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A Comprehensive Study on Transition and Impact of Green Electricity in India

Article in International Journal For Multidisciplinary Research · April 2025

DOI: 10.36948/ijfmr.2025.v07i02.42838

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 International Journal for Multidisciplinary Research (IJFMR)
E-ISSN: 2582-2160 ● Website: www.ijfmr.com ● Email: [email protected]

A Comprehensive Study on Transition and

Impact of Green Electricity in India
Mr. Sandeep Shankarrao Kulkarni1, Mr. Parvez Ahmed Shaikh2
1
Head, Dept of Environmental Studies, K. J. Somaiya College of Arts & Commerce, Mumbai, India
2
Business Consultant, Tech Mahindra Limited, Mumbai

ABSTRACT
Fossil fuel-based power plants generate about 60% of global electricity and over 40% of carbon dioxide
emissions. India mirrors this trend, with 56% of its electricity sourced from fossil fuels, making it the
third-largest emitter of greenhouse gases after China and the United States. In response to climate
change, global warming, and resource depletion, India has committed to transitioning toward renewable
energy. At COP26 in Glasgow, under the “Panch Amrit” framework, India pledged to achieve 500 GW
of non-fossil fuel capacity and meet 50% of its energy needs from renewables by 2030—building on
earlier COP21 commitments, including a 40% non-fossil energy target, which was surpassed by 2022.
This study evaluates the current adoption of green electricity sources in India—solar, wind,
hydroelectric, and biomass—and assesses projected capacities through 2030. It investigates
opportunities and challenges in achieving India’s 2030 renewable targets and its long-term goal of net-
zero emissions by 2070. Using secondary data from the Ministry of Power and the Ministry of New and
Renewable Energy (2013–2023), the research applies qualitative and quantitative analyses, including
trend assessments with Excel and SPSS.
The findings highlight positive momentum, supported by progressive policies and declining renewable
energy costs. However, challenges such as renewable energy intermittency, grid flexibility, and the need
for large-scale energy storage remain significant. Despite these hurdles, the study concludes that India’s
decarbonization targets are realistic, provided there is sustained policy support, infrastructure
development, and technological innovation. Overall, the research offers key insights into India’s energy
transition aligned with global climate objectives.

Keywords: Green electricity, Renewable energy, Fossil fuels, Climate change, Global warming, Net-
zero emissions, COP26, Paris Agreement, Panch Amrit, Nationally Determined Contributions (NDCs),
Ministry of Power, Ministry of New and Renewable Energy (MNRE)

1. Introduction
Globally, almost 60% of electricity comes from fossil fuel-based power plants that burn fossil fuels like coal
and natural gas to produce electricity. These non-renewable energy sources are generally expensive,
exhaustible, polluting, and insecure because of their uneven distribution and account for over 40% of CO₂
emissions. In India, 56% of electricity comes from fossil fuel-based power plants (Ministry of Power),
and India is the third-largest producer of GHGs after the United States and China. Thus, there is a growing
need to transition from fossil fuel-based to renewable and sustainable energy sources as the world faces
global warming, climate change, and the depletion of non-renewable resources. Electricity produced from

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renewable sources, such as water, wind, solar, biomass, and small hydroelectric sources, with a much lower
environmental impact, is called green electricity.
India’s New 2030 Decarbonization Targets:
India has been a pioneer in the fight against climate change and is committed to completing the switch to
clean energy. The Indian Prime Minister unveiled Panch Amrit, or "The Gift of Five Elixirs," the five
nectar ingredients, during COP26 in Glasgow. The following five goals are to be accomplished by 2030:
1. India will reach its non-fossil energy capacity of 500 GW by 2030.
2. India will meet 50% of its energy requirements with renewable energy by 2030.
3. India will reduce total projected carbon emissions by one billion tonnes by 2030.
4. India will reduce its carbon intensity by less than 45% by 2030.
5. India aims to reach net zero by the year 2070.
When India announced its Nationally Determined Contributions (NDCs) at COP21 in 2015 in Paris, it
made a historic commitment in 2015 to install 175 gigawatts (GW) of renewable energy by 2022 and
expand its non-fossil fuel power production capacity to 40% by 2030, which marked a turning point in
the country's low-carbon transition. As of April 2022, India had 165 GW of total non-fossil fuel capacity,
including nuclear. It equals 41% of the 401 GW installed power capacity (MNRE, 2022). By 2030, the
goal of having 40% of electricity capacity come from non-fossil fuels has already been met. India is
expected to surpass its NDC obligations well before 2030, having already achieved a 28% decrease in
emissions above 2005. India's aspirations for the climate have grown significantly between Paris
(COP21) and Glasgow (COP26). The figure below shows India's commitments at COP21 and COP26.

