50% green energy was the easier part. The real challenge begins now

India has hit 50% clean capacity ahead of schedule. But translating capacity into real supply, and building the system around it, is proving to be much harder

India has crossed a symbolic halfway mark in its clean energy journey. The Indian government recently announced that half of the country’s power generation now comes from non-fossil sources — a Paris Agreement target met ahead of time. In the past decade, the installed capacity of renewable energy (solar + wind + small hydro) in India has quadrupled. The country added large hydro to the calculation and breached the 200 gigawatt (GW) milestone of green energy capacity in 2024, out of the total installed capacity of 490 GW. 

The growth is indeed phenomenal. But here’s the catch. Clean energy capacity doesn’t equal clean energy supply. Renewable energy’s (RE) share in electricity supply remains sub-par when compared to its installed capacity. At the same time, major energy guzzlers, especially industries and electric mobility, remain dependent on fossil-fuel-based power. 

RE may make up more than 50% of capacity on paper, yet their actual grid supply has remained around 15-20% over the past several years. The country is backing down on solar power during low demand periods to keep its grid stable. RE project developers are watching their projects go idle because of a lack of interest from states to buy power from them. 

India’s energy transition has hit a point where adding RE capacity is no longer enough. What it needs to build, say experts, is a backbone, which includes storage, transmission, transition fuels and smarter planning. Only then can the country turn the RE surge into reliable power. 

The Base and the Bridge

India’s power grid was built around coal. Too much RE has already started straining it. Experts have repeatedly pointed to the lack of grid scale energy storage as a major deterrent to round-the-clock RE in the country. But battery energy storage solves only a part of the problem. It would make RE available during non-solar and non-wind hours, but grid level issues would remain, especially when it comes to uninterrupted supply and managing sudden demand spikes. 

India’s grid operator, Grid India, goes back to relying on coal power as soon as high demand months hit. These are also the months that coincide with high solar and wind generation, hurting RE projects when it matters the most. 

For the grid to manage 200 GW of RE now and 500 GW by the end of this decade, it requires a base power source such as coal in the same quantum and bridge fuels such as gas, hydro or pumped hydro storage to balance the irregular injection of RE. 

“In the past 5-7 years, we forgot about base load. We might keep saying coal is black or grey or not green. But let’s accept the fact that RE alone cannot meet the country’s demand,” says ICP Keshari, former secretary, union ministry of power. Keshari, who is now director general of Association of Power Producers (APP), says India would require base load in the same quantum or even more than the RE capacity being planned. “In the Indian context, base power has to come from coal until we are in a big way on nuclear,” he adds. 

Gas, say experts, can be that short-term bridge. Keshari says if Europe can call gas a ‘bridge fuel’ then why can’t India? 

Dr Debajit Palit, Centre Head, Centre for Climate Change and Energy Transition at Chintan Research Foundation (CRF) agreed. “We have to analyse how best we can meet the demand based on the current technology. I cannot wait till 2050 to meet my aspirational demand. The country’s demand is increasing, and it is important to meet that demand.” CRF is established by the Adani Group. Dr Palit is an energy policy researcher and was earlier professor at NTPC School of Business. 

“As a country we have to increase that per capita consumption. Our electricity consumption is not even within the range of other developing countries — it’s less than 1,500 kilowatt hours. In 2047, the projection is about 3,500 kilowatt hours, which is the global average right now,” Dr Palit says. As energy consumption increases, this country should not and cannot wait for some cleaner and newer technology to come in and use it, he adds. 

He also points out that gas can meet that demand while also creating infrastructure that can be used later to blend hydrogen, much like what Europe is doing. 

Transmission Troubles 

India saw its first wave of the RE boom in Rajasthan and Gujarat. But those states are now facing a problem of plenty. Nearly 60 GW of surplus projects are stuck without transmission lines. The gap between generation and transmission has returned to haunt the power sector. 

Keshari says, “Transmission was lagging when thermal power was coming up in a big way two decades ago. Now, when RE is coming in a big way, again transmission is a bottleneck.” Lack of transmission was one of the primary reasons for the Non-Performing Assets (NPA) crisis in the thermal power sector during the last decade, which left close to 40 GW of coal-based projects without any takers. “We must find a way to get more transmission in a timely and efficient manner,” he says. 

Approximately 40 transmission projects awarded in the past few years, set for commissioning in the current and next financial year, are yet to receive power connectivity approval from the Central Transmission Utility (CTU). Some others have requested extensions to their construction timelines, as there is no certainty that corresponding RE projects will finish on time.

Sector executives say project developers have repeatedly raised the issue of lack of connectivity. “Renewable energy project developers blame it on right-of-way. The transmission sector is also currently facing a a manufacturing supply chain problem,” says an industry executive. 

The Centre is slowing down RE tenders until transmission catches up, while also pursuing states to bolster their intra-state electricity supply network. 

