Renewables and Reality
In May 2025, India announced it has raised its renewables target of 500 gigawatts (GW) by 2030 to 900 GW. The Indian government claimed it is on track with 475 GW of installed renewables capacity in 2025, making it the world’s third-largest producer of wind and solar energy.
India’s Nationally Determined Contribution calls for 50% of the country’s energy requirements stemming from non-fossil fuels by 2030.
This where the narrative gets complex. Renewables are underutilized. Actual renewables power generation capacity is not reflected in the country’s power market share.
With many unsigned clean energy contracts, and a pipeline for many new renewables initiatives, between April 2024 and April 2025, only 30 GW of clean energy was installed, and coal still generated more than 75% of total output.
Energy Demand
Forecasts are such that India’s energy consumption will quadruple by 2047.
India’s power supply has increased 6% over the past decade while demand rose 5.6%. This looks good, but this doesn’t consider dreadful heat waves caused by climate change.
Ultra extreme heat waves translating into high demand for electricity, especially for air-conditioning, can account for 50% of a household’s energy needs,
For India at-large, peak demand occurred at 250 GW in May 2024, an increase of 46 GW from the previous year. This trend suggests energy demand could increase 50 to 80 GW by 2027. Despite India’s 2027 new capacity plan for 100 GW of renewables 28 GW of thermal and 13 GW of hydroelectric, this would still leave 20-40 GW of power shortages or about 8-12% as of 2026.
The good news is that solar costs are going down, so much, as to compete with coal.
Too, while thermal and hydroelectric plants have construction timelines of 5-8 years, solar projects can be completed in 1-2 years.
Coal remains on top of the power pyramid
In 2024, India’s power from coal and lignite thermal plants rose 5%, hitting a record of 1,357 billion kWh, up from 1,293 kWh in 2023.
Coal represents 79% of power sources and a 42% increase in coal production is planned for next 5 years. The goal is to raise coal-fired power supply by 80 GW by FY 2031-32.
India has the second largest coal-fired fleet in the world at 240 GW of installed capacity. In 2024, 100 GW of new coal-fired generation had been proposed or was under construction.
Fossil fuels has accounted for two-thirds of power capacity expansion.
Industry’s coal stakeholders reflect mixed signals.
Tata Power, India’s largest private power producer, had announced in 2021 that it would not be building any new coal plants.
In 2025, Tata divulged the construction of its first coal plant project in 6 years, since acquiring Prayagraj Power Generation Co Ltd (PPGCL) in 2019 through a joint venture.
Adani, one of the largest coal producers in India, in 2020, was a new player in the Indian solar market with the creation of Adani Green Energy Limited (AGEL). AGEL aimed to have 25 GW of installed renewable energy by 2025.
In 2025, Adani power secured a $2 billion contract from the state-run Uttar Pradesh Power Corporation Ltd. for a 1,5 GW for a supper ultracritical coal power plant Utter Pradesh estimated it will require 11 GW of thermal power by 2033-34.
Compounding the coal challenges, India is the world’s second largest producer of steel and the industry uses coal for steelmaking. The steel sector relies on imports for its coking coal requirements. Australian exports represented 53% of Indian coking coal supplies.
Though India has the fifth largest coal reserves in the world, it has to import coal to meet its needs!
Coal generation is projected to substantially increase until 2030 even if its share of installed capacity declines over this period.
India’s economy is expanding quickly while domestic coal is abundant and cheap, including low upfront costs. India is the second-biggest coal consumer, behind China.
India relies on coal to improve the living standards of its population.
Renewables Capacity and market share not the same
India is the third largest generator of solar power with more than 100 GW of capacity, behind China, the U.S. This is quite the leap from 2014 when India only had 2.82 GW of solar capacity.
With solar prices continuing to decline, solar may appear to be taking on coal dominance in India, with a 100.33 GW of new capacity for FY 2024-25, up from 66.78 GW in FY 2022-23.
In the 2025 solar pipeline comprised 84 GW is under construction and 47.5 GW is out for tendering. Between 2018 and 2024, India added 113 GW of new power capacity, more than two-thirds from renewables, 88 GW, mostly solar coming in at 77 GW.
Why is it that between April 2024 and April 2025, 30 GW of clean energy was installed, but coal still generated more than three-quarters of total output.