Figure 1. India’s commitment to Climate Action at COP21 and COP26 (pib.gov.in/PRID=1795071)

Massive, in-depth decarbonization initiatives would be required to meet these aggressive targets. India
would need to install an extra 340 GW of non-fossil fuel energy capacity this decade to meet its new

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2030 targets. Over the past seven years, India has experienced the greatest growth rate in the addition of
renewable energy capacity among the major economies. India will need to increase its renewable energy
capacity by 40–43 GW annually on average. Glasgow's announcements of 500 GW of non-fossil fuel
energy could be achieved, according to Central Electricity Authority (CEA) projections, by roughly
combining 435 GW from wind, solar, and other RE sources; 61 GW from large hydro; and 19 GW from
nuclear energy capacity (CEA, 2020). Reaching 500 GW of non-fossil fuel capacity and 50% Renewable
energy generation is both doable and inexpensive, but it would be exceedingly difficult to reach these
goals. The main challenges will be increasing the flexibility of the generating resources and deploying
large-scale energy storage capacity. These are necessary to guarantee the grid's seamless operation,
maximize the renewable energy (RE) capacity, and ensure high reliability around the clock. In addition
to facilitating this shift, a stronger emphasis on expanding decentralized power from renewable sources
would prove more economical. The percentage of renewable energy in electricity generation would rise
quickly from about 10%, posing new operational issues. Renewables only generate electricity when the
sun shines and the wind blows, which is variable and intermittent. It needs to be fully utilized, and at the
same time, the grid has to be stable, with the supply meeting demand continuously. Globally, there is a
growing understanding of how to run power systems efficiently while keeping in mind the security and
stability of the grid and integrated resource planning for power with a higher share of renewables. India
should be able to use the knowledge and adapt it to handle the transition smoothly. This project aims to
study the current level of adoption of various green electricity sources in India, such as solar, wind,
water, and biomass, while considering future green electricity plant capacities. It also aims to assess
opportunities and challenges in achieving India's interim target of 50% of its energy requirement from
renewable energy by 2030, considering the latest trends, developments, and policy outlook given the
latest proposed Nationally Determined Contribution (NDCs) for the Paris Agreement.
Background of the study: India ratified the 2030 Agenda during the United Nations Summit held in
September 2015 to limit global warming to no more than 1.5°C—known as the Paris Agreement—
greenhouse gas (GHG) emissions to be reduced by 45% by 2030 and brought to net zero by 2050. The
literature review highlights previous studies and analyses on renewable energy sources in India, like
solar, wind, water, and biomass, as well as their CO2 reduction potential over the past decade, and
extrapolates them to 2030 and 2050. As we approach 2025, recent trends and deviations necessitate a
more relevant and detailed analysis of the latest developments and policies to provide valuable insights
into more efficient adoption of green electricity for India's 2050 net zero target. This study delves deeper
and focuses on the current level of adoption of various green electricity sources in India, such as solar,
wind, and water, including upcoming green power plant capacities. It also considers opportunities and
challenges in achieving India's 2050 Net Zero target, including India's latest proposed Nationally
Determined Contributions (NDCs) and policy scenarios for the Paris Agreement.
Problem Statement: This study uses secondary data from the Ministry of Power and the Ministry of
New & Renewable Energy from 2013-14 to 2022-23 for various green electricity sources in India, such
as solar, wind, water, and biomass. The study conducted both qualitative and quantitative analyses of the
green electricity mix in India from 2015 to 2023. The study also conducted statistical analysis using
Microsoft Excel or the Statistical Package for the Social Sciences (SPSS) software to identify trends,
patterns, and correlations. The aim was to gain insights into the current level of adoption of various
green electricity sources in India. Furthermore, we will extrapolate this data to 2030, taking into account
the most recent trends, the capacities that are planned or under construction, and the policy outlook in