But experts feel the deeper issue is centralised planning. States need to be given more control over their energy mix. 

“You cannot have a top-down approach where the Centre dictates what energy source needs to be promoted. The larger electricity act and the reform part of it should be taken care of by the central government, including how the regulations should work or how policy making should work. But which source of energy should be promoted, should be left to the states,” says a veteran sector observer. 

Another area, which has largely remained ignored in energy planning, but will play a significant role as demand rises to historic highs is ‘demand side management’ (DSM), say experts. DSM pertains to building precise demand projection models and managing consumption load through energy efficiency models. 

“Demand response and demand management is the one thing that is discussed very little. We are all obsessed by supply side options, renewable and nuclear etc. A lot of service can be done to the country by looking at the demand response,” says Mohit Bhargava, former CEO, NTPC Green. 

He says this model would require the most cooperation from states and it is time they are heard more in the energy planning of the country. “Every state needs a multi-pronged strategy to handle this demand management process. Give the states what they want,” says Bhargava.  

“The states today probably don’t want solar alone. Give them solar plus storage — if they want a two-hour storage or a four-hour storage or whatever suits them. If the states don’t need 50 gigawatts and they need only 10 gigawatts, let’s give them only 10 gigawatts. If the states want more wind or more FDRE [Firm and Dispatchable Renewable Energy], so be it.” 

He adds the issue of unsold PPAs is emerging because the market is not absorbing that capacity. “We keep saying we will do 50 gigawatts of bidding, but if there are no buyers for tendered RE, then we ultimately end up with 50 gigawatts not being sold at all. Why unnecessarily keep it open and block the connectivity?” he says, adding that the market going forward will be directly or indirectly affected by what the demand is (from states). This, he says, is also the reason that thermal is in demand again because states want it for supply reliability. 

Alok Kumar, former power secretary and now Director General, All India Discoms Association (AIDA), seconded the idea that states should plan their RE consumption trajectory for reaching the national target within 5-7 years. 

“A single model cannot be imposed on all states. Let the states plan because they have to set the tariff and they are the one who pay the tariff subsidy. Give them doable targets — do this much RPO [Renewable Purchase Obligation] and let them decide what is best for them, which energy mix best matches their load profile. And when we see your RE integration cost is going up beyond a point, then the Centre will support you [states],” Kumar says. RPOs are voluntary targets for states to purchase a certain share of their energy from RE sources. Although guided by the Centre, these targets are not mandatory and in most cases, several states don’t achieve it. 

Demand, data and digital tools 

India’s twin goals — 500 GW of renewable capacity by 2030 and sustainable energy access — intersect at a common fulcrum: technology, especially AI-driven tools. The power sector has long struggled with inconsistent and unreliable state-level data. This hampers short-term and long-term energy planning as well as efforts to mainstream RE. 

Over the past decade, India’s electricity market has expanded well beyond simple bilateral power trades. Rajesh K Mediratta, MD & CEO, Indian Gas Exchange and earlier at the helm of Indian Electricity Exchange — India’s largest power trading platform — acknowledged that the Indian market made so much progress that it has everything that an European or US market has. “But as far as data interchange is concerned, we have not brought Data Interchange standards,” he says. “Each grid connected entity should have an Aadhaar card like ID, which should be used everywhere. It has to be standardised in a way that all transactions, scheduling, nominations, capacity booking, deviations should be possible seamlessly,” Mediratta says. 

The Centre is now building a programme similar to the Aadhaar identification plan, wherein the digital identity of the grid would be developed. The India Energy Stack (IES), announced by the power ministry in June, aims to act as the sector’s “digital backbone”. The initiative will provide “a unified, secure, and interoperable digital infrastructure for India’s energy sector.” the press release says. The IES is to play a vital role in integrating renewable energy, enhancing efficiency of distribution companies, and delivering transparent, reliable, and future-ready power services. 

“IES could be a game changer in terms of increasing the system’s ability to make good decisions,” says Akhilesh Magal, founder, Climate Dot Foundation. “From a modeling perspective, I think data is really a goldmine. If we can get good data available to everybody in certain conditions, of course, in consistent data formats, I think it can really solve a lot of problems. For instance, APIs from every state, their electricity regulatory commissions can be synced up with CERC [Central Electricity Regulatory Commission].”. 

Emphasising that IES is a positive step in the right direction, Mediratta says, “While publishing data, we need to keep private data confidential, but aggregated information should go to the public domain for analysts and economists to make considered decisions.”

As India takes another leap in its journey of energy transition and economic transformation, it would have to be on the back of green energy, over a bridge of multiple fuel resource adequacy and anchor of technology. India’s energy landscape is getting bigger and more challenging, but it’s also creating space for fresh policy moves and investment opportunities. 

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Shreya Jai

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