Renewables use expansion is colossally impeded because India’s renewable energy sector has been experiencing many hurdles in 2025, including weak demand for tenders;land acquisition issues for projects; power agreement delays; grid integration complexities; minimal energy storage capacity; and project cancellations.
Especially noteworthy, the cost of capital for grid-scale renewable energy in India is 80% higher than in advanced economies, though low compared to emerging and developing economies. The latter impacts on real and perceived risks for projects.
If matters would be going according to the national government’s plan, coal would represent 55% of India’s power market by 2030. But will this be the case?
Renewables haven’t replaced coal, rather it has supplemented the power supply to keep pace with increasing electricity demand.
True, wind has progressed slowly, now representing 10.3% of the country’s capacity.
India is trying to incentivize solar tech manufacturing with its National Manufacturing Mission introduced in 2023. The program has supported 48 GW of module manufacturing capacity.
One of the incentive success stories on solar tech domestic manufacturing is that of Tata Power’ s subsidiary, TP Solar. TP Solar has a 4.3-GW solar cell and module manufacturing facility in the state of Tamil Nadu in southeast India. This is the largest such facility in India.
Another beneficiary of the national program is Jupiter Renewables with a $231 million cell and module plants with production capacities of 4.2 GW and 3.6 GW respectively.
Most of the new projects planned support rural economic growth including job creation.
Energy Storage
India is barely implementing energy storage policies, energy storage being a nascent solution at this point.
Shortfalls can be avoided in the immediate future should India install and utilize 50 GW of new solar capacity with 15-30 GW of energy storage.
Unfortunately, only 4.86 GW of energy storage capacity was in place in India in December 2024.
India obviously needs to put its weight behind standalone energy storage systems. (SESS)
Accordingly India put out 11 tenders for 6.1 GW of SESS in Q1 2025. This capacity surpassed energy storage tenders in 2024. An incentive in the form of Viability Gap Funding (VGF) offers 30% support for standalone battery ESS capital expenditures.
Persistent execution and commercial bottlenecks have sabotaged the tenders and new funding. Delays and cancellations of power sale and storage agreements, often associated with falling battery prices, are major obstructions.
Other barriers are inadequate battery supply chains, manufacturing and financing. Battery cell manufacturing capacity is limited and depends on imported lithium and cobalt. Refining and commercialization timelines and affordable financing constitute further roadblocks.
No wonder, awarded capacity of 6.4 GW had been cancelled.
With both solar and storage costs declining rapidly, moving quickly on combined solar and energy storage capacity is the rationale option.
While battery manufacturing and supply chains in India manufacturing leaves much to be desired, global battery manufacturing overcapacity will keep battery energy storage system (BESS) prices low until 2030. More than enough low-cost BESS are on the market to meet India’s immediate needs.
Energy storage capacity in India in December 2024 was merely 4.86 GW. For 500 GW of renewables capacity, India would require 364 GW of solar and 121 GW of wind, necessitating 73.93 GW/411.4 GWh of storage capacity.
India’s Ministry of Power issued energy storage guidelines which will be mandatory for future solar projects, but does not apply to existing solar installations. This advisory applies to all power distribution companies and renewable energy implementing agencies (REIAs) to have a minimum of 2-hour located energy storage systems equivalent to 10% of solar capacity installed for all future projects. The intention is to both address intermittence from solar sources plus electricity prices to ensure reliability of grid supply and reduce dependence on peak hour sources.
Distribution licences would include storage capacity guidelines for rooftop solar as well.
The takeaway
Should India be able to align renewables capacity targets with power market share, this would be a good news story.
Multiple bureaucratic, project and private sector cognitive dissonance impede renewables from having impacts such that coal would no longer occupy over 75% of power output.
Renewables have not replaced coal, rather it has contributed to the extraordinary additional power India requires for its needs.
These challenges are compounded by failure to beef up energy storage capacity to maximize the delivery of power from intermittent renewable energy sources.
Too many problems to solve, the renewables political hype doesn’t deliver.
Should India miraculously overcome the obstacles for a green transition, the country would concurrently become energy self-sufficient and tackle climate change.
That India is in second place as a global leader in solar power installed capacity is obviously insufficient.