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light of the recently proposed Nationally Determined Contributions (NDCs) for the Paris Agreement.
Research Objectives
1. To assess the current level of adoption of various green electricity sources in India, such as solar, wind,
water, and biomass, consider upcoming green electricity plant capacities.
2. The aim is to assess opportunities and challenges in achieving India's 2050 Net Zero target, taking into
account the latest trends, developments, policy scenarios, and Nationally Determined Contributions
(NDCs) for the Paris Agreement.
Literature Review: A study by Jacobson (2020) depicts an over 49% reduction of the projected 2050 end-
use load for Indian metros—Delhi and Mumbai—through wind, water, and solar renewable energy. A
study by Ram et al. (2022) looks at how the power, heat, and transportation sectors can switch to 100%
renewable energy by 2050 under the best policy conditions and shows that Delhi could cut its energy use
by nearly 50% just by using photovoltaic (PV) by that year.
The literature review highlights previous studies and analyses on renewable energy sources in India, such
as solar, wind, water, and biomass, their CO2 reduction potential over the past decades, and extrapolates
them to 2030 and 2050. However, as we approach 2025, recent changes and differences in data require a
closer look at the latest developments and new green power plants that could help us understand how
much India is using different green electricity sources. Moreover, the latest trends, policy scenarios, and
proposed Nationally Determined Contributions (NDCs) for the Paris Agreement present both
opportunities and challenges in achieving India's 2050 net-zero target.

Research Methodology
Research Design
This study uses secondary data from the Ministry of Power and the Ministry of New & Renewable
Energy from 2013-14 to 2022-23 for various green electricity sources in India, such as solar, wind,
water, and biomass. We conducted qualitative and quantitative analyses of the electricity mix in India
from 2015 to 2023, utilizing Microsoft Excel for statistical analysis. This analysis aimed to identify
trends, patterns, and correlations, providing valuable insights into the current level of adoption of various
green electricity sources in India, including upcoming green power plant capacities. Moreover, we will
extrapolate this data to 2030, considering the latest trends, the planned or under-construction capacities,
and the policy outlook in light of the recently proposed Nationally Determined Contributions (NDCs) for
the Paris Agreement.
Data Collection Method
This secondary data is readily available as reports, executive summaries (monthly, yearly), dashboards,
and APIs from (https://cea.nic.in/api). The API sample datasets for All India Installed Capacity and All
India Installed Capacity (Renewables) are below.
{"id": 49, "month": "Jan-2023", "coal": "204435.5", "gas": "24824.2", "diesel": "589.2", "thermal_total":
"236468.91000000003", "nuclear": "6780", "hydro": "46850.170000000006", "res": "121549.52",
"grand_total": "411648.6"},
{"id": 50, "month": "Feb-2023", "coal": "204435.5", "gas": "24824.2", "diesel": "589.2", "thermal_total":
"236468.91000000003", "nuclear": "6780", "hydro": "46850.170000000006", "res":
"122113.06000000001",
"grand_total": "412212.13999999996"},
{"id": 51, "month": "Mar-2023", "coal": "205235.5", "gas": "24824.2", "diesel": "589.2", "thermal_total":

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"237268.91000000003", "nuclear": "6780", "hydro": "46850.170000000006", "res": "125159.81",

"grand_total": "416058.89"},
{"id": 52, "month": "Apr-2023", "coal": "205235.5", "gas": "24824.2", "diesel": "589.2", "thermal_total":
"237268.91000000003", "nuclear": "6780", "hydro": "46850.170000000006", "res":
"125692.30000000002",
"grand_total": "416591.37999999995"},
API sample Dataset – All India Installed Capacity (RES) from www.cea.nic.in
{"ID": 39, "Month": "Mar-2022", "small_hydro_power": "4848.90", "wind_power": "40357.58",
"bmpower_congen": "10205.61", "wastetoenergy": "476.75", "solar_power": "53996.54"},
{"ID": 40, "Month": "Apr-2022", "small_hydro_power": "4850.90", "wind_power": "40528.08",
"bmpower_congen": "10205.61", "wastetoenergy": "476.75", "solar_power": "55337.66"}
Data Analysis and Presentation
The monthly data for total installed and installed renewable was converted into total yearly financial and
cumulative data for total generation from all sources as shown in Table 1 below, and analysed with
Microsoft Excel to find trends, patterns, and connections to understand how much different green
electricity sources are being used in India, including new green power plant capacities. Moreover, we
will extrapolate this data to 2030, considering the latest trends, the planned or under-construction
capacities, and the policy outlook in light of the recently proposed Nationally Determined Contributions
(NDCs) for the Paris Agreement.

