India has reached a key local weather milestone 5 years forward of schedule — as of June 30, non-fossil gasoline sources account for 50.1 per cent of the nation’s put in electrical energy capability. These sources — which embody nuclear, massive hydro, and renewables — made up simply 30 per cent of put in capability in 2015 and 38 per cent in 2020, earlier than rising sharply over the past 5 years, on the again of photo voltaic and wind energy.
When the Paris Settlement on local weather change was signed in 2015, India had dedicated to reaching 40 per cent non-fossil gasoline capability by 2030. This goal was raised to 50 per cent in 2022.
As of June, India’s whole put in capability stood at 485 gigawatts (GW). Of this, renewables — together with photo voltaic, wind, small hydro, and biogas — accounted for 185 GW, based on a press launch by the Ministry of New and Renewable Power (MNRE). Giant hydro capacities contributed 49 GW, and nuclear vitality added 9 GW, taking the whole non-fossil gasoline capability simply over the midway mark. Thermal energy, principally coal- and gas-based, made up the remaining 242 GW, or 49.9 per cent. In 2015, thermal’s share was 70 per cent.
Whereas clear capability is up, thermal continues to dominate
The rise in contribution of renewables to India’s vitality combine marks a big shift, pushed by the speedy addition of photo voltaic and wind energy lately. In 2024, India ranked fourth globally in renewable put in capability, together with massive hydro, behind solely China, the US, and Brazil.
To make certain, put in thermal capability falling beneath the midway mark doesn’t imply India’s reliance on thermal energy has dipped beneath 50 per cent. Quite the opposite, since renewable sources comparable to photo voltaic and wind are intermittent and can’t generate energy across the clock, thermal crops nonetheless produce over 70 per cent of the nation’s electrical energy.
Bringing down thermal’s share in energy era — and hitting India’s 500 GW non-fossil gasoline goal by 2030 — would require way more, beginning with the stabilisation and strengthening of the grid.
Lack of energy storage capability making grid unstable
Between April 2020 and June 2025, India added 95 GW of photo voltaic and wind capability, which now makes up 35 per cent (168 GW) of the nation’s whole put in electrical energy capability. Nevertheless, this speedy progress in intermittent sources — and not using a corresponding thrust on constructing storage capability like battery programs and pumped hydro – has strained grid stability, particularly during times of fluctuating demand.
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On Could 30, 2024, as an illustration, when the 12 months’s peak demand hit 250 GW, grid managers struggled to fulfill it resulting from low renewable era and inadequate baseload assist from thermal. In Could this 12 months, erratic rains weakened demand, inflicting real-time photo voltaic costs to crash to zero, particularly on Sunday afternoons. These cases underscore the rising threat of grid instability and renewables curtailment within the absence of satisfactory storage — and dampen investor curiosity in including new capability.
Storage permits electrical energy from photo voltaic and wind crops to be absorbed when era is excessive, and launched when it’s low or when demand peaks. As of 2024-end, India’s storage capability was lower than 5 GW — 4.75 GW of pumped storage and 110 megawatts (MW) of battery storage.
Storage key focus for govt, but mission execution sluggish
The federal government has begun shifting proactively on the coverage entrance in latest months. In February, the Central Electrical energy Authority (CEA) issued an advisory to co-locate vitality storage programs with photo voltaic tasks in future tenders to make sure grid stability.
The Ministry of Energy has additionally expanded its viability hole funding (VGF) scheme for battery storage, including 30 gigawatt-hours (GWh) to the 13 GWh already beneath implementation, with a complete outlay of Rs 5,400 crore. On the pumped hydro entrance, 51 GW is predicted to come back on-line by 2032. The inter-state transmission system (ISTS) waiver for storage tasks, to spur their improvement, has additionally been prolonged till June 2028.
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Nevertheless, whereas bid costs have dropped considerably for standalone and bundled battery tasks, barely any tasks have been commissioned up to now, with the costs but to be validated. Moreover, China’s dominance over the worldwide battery provide chain poses a strategic threat — particularly in gentle of its latest export restrictions on uncommon earths and fertilisers.
In response to a July 15 notice by the Institute for Power Economics and Monetary Evaluation (IEEFA), battery storage execution has been “slower than anticipated” resulting from excessive upfront prices, import duties, and non-compliance with home content material necessities – whereas approvals for pumped hydro stay sluggish.
Transmission waiver expiry and concentrate on rooftop photo voltaic set up
The expiry of the ISTS waiver for photo voltaic and wind tasks on June 30, mixed with MNRE’s push for rooftop photo voltaic, might assist ease transmission congestion and enhance grid stability.
The ISTS waiver had enabled builders to construct tasks in high-irradiation states like Gujarat and Rajasthan and transmit electrical energy throughout the nation — usually to demand centres like Odisha or Bihar — with out bearing transmission expenses. Whereas this helped scale up capability shortly, it additionally prompted mission focus in just a few states, and led to grid congestion throughout excessive demand hours. Now, with transmission expenses reinstated, builders are prone to construct nearer to demand centres, lowering long-distance transmission and easing grid congestion.
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In the meantime, the ‘PM Surya Ghar: Muft Bijli Yojana’ for residential rooftop photo voltaic goals to decentralise era, which may additional assist to stabilise the grid. As of March, the scheme added 3 GW rooftop photo voltaic capability, and plans so as to add one other 27 GW by March 2027. Presently, India has a grid-connected rooftop photo voltaic capability of 19 GW.
Key constraints: Pending energy buy agreements, transformer provides
One other encouraging signal for grid stability is a shift within the bidding market, the place plain-vanilla tenders have fallen out of favour. Of their place, hybrid tenders — combining photo voltaic, wind, and/or storage to supply a broader era profile — are gaining traction.
On the identical time, round 30 GW of older tasks stay with out energy buy agreements (PPAs), as renewable vitality implementing companies (REIAs) battle to search out takers amongst state utilities. The federal government is working with states to get the PPAs signed. Within the meantime, tasks nearing commissioning might face short-term money movement pressures.
A remaining key pattern to be careful for is the rising pressure on the availability of high-voltage direct present (HVDC) transformers — important for transporting renewable energy over lengthy distances. With few international and home producers, and surging international demand, provide stays tight mixed with longer lead occasions.
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Builders are already dealing with grid entry points in some states, partly resulting from underinvestment in transmission infrastructure over the previous few years. If ongoing transmission tasks are delayed resulting from transformer shortages, these entry constraints might worsen, and decelerate the addition of recent capability.