography> unit •Flow of energy carriers across geographies in each time unit 4 PIER 2.0: India's energy supply until 2040-41 Rumi 2.0 & PIER 2.0 •Major Rumi enhancement since previous version: •Ability to specify additional constraints to model policy mandates / targets or any feasible technical / operational constraints •New carriers / technologies added since previous version •Green H2 & electrolysis •Solar rooftop (in addition to ground-mounted); offshore wind; SMR; 2-hour BESS •Period: FY2024 –FY2041 •Disaggregated into 12 months (seasons) •Each month represented by one representative day •Each day represented by 24 hours => 288 time-slices per year •Geographic granularity •India divided into five regions •Regions same as officially defined regions for the electricity sector •State level granularity modelled in PIER 2.0 demand => too computationally expensive for supply optimisation 5 PIER 2.0: India's energy supply until 2040-41 Model set-up 6 Carrier Time granularity Geographic granularity Flow limitations Thermal & coking coal Annual Regional • Unlimited across regions • Rail freight cost • Imports allowed Crude & petroleum products Annual National • Unlimited within country • Indicative costs • Imports allowed for crude & many products Natural gas Annual National • Limited by likely pipeline capacity • Indicative costs • Imports allowed Electricity Day -slice Regional • Limited by likely transmission capacity • T&D costs and losses modelled • Imports allowed (Hydro from Nepal, Bhutan) PIER 2.0: India's energy supply until 2040-41 PIER 2.0 supply model scenarios •Three economy-wide scenarios modelled for PIER 2.0 supply 7 •Other scenarios and sensitivities under the Supply folder •These are described in the Supply scenario documentation •Corresponding demand-only scenarios modelled for PIER 2.0 at State granularity •1_REF_State, 2_Vikasit_State, 3_Vichalit_State Scenario Name as modelled Name(s) used in documentation Remarks Reference 4_REF Reference, Ref, REF Based on past trends and most likely future Vikasit Bharat 5_Vikasit Vikasit, Vikasit Bharat Developed India by 2047 Vichalit Bharat 6_Vichalit Vichalit, Vichalit Bharat Shaken or disturbed future PIER 2.0: India's energy supply until 2040-41 Model setup: REF scenario •Costs & limits on production + imports of coal, crude, natural gas etc. •From available data and best-guess based projections •Refineries •Costs, existing capacity, likely capacity etc. based on available data and best guesses •Electrolysis •Costs, efficiency, likely capacity etc. based on RMI –NITI Aayog report •Electricity T&D losses & costs from CEA, PFC •Projected based on past trends with some sanity checks •Electricity technology costs mostly from CEA Indian Technology Catalogue 8 PIER 2.0: India's energy supply until 2040-41 Model setup: REF scenario electricity technologies Generation Tech 2024 2030 2040 Coal 8.3 8.3 8.3 Solar GM 3.6 2.9 2.0 Solar RF 3.5 2.8 1.9 Wind Onshore 6.5 6.2 6.0 Wind Offshore 19.4 13.8 12.7 Nuclear-PWHR 11.7 11.7 11.7 Nuclear-SMR 22.1 22.1 22.1 9 Maximum GW / year 2028 - 2031 2032 - 2036 2037 - 2041 Solar Ground-mounted 40.0 44.0 48.4 Solar Rooftop 10.0 11.0 12.1 Wind Offshore 0.5 1.0 1.1 Wind Onshore 20.0 22.0 24.2 Pumped Hydro 3.9 3.9 3.9 2HR-BESS 1.4 to 9.6 10.0 10.0 4HR-BESS 1.4 to 9.6 10.0 10.0 6HR-BESS 1.4 to 9.6 10.0 10.0 Capacity addition limits Generation technology costs (2020 Rs Cr / MW) Storage costs BESS costs decrease @4.6% a year in real terms from FY27-30; then @ avg. 1.8% till 2041. PSP costs stay constant Technology 2024 lakh Rs/MW/year BESS-2Hr 45 BESS-4Hr 76 BESS-6Hr 108 Pumped Hydro 114 PIER 2.0: India's energy supply until 2040-41 Electricity supply •Peak thermal supply in FY24. Coal share 75% in FY24 ➔26% in FY41 •Solar+Wind share: 12% ➔65% 16 •Large+small hydro: 9% ➔6% •Nuclear (PHWR+SMR): 3% ➔2% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 0 500 1000 1500 2000 2500 3000 3500 4000 4500 5000 Domestic electricity supply by source (TWh) NUCLEAR-SMR NUCLEAR-PHWR SMALL-HYDRO LARGE-HYDRO WIND-OFFSHORE WIND-ONSHORE SOLAR-RF SOLAR-GM BIOMASS OCGT CCGT COAL RE share