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Narrative Review | Energy Engineering | Volume 15 Issue 4, April 2026 | Pages: 285 - 291 | India
Least-Cost Power Sector Transition in India to 2035: Integrating Marginal Abatement Costs, Tariff Dynamics, and Carbon Market Mechanisms
Abstract: The Energy sector in India is undergoing a massive transformation by transitioning to more cleaner resources and technology upgradation to fulfil the commitments of action required to combat the climate change and move forward to the ambitious target of Net Zero by 2070. India's Nationally Determined Contribution (NDC-2035) commits to reducing emissions intensity of GDP by 47% from 2005 levels, achieving 60% cumulative installed capacity from non-fossil sources, and creating a carbon sink of 3.5-4.0 billion tonnes CO? equivalent. This paper examines India's least-cost power sector transition under the triple constraint of reliability, carbon reduction, and affordability. Using Marginal Abatement Cost (MAC) curves, Real-Time Market (RTM) signals, and the Carbon Credit Trading Scheme (CCTS), the study demonstrates that India's pathway is not a binary coal-versus-renewables choice or coal exit, but a system optimization balancing efficiency, flexibility, and affordability. Results show that renewables and demand response dominate negative-cost abatement, coal efficiency and flexibility deliver low-cost reductions, while storage and flexibility are indispensable medium-cost enablers. RTM liquidity trends highlight flexibility scarcity, while CCTS introduces carbon costs into dispatch and investment decisions. The integrated framework ensures reliability, decarbonisation, and tariff stability, while enabling a just transition for coal-dependent states.
Keywords: Marginal Abatement Cost, Power Sector Transition, Carbon Credit Trading Scheme, DISCOM Tariffs, Renewable Energy Integration, Energy Storage, India Energy Policy
How to Cite?: Arundhati Mukherjee, "Least-Cost Power Sector Transition in India to 2035: Integrating Marginal Abatement Costs, Tariff Dynamics, and Carbon Market Mechanisms", Volume 15 Issue 4, April 2026, International Journal of Science and Research (IJSR), Pages: 285-291, https://www.ijsr.net/getabstract.php?paperid=SR26331080639, DOI: https://dx.dx.doi.org/10.21275/SR26331080639