Budgeting for Net Zero

The document provides a technical framework for calculating the 'cost gap'—the marginal cost differential between clean energy technologies and their conventional benchmarks—for Battery Energy Storage Systems (BESS), offshore wind, solar PV, electric vehicles (EVs), and green hydrogen in India. It outlines the specific input parameters, learning rates, and benchmarks used for each technology. Furthermore, it describes the application of the Green Economy Model (GEM), a system dynamics tool, to simulate how varying levels of public funding (e.g., 30% or 100% of the cost gap) influence India's GDP, employment, and emissions through feedback loops involving energy spending, air pollution, and labor productivity.

• For standalone Battery Energy Storage Systems (BESS), the study identifies that cost parity with the benchmark electricity price (INR 7.30/kWh in 2023) is achieved in 2028 under the business-as-usual scenario, leading to a cost gap estimation period from 2023 to 2027.
• Offshore wind technology in India is projected to reach cost parity with its benchmark (the average price of round-the-clock electricity traded on the Indian Energy Exchange, which was INR 5.62/kWh in 2023) in 2037, with the cost gap calculated for the period 2024 to 2037.
• Solar PV is already cheaper than new coal and gas installations in India; therefore, the cost gap is calculated as the differential between domestically manufactured solar PV modules and imported modules, with parity expected around 2030 in the business-as-usual scenario.
• Green hydrogen (GH2) is estimated not to reach cost parity with grey hydrogen (benchmarked at USD 2.25/kg) until 2050 in the business-as-usual scenario, necessitating a cost gap estimation timeline from 2024 to 2050.
• The Green Economy Model (GEM) uses a system dynamics approach to quantify how government support for clean energy affects GDP by analyzing three primary drivers: energy spending (affecting capital productivity), air pollution (affecting labor productivity), and employment (affecting value added).

APA

Jain, S., Mani, S., Sharma, D., Raizada, S., Bassi, A. M., Gangopadhyay, A., Ranjan, U., Molleti, G., Khan, S., Bannerjee, B., Gajjar, J., & Pallaske, G. (2024). Budgeting for Net Zero. International Institute for Sustainable Development. https://www.iisd.org/system/files/2025-01/india-budgeting-for-net-zero-technical-note.pdf

Chicago

Jain, Saumya, Sunil Mani, Deepak Sharma, Swasti Raizada, Andrea M. Bassi, Anasuya Gangopadhyay, Upasna Ranjan, et al. Budgeting for Net Zero. International Institute for Sustainable Development, 2024. https://www.iisd.org/system/files/2025-01/india-budgeting-for-net-zero-technical-note.pdf.

Wikipedia

{{cite report |last1=Jain |first1=Saumya |last2=Mani |first2=Sunil |last3=Sharma |first3=Deepak |last4=Raizada |first4=Swasti |last5=Bassi |first5=Andrea M. |last6=Gangopadhyay |first6=Anasuya |last7=Ranjan |first7=Upasna |last8=Molleti |first8=Gautham |last9=Khan |first9=Sarah |display-authors=etal |title=Budgeting for Net Zero |publisher=International Institute for Sustainable Development |date=December 2024 |url=https://www.iisd.org/system/files/2025-01/india-budgeting-for-net-zero-technical-note.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{jain2024budgeting, author = {Jain, Saumya and Mani, Sunil and Sharma, Deepak and Raizada, Swasti and Bassi, Andrea M. and Gangopadhyay, Anasuya and Ranjan, Upasna and Molleti, Gautham and Khan, Sarah and Bannerjee, Bidisha and Gajjar, Jaymin and Pallaske, Georg}, title = {{Budgeting for Net Zero}}, institution = {International Institute for Sustainable Development}, year = {2024}, month = dec, url = {https://www.iisd.org/system/files/2025-01/india-budgeting-for-net-zero-technical-note.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }