Overview

This working paper examines Rajasthan's renewable energy transition through the lens of its primary state generation utility, Rajasthan Rajya Vidyut Utpadan Nigam Limited (RVUNL). With Rajasthan holding about 20.3% of India's renewable energy potential and targeting 90 GW of RE capacity by 2029-30 under its RE Policy 2023, the state is positioned as a critical contributor to the national 500 GW goal. The paper analyses RVUNL's pathway from a coal-dominant generation portfolio (over 90% coal) to a greener mix through three transition scenarios, assessing investment requirements, job impacts, financing options, and institutional calibration needed at the state-utility level.

Key Highlights

• Three transition scenarios offer distinct pathways. The Business as Usual (BAU) scenario adds 810 MW solar and 2,245 MW coal capacity with limited retirements. Redirecting Capital for Accelerated Transition (RCAT) adds 4,842 MW solar with no new coal and retires assets past 30 years. Accelerated De-carbonisation (AD) adds 9,330 MW solar, shelves new coal, and retires plants at 25 years.
  
  
• Investment requirements range from INR 25,817 Cr to INR 50,475 Cr by 2030. The AD scenario requires the largest capital outlay, with about INR 37,881 Cr for solar generation, INR 3,457 Cr for battery storage, and INR 9,137 Cr for transmission infrastructure.
  
  
• Aggressive decarbonisation more than doubles jobs. Total employment rises from 19,097 to 39,275 by 2030 under the AD scenario, driven by solar capacity addition and Maintenance, Repair and Overhaul services. The BAU scenario projects a net job decrease, while RCAT shows marginal growth.
  
  
• Greening RVUNL's portfolio supports RPO compliance. Rajasthan achieved only 18.3% RPO compliance against the FY2022-23 target of 24.61%. Integrating solar into RVUNL's portfolio would help state DISCOMs meet the mandated 43.33% RPO target by 2030.
  
  
• Replacing coal with solar yields significant fuel cost savings. A case study at Suratgarh Thermal Power Station indicates that switching to solar could reduce coal consumption by about 10.43 lakh tonnes per year, saving around INR 557 Cr annually in fuel costs.
  
  
• Diverse financing instruments are available. Direct investment, project finance, green bonds (India raised about INR 16,000 Cr through sovereign green bonds in FY24), tax credits, public-private partnerships, asset monetisation through Solar Investment Trusts, and patient capital from foreign lenders and sovereign funds offer complementary routes. Multilateral Development Banks and Development Finance Institutions can lower capital costs through blended finance, technical assistance, and capacity building.
  
  
• ADB's USD 800 million Rajasthan Renewable Energy Transmission Investment Program is already supporting transmission infrastructure development to channel wind and solar power from sites in Akal, Bhadla, Bikaner, and Ramgarh to state and national grids.
  
  
• Institutional calibration requires a State-Level Steering Committee for Energy Transition. Building on the Ministry of Power's directive, the committee should integrate Finance, Environment, Planning, Labour, Energy, Industries, Social Justice, Power/New & Renewable Energy, Housing & Urban Affairs, and Rural Development departments, with the Planning Secretary as convener to coordinate technical, developmental, and analytical aspects.
  
  

A just transition strategy must address vulnerable communities. Mapping layers of vulnerability across natural resources, industrial activity, habitation, connectivity, labour skills, and climate is essential to manage socio-economic disruption from the shift away from coal-based generation, supported by independent institutional structures and capacity at the state department level.