Macroeconomic Importance of Coal and Renewable Energy in India

CONTEXT

In India, fossil fuels account for over 80% of the total energy mix, with coal being the single largest energy source. As the country strives to achieve its net-zero emissions goal by 2070, shifting from coal to renewable energy (RE) presents both opportunities and challenges. CEEW proposes to conduct a study, to evaluate the macroeconomic importance of coal and analyze the impacts of increased investments in both coal and renewable energy. The proposal is to work with a consultant who is an expert in using the Computable General Equilibrium (CGE) framework and tailoring the assessment to incorporate specifics and details of India’s power sector. The study aims to provide evidence-based insights into the future of India’s energy sector, considering multiple policy scenarios of coal-to-renewable transition.

To achieve the objectives mentioned above, CEEW is inviting bids from economic modelling firms/ research institutions (hereinafter referred to as “Service Providers”) with sufficient experience and credentials in performing CGE modelling.

SCOPE OF WORK

• Preparation of baseline: The baseline should involve the Input-Output (IO) table and Social Accounting Matrix (SAM) for 2023. This will require using and updating the latest available Supply-Use tables for India (preferably 2019-20). Using this data, we require an assessment of the current level of dependencies (direct, indirect, and induced) created by coal and RE in Maharashtra, Odisha, and India. These should include their contributions to gross domestic product, trade, labour income, employment, household income, and public revenues.
• Scenario-based CGE analysis: Using CGE, we require simulations of the impact of varying levels of investments in coal and RE on the economy of Maharashtra, Odisha and India by 2030. Each simulation should evaluate these impacts across the following parameters:
  • Sector-specific outputs.
  • Import of coal and RE.
  • Labour income across various occupations.
  • Household income across the distribution.
  • Employment in different sectors.
  • Environmental impacts (Co2 emissions, air pollution, and land degradation).
  • Public revenues and subsidies to coal and RE 
• Policy recommendations: The key outcome of this study will be the recommendations for policymakers on balancing coal and RE investments while minimising economic disruptions and maximising environmental benefits. Additionally,  the service provider will work with the CEEW team to derive insights on the impact of reducing RE import dependencies on domestic manufacturing and employment opportunities.
• Sessions on knowledge transfer: To enable an effective understanding of the model's limitations, CEEW requires the consultant to conduct knowledge transfer sessions on the theoretical foundations of CGE and hands-on training on the specific model used for the analysis.

Please note that each of the above activities needs to be documented in detail and shared with CEEW at appropriate intervals.

DELIVERABLES AND TIMELINES

The service provider will be required to submit the following deliverables with expected timelines:

Please Note:

• Support from the service provider will be required at each stage, and the provider will be responsible for rectifying/clarifying any errors (or doubts) that may arise throughout the project.
• The service provider will get all the data and contents approved from CEEW before using them in the model.

We seek a detailed proposal and quotation by 11:59 p.m. on 10 Dec 2024, at the following emails: karthik.ganesan@ceew.in and tarun.mehta@ceew.in  

CONTENTS OF PROPOSAL

• Company profile – Brief on the company, CVs, past experiences and projects.
• Budget – A detailed breakup of the budget for completing the project, including training, logistics, personnel, administrative and any other costs involved.

EVALUATION CRITERIA

The service provider will be evaluated based on the following criteria:

• Using a multi-region framework to include Maharashtra and Odisha
• Using an open-economy CGE model to incorporate the impact of trade and investment flows with the rest of the world.
• Providing detailed disaggregation for the labour and household sector.
• Accurate and detailed reflection of the energy sector in the model.
• Using the latest data sources as inputs to the model.
• Experience in carrying out CGE modelling on at least 5 occasions.
• Ability to complete the project within the proposed timelines.
• References from previous clients.

INTELLECTUAL PROPERTY

All intellectual property rights related to the baseline and model results created for this project will belong to CEEW.

CONFIDENTIALITY

The service provider will be required to maintain confidentiality regarding all information and data related to the project.

CONTRACT

The contract will be awarded based on a competitive bidding process. CEEW reserves the right to reject any or all proposals without assigning any reason whatsoever. Upon the successful award of the project, the service provider will be required to sign a contract with CEEW.