Table 2: Total Power Generation from all sources

Total Generation from all sources (MW)
Sector 2016- 2017- 2018- 2019- 2020- 2021- 2022- 2023-
17 18 19 20 21 22 23 24
Wind Power 32279.77 34145.00 35625.97 37693.75 39247.06 40357.59 42633.14 45886.51
Solar Power 12782.52 22346.21 28180.71 34627.82 40085.37 53996.54 66779.37 81813.60
Small Hydro Power 4379.85 4485.80 4593.14 4683.15 4786.80 4848.89 4944.29 5003.25
Biomass 9116.05 9674.42 9241.80 10022.95 10314.56 10682.36 10802.04 10845.86
Green (excl. Large 57260.23 69022.00 77641.62 87027.67 94433.79 109885.3 125159.8 143644.5
Hydro) 8 1 1
RE (incl. Large Hydro) 44478.42 45293.42 45399.22 45699.22 46209.22 46722.52 46850.17 46928.17
Coal 192162.8 197171.5 200704.5 205344.5 209294.5 210699.5 211855.5 217589.4
8 0 0 0 0 0 0 6
Gas 25329.38 24897.46 24937.22 24955.36 24924.00 24899.51 24824.21 25038.21
Diesel 837.63 837.63 637.63 509.71 509.71 509.71 589.20 589.20
Nuclear 6780.00 6780.00 6780.00 6780.00 6780.00 6780.00 6780.00 8180.00
Total Gen. (all 326848.5 344002.0 356100.1 370316.4 382151.2 399469.6 416058.8 441969.5
sources) 4 1 9 6 2 2 9 4
Year 2016- 2017- 2018- 2019- 2020- 2021- 2022- 2023-
17 18 19 20 21 22 23 24
% RE Generation 17.52 20.06 21.80 23.50 24.71 27.51 30.08 32.50
(Excl. Large Hydro)

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% RE Generation 31.13 33.23 34.55 35.84 36.80 39.20 41.34 43.12

(Incl. Large Hydro)

Scope of the Study

The scope of this study is limited to an assessment of the current level of adoption of various green
electricity sources in India, such as solar, wind, water, and biomass, considering upcoming green
electricity plant capacities. Moreover, it will assess opportunities and challenges in achieving India's
2050 Net Zero target, considering the latest trends, developments, policy scenarios, and Nationally
Determined Contributions (NDCs) for the Paris Agreement.
Limitations of the Study: Although the proposed study can provide valuable insights, it is essential to
acknowledge its limitations to ensure a balanced interpretation of the results. Some potential limitations
of this study include:
1. Data availability and quality: Data availability and quality depend on the secondary data sources.
2. Generalizability: The data values for installed capacity and installed capacity of renewables are for
India overall and may not be exactly representative of states, regions, or grids in parts.
3. Scope of Study: A single study's scope is limited to certain aspects of the adoption of green
electricity in India and may leave out other critical factors, such as customer perception.
4. External factors, such as weather conditions and events, may not be adequately accounted for in the
study's design.
5. Limited representation of stakeholders: The study might not involve the participation of all relevant
stakeholders, which could lead to an incomplete understanding of the issue.
6. Changes over Time: The dynamic nature of urban environments might impact adoption patterns, and
regulatory conditions might change over time, potentially affecting the relevance of the study's
conclusion.

1. Data Analysis and Discussions:

1.1 India’s Generation Capacity Mix over the past years
Exhibit 1 below shows India's RE generation capacity mix over the years in MW. As can be seen, the
country's generation capacity mix in MW has significantly changed due to increased electricity demand.
The share of wind and solar capacity have increased significantly.

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RE Generation Capacity Mix of India over the years in MW

50000.00
45000.00

40000.00

35000.00

30000.00

25000.00

20000.00

15000.00

10000.00

5000.00

0.00

2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 2022-23 2023-24

Wind Power Solar Power Small Hydro Power Biomass RE incl. Large Hydro

Exhibit 1: RE Generation Capacity mix of the country over the past years in MW (based on Table
2)

2.2 Growth of Green Electricity

Over the past ten years, it has expanded quickly, instilling confidence in all parties involved. Due to
innovative policies and a competitive market structure, private investors and developers have created
capacities. India has been able to take full advantage of the phenomenal global decline in the costs of
renewables. Figure 2 shows the country's green electricity growth over the last two decades.

Figure 2. The Growth trajectory of green electricity in India (TERI’s analysis)

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Following the initiation of the National Solar Mission in 2010, there has been a notable acceleration in
growth, particularly after India made its NDC commitments in Paris. Over the last five years, India's
renewable capacity has grown at a compound annual growth rate (CAGR) of 10% and over 20% over the
past decade. The costs associated with generating renewable energy have sharply declined in the past ten
years due to significant advancements in manufacturing technologies, increased economies of scale, and
improved supply chains. Solar and wind energy have shifted from being relatively expensive options to
the most affordable sources of electricity whenever sunlight or wind is available.

2.3. Present Installed Capacity (MW) as of 31.03.2023

The current installed capacity of the country, as of 31.03.2023, is 415.4 GW, which comprises 236.68
GW from thermal (211.8 GW coal & lignite and 24.8 GW gas), 6.78 GW from nuclear, 167.2 GW from
RES (42.1 GW hydro, 66.8 GW solar, 42.6 GW wind, 4.7 GW small hydro, and 10.8 GW bio power),
and 4.75 GW from PSP (excluding 0.589 GW diesel- based capacity). The region-wise and fuel-wise
details of installed capacity as of 31st March 2022 are given in Table 3 below.
Resource Capacity (MW) Percentage
Hydro 46850 11.26
Small Hydro 4944 1.19
Solar PV 66780 16.05
Wind 42633 10.24
Biomass 10802 2.59
Nuclear 6780 1.62
Coal+ Lignite 211855 50.91
Gas 24824 5.96
Diesel 589 0.14
Total 416,057 100
Table 3: Present Installed Capacity (MW) as of 31.03.2023

2.4 Retirement of coal-based capacity

The coal-based capacity of 2,121.5 MW, which is likely to be retired due to the non-submission of any
Fuel Gas Desulphurization (FGD) installation plan to abide by the new environmental reforms, has been
considered to be retired until 2029-30. It may be noted that out of this, the year 2022-23 saw the
retirement of a capacity of 304 MW (CEA).

2.5 Planned or Under Construction Capacities (CEA):

Planned Capacities that are likely to yield benefit during the period 2023 - 30:
Coal
The latest assessment by CEA estimates that the coal capacity under construction and anticipated for
commissioning during 2022-30 is approximately 26,900 MW. Pit head-based potential supercritical coal
capacity totals 21,240 MW, and the coal-based capacity of central and state sector utilities totals 9,420
MW.

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Hydro (including PSP)

The latest assessment by CEA estimates the hydropower capacity, which is under construction and likely
to yield benefits during 2022–30, to be around 11,494 MW. The hydro and PSP projects have a combined
capacity of 502 MW and 2780 MW, respectively.
Nuclear
According to the latest assessment by the Department of Atomic Energy (DAE), 8700 MW of capacity is under
construction, and the same has been considered for the studies for 2022-30.
Solar and Wind-based Capacity
In the studies, region-wise solar and wind-based candidate capacity has been considered based on the
latest state-level potential furnished by the Ministry of New and Renewable Energy. MNRE has
indicated that wind-based projects may achieve a cumulative installed capacity of up to 100 GW by 2029
- 30 (MNRE).
Resource Capacity (MW) Percentage
Hydro 11494 6.69
PSP 2780 1.61
Small Hydro 502 0.29
Solar 92580 53.89
Wind 25000 14.55
Biomass 3818 2.22
Nuclear 8700 5.06
Coal+ Lignite 26900 15.66
Gas 0 0
Total 171,774 100
Table 4: Planned/Under Construction Capacity Addition 2022-30 (MW), CEA