Solar+Wind Share Coal-Share 74.9% 50.9% 37.3% 26.1% 6% 20% 28% 35% 1% 6% 7% 9% 5% 13% 18% 21% 8% 7% 6% 5% 3% 2% 3% 2% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 2024 2030 2035 2041 Shares in domestic electricity supply PIER 2.0: India's energy supply until 2040-41 Electricity Supply stack 17 2024 2033 2041 •Changing role of coal in the supply mix •Prominent role of wind in May, July even by 2033 •Solar dominates daytime supply •In 2041, storage used to meet morning / evening shoulder demand •Some storage charging even in early morning in some months S02 May S04 Jul S11 Feb PIER 2.0: India's energy supply until 2040-41 Electricity flow •Western Region (WR) changes from being a net-exporter to net-importer •Eastern Region (ER) imports increase significantly •North-eastern Region (NER) becomes a net-exporter, since it becomes a conduit for imports from Bhutan •Northern Region (NR) changes from being a net-importer to a significant net-exporter due to high solar generation 18 Max intra-regional transfer (GW) Max inter-regional transfer (GW) Year Region Season DaySlice GW 2024 WR S11Feb H10 76.6 2030 WR S10Jan H11 146.0 2035 WR S01Apr H12 221.0 2041 NR S02May H12 364.8 Year From To Season DaySlice GW 2024 WR NR S02May H20 23.0 2030 WR NR S02May H12 50.9 2035 NR WR S11Feb H10 40.6 2041 NR WR S01Apr H08 60.1 -100 -50 - 50 100 -100 -50 - 50 100 ER NER NR SR WR Inter-regional transfers in FY24 (TWh) Import Export Net-transfer -250 -200 -150 -100 -50 - 50 100 150 200 250 -250 -200 -150 -100 -50 - 50 100 150 200 250 ER NER NR SR WR Inter-regional transfers in FY41 (TWh) Import Export Net-transfer PIER 2.0: India's energy supply until 2040-41 Electricity costs •ACOS marginally from FY24 to FY41: 6.76 ➔6.46 Rs/kWh •Share of fixed costs  from 37% to 46% •Share of variable costs from 28% to 10% •Cost of supply (T&D)  from 35% to 44% 19 37% 39% 42% 44% 46% 46% 45% 47% 47% 47% 48% 48% 48% 48% 48% 48% 47% 46% 28% 25% 21% 19% 17% 16% 16% 13% 13% 12% 11% 11% 10% 10% 9% 9% 9% 10% 35% 36% 37% 37% 37% 38% 39% 40% 40% 40% 41% 41% 42% 42% 43% 43% 44% 44% 6.76 6.65 6.57 6.58 6.61 6.57 6.59 6.45 6.42 6.42 6.44 6.43 6.42 6.40 6.37 6.37 6.34 6.46 0.00 1.00 2.00 3.00 4.00 5.00 6.00 7.00 8.00 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 Components of electricity cost and unit electricity cost (Rs/kWh - right axis) Fixed-cost share Fuel-cost Share T&D share ACOS (Rs/kWh) PIER 2.0: India's energy supply until 2040-41 Electricity costs in total energy costs •Share of electricity in energy cost > share of electricity in end-use demand •But ratio of per-unit electricity cost to non-electricity  from ~2 to ~1.8 over the years 20 - 0.50 1.00 1.50 2.00 2.50 0% 10% 20% 30% 40% 50% 60% 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 Relative share of electricity in cost and demand Elec cost share Elec Demand share Elec / non-elec ratio PIER 2.0: India's energy supply until 2040-41 Green Hydrogen •Most demand and supply from WR •NR produces more than its demand and supplies to other regions, again due to large solar potential 21 - 1.00 2.00 3.00 4.00 5.00 6.00 7.00 Green Hydrogen demand (MT) WR SR NR NER ER - 1.00 2.00 3.00 4.00 5.00 6.00 7.00 Green Hydrogen supply (MT) WR SR NR NER ER 0 50 100 150 200 Electrolyser capacity (GW) WR SR NR NER ER PIER 2.0: India's energy supply until 2040-41 Electrolyser operation (select months) •Since no Green H2 storage costs are modelled, gradual shift to mostly day-time use by 2041 •~170 GW electrolyser in Mar 2041 –out of ~1000 GW mid-day peak supply 22 0 5 10 15 20 25 H00 H02 H04 H06 H08 H10 H12 H14 H16 H18 H20 H22 GW Electrolyser use (2030) S03Jun S06Sep S09Dec S12Mar 0 20 40 60 80 100 120 140 160 180 H00 H02 H04 H06 H08 H10 H12 H14 H16 H18 H20 H22 GW Electrolyser use (2041) S03Jun S06Sep S09Dec S12Mar PIER 2.0: India's energy supply until 2040-41 Reference scenario gross GHG emissions •Energy and industrial gross GHG emissions increase from 3.35 GtCO2e in 2024 to 4.10 GtCO2e in 2041 in the reference scenario: CAGR of just 1.2% •As expected, coal (thermal and coking) contributes the most, though its share declines from 68% in 2024 to 65% in 2041 23 - 0.50 1.00 1.50 2.00 2.50 3.00 3.50 4.00 4.50 2024 2030 2035 2041 GtCO2e emissions by energy carrier in the Reference scenario Non-Energy THERMAL_COAL PP_OTHER PETCOKE NATGAS MS LPG HSD CRUDE COKING_COAL BIOMASS_WASTE BIOMASS BIOGAS ATF PIER 2.0: India's energy supply until 2040-41 24 Variants of the REF scenario: need/impact of policy mandates PIER 2.0: India's energy supply until 2040-41 Scenarios in PIER 2.0 Supply at a glance 25 Scenario-name Specific Constraints Remarks RPO SPO Max RE Cap # 4_REF (Reference) Yes Yes Yes Reference scenario 5_Vikasit Yes Yes Yes Different energy demand to be met in each (refer demand documentation). Various specific supplyside assumptions differ from 4_REF (refer supply scenario -documentation) 6_Vichalit Yes Yes Yes 7_REF_noRPOSPO (Partially unconstrained Reference ) No No Yes Same as 4_REF except for the difference in constraints 8_REF_Unconstr (Fully unconstrained Reference ) No No No •7_ and 8_ are the variants of 4_ and are modelled to study the need/impact of policy mandates •These variants are useful to understand implications of imposing policy constraints and to understand “what is possible” in the absence of even feasibility constraints # refers to the limits to annual capacity addition of RE technologies based on feasibility PIER 2.0: India's energy supply until 2040-41 Impact of SPO constraints •SPO targets not met in least-cost pathway even if (only) RPO targets are imposed •Storage discharge only 1.4% in 2030 (target 4%), 0.8% in 2035 (target 6%) and 6.6% in 2041 (target 7.8%) •But comes close to meeting target by 2041 32 2030 RE capacity (GW) Storage capacity (GW) RPO+SPO 575.8 41 Only RPO 575.8 25 2041 RE capacity (GW) Storage capacity (GW) RPO+SPO 1,468 203 Only RPO 1,462 190 4.0% 4.4% 4.8% 5.2% 5.6% 6.0% 6.3% 6.6% 6.9% 7.2% 7.5% 7.8% 0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% 7.0% 8.0% 9.0% 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 StorDischarge % 4_REF 7_REF_NoRPOSPO 8_REF_Unconstr Sens06_noSPO_4 SPO target These results need to be interpreted with the caveat that the real value of storage may not be discovered in a model such as PIER that operates at a coarser granularity both temporally and geographically PIER 2.0: India's energy supply until 2040-41 Reference scenario insights RPO targets not met in the least-cost pathway with realistic constraints on RE capacity addition •Electricity costlier by ₹0.32/kWh (5%) in 2041 to meet RPO •Results in ~260 MT more thermal coal demand in 2041 if RPO targets not imposed •Leads to 4.12 GtCO2e lower cumulative GHG emissions (between 2024 to 2041) •Suggests that RPO adherence needs policy-regulatory oversight and can lead to reduced GHG emissions at a modest cost Compliance nearly achieved if higher RE capacities can be added per year and technology-specific targets are not prescribed •This brings costs, thermal coal demand and GHG emissions closer to imposing RPO targets •Wind capacity addition has greater value to the system compared to solar •Suggests that higher pace of RE capacity addition –particularly wind –can help bring down RPO compliance costs SPO targets not required to meet RPO Import dependence and capacity targets are met in the cost-optimal mix without explicit constraints •No import dependence of thermal coal from 2027 •450 GW of RE-based generating capacity & at least 50% of non-fossil fuel capacity are achieved by 2030 33 PIER 2.0: India's energy supply until 2040-41 34 ‘Vikasit Bharat’ & ‘Vichalit Bharat’ Scenarios PIER 2.0: India's energy supply until 2040-41 Scenarios in PIER 2.0 model Reference (REF) •Based on past trends, known targets and likely changes Vikasit Bharat •Assuming significant improvement in incomes by 2047 •Greater Economic growth than Reference •Significantly higher energy service demand than REF •Accompanied by efficient and effective policies •Adoption of sustainable lifestyles •Increased electrification & investments in newer technologies •Higher domestic production & lower imports for coal •Higher max cap for RE, hydro & nuclear electricity generating as well as all storage technologies •Faster fixed cost reduction for BESS storage compared to REF •RPO & SPO targets higher than REF Vichalit Bharat • A ‘shaken’ or ‘disturbed’ future •Slower economic growth and than Reference •Significantly lower energy service demand than Reference •Less effective policies and governance •Less sustainable lifestyles •Lower investments in new technologies •Lower domestic production & higher imports for coal •Max cap same as REF for all electricity technologies. Lower max cap for storage technologies •Cost reduction for BESS same as REF •RPO & SPO targets lower than REF 35 PIER 2.0: India's energy supply until 2040-41 Differences in Demand -20% -10% 0% 10% 20% 30% Total Energy Demand Passenger-Kms Tonne-Kms # of Air-conditioners Steel Production Cement Production Aluminum Production % difference in energy service demand in FY41 wrt the Reference scenario Vikasit Vichalit 36 -15.0% -10.0% -5.0% 0.0% 5.0% 10.0% 15.0% 20.0% Others Transport Residential Agriculture Industry % difference in energy demand in FY41 wrt the Reference scenario Vikasit Vichalit •Total energy demand varies +/- 10%, with differences in service components across sectors shown above PIER 2.0: India's energy supply until 2040-41 Inter-scenario comparison: End use demand versus Primary Supply 37 •Losses between primary energy supply and end-use demand drop over the years across scenarios •Better investment in networks, and adoption of more efficient / renewable technologies leads to losses being the lowest in Vikasit in FY41 0% 5% 10% 15% 20% 25% 30% 35% - 10.0 20.0 30.0 40.0 50.0 60.0 2024 2041 % loss EJ Reference EndUseDemand "Losses" % loss 0% 5% 10% 15% 20% 25% 30% 35% - 10.0 20.0 30.0 40.0 50.0 60.0 2024 2041 % loss EJ Vikasit EndUseDemand "Losses" % loss 0% 5% 10% 15% 20% 25% 30% 35% - 10.0 20.0 30.0 40.0 50.0 60.0 2024 2041 % loss EJ Vichalit EndUseDemand "Losses" % loss PIER 2.0: India's energy supply until 2040-41 Inter-scenario comparison: energy import bill to economy -20% -15% -10% -5% 0% 5% 10% 15% TPES Total Supply: Crude Total Supply: THERMAL COAL Total Supply: All Electricity Total Supply: RE Electricity % difference in FY41 wrt the Reference scenario Vikasit Vichalit 38 •Vikasit provides for much higher RE-based electricity, and lower Crude import •Consequently, the energy import bill, which is dominated by Crude imports is significantly lesser in the Vikasit scenario •Vikasit meets higher demand with lower emissions at comparable cost 10.0 11.0 12.0 13.0 14.0 15.0 16.0 17.0 18.0 2024 2030 2035 2041 Energy Import Bill : Rs Lakh Crores REF Vikasit Vichalit PIER 2.0: India's energy supply until 2040-41 Inter-scenario comparison: Electricity Capacity and Storage 39 •Given the lower RPO targets in Vichalit and since solar and wind capacity addition maxes out, 3 GW of additional coal and 2.4 GW of additional nuclear are added in the last 4 years in lieu of biomass (of which 6 GW is added in the last six years in REF) 75% 26% 20% 31% 7% 44% 48% 41% 5% 21% 24% 19% 9% 6% 6% 6% 5% 2% 1% 3% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 2024 REF 2041 2041 2041 Generation shares accross scenarios COAL SOLAR WIND HYDRO Rest REF Vikasit Vichalit -24% -16% -8% 0% 8% 16% 24% STORAGE Rest of generation tech HYDRO WIND SOLAR COAL % difference in FY41 wrt Reference scenario (Electricity generation and Storage Technology Capacity) Vichalit Vikasit PIER 2.0: India's energy supply until 2040-41 40 Insights and Takeaways PIER 2.0: India's energy supply until 2040-41 Conclusions: non-electricity •Thermal coal import dependence can reduce to zero with a shift to renewables in electricity generation and increased domestic production •While India proceeds to adopt renewables at scale by 2041, coal continues to supply ~47% of the country's primary energy (43% in Vikasit, 49% in Vikasit) •Greater focus on efficiency of energy demand and supply (Vikasit scenario) enables provision of higher energy demand with lower emissions at comparable cost •Transport electrification and increased import dependence for LPG and PetCoke leads to Crude supply peaking in around mid-2030s 41