2.6 Optimal Generation Mix for Projected Installed Capacity in 2029-30

Considering all the factors and the latest demand predictions for the five regional grids (NR, WR, SR,
ER, and NER), the updated Optimal Generation Mix for 2030, released in April 2023, estimated that the
best combination of power generation capacity for 2029-30 would be 777,144 MW. This total includes
53,860 MW from hydro (not counting 5,856 MW from hydro imports), 18,986 MW from pumped
storage, 5,350 MW from small hydro, 251,683 MW from coal, 24,824 MW from gas, 15,480 MW from
nuclear, 292,566 MW from solar, 99,895 MW from wind, and 14,500 MW from biomass, plus a battery
energy storage capacity of 41,650 MW/208,250 MWh to meet the expected peak electricity demand of
334.8, according to the 19th EPS report. The installed capacity from renewable energy sources,
excluding large hydro (solar, wind, biomass, and small hydro), is expected to be 435 GW in 2029 - 30
(CEA).
The likely installed capacity (MW) in 2029-30 is given in Table 5 below.
Resource Capacity (MW) Percentage
Hydro 53860 6.93
Small Hydro 5350 0.69
PSP 18986 2.44
Solar PV 292566 37.65

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Wind 99895 12.85

Biomass 14500 1.87
Nuclear 15480 1.99
Coal+ Lignite 251683 32.38
Gas 24824 3.19
Total 777144 100
BESS(MW/MWh) 41650/208250
Table 5: Likely Installed Capacity (MW) in 2029-30, CEA

The resource-wise details of likely installed capacity in 2029-30 are given in Exhibit 2. The resource-
wise details of likely installed capacity in 2029-30, CEA

2.7 Additional Capacity required to meet likely Installed Capacity in 2029-30

Resource Present Installed Planned Likely Installed Additional Capacity
Capacity (MW) Capacity 2022 Capacity 2029 - 30 required
31.03.2023 - 30
Hydro 42104 11494 53860 262
PSP 4746 2780 5350 (included in psp
growth)
Small Hydro 4944 502 18986 13540
Solar PV 66780 92580 292566 133206
Wind 42633 25000 99895 32262
Biomass 10802 3818 14500 (included in planned)
Nuclear 6780 8700 15480 0
Coal+ Lignite 211855 26900 251683 12928
Gas 24824 0 24824 0

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Diesel 589 0 0 (phased out)

Total 416057 171774 777144 192198
BESS 0 0 41650/208250 0
(MW/MWh)
Table 6: Additional Capacity required to meet likely Installed Capacity in 2029-30, CEA

3.0 Conclusion & Summary

India’s energy sector net CO2 emissions pathways
During the climate conference COP26 held in Glasgow in 2021, India announced that it would reach net
zero by 2070, but its current emissions trajectory is significantly off course. In our basic scenario,
emissions will nearly triple by 2040 and only slightly decrease by 2070; fossil fuels are essential to
India's robust economic growth. Our scenario for Net Zero 2070 lays out an entirely different result.
This scenario, which calls for a radical rethinking of the economy, is based on massive investments in
clean energy, decarbonizing India's quickly developing infrastructure and industrial sectors, and fully
utilizing the country's exceptional human resources (WoodMac)

Figure 3: India’s energy sector net CO2 emissions pathways, WoodMac

India’s 2030 Decarbonization Roadmap

• A coal-based capacity addition of 16,204.5 MW is required to meet the electricity demand
requirement in 2029-30, apart from the coal-based capacity of 26,900 MW currently under
construction (for likely benefits during 2022-23 to 2029-30).
• By 2030, an additional 180.4 GW of RE-based capacity (145.9 GW solar and 34.5 GW wind) is
required in addition to the 117 GW (92.5 GW solar and 25 GW wind) currently in the
planning/implementation stage.
• A prospective addition of 389 MW of large hydroelectric capacity is required until 2030, apart

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from the capacity of 11,494 MW of hydroelectric projects currently under construction (for likely
benefits from 2022–23 to 2029–30).
• The likely share of thermal installed capacity will reduce from 57 % of the total installed
capacity as of March 2023 to 35.5 % in 2029–30, while the RE-based installed capacity in 2029–
30 (including large hydro) will increase to 62.4% of the total installed capacity, compared to 41.4
% as of March 2023.
• By the end of 2029-30, the non-fossil fuel-based installed capacity will likely be 500.6 GW,
comprising about 64% of the total capacity mix.
• The energy storage capacity required for 2029-30 is likely to be 60.63 GW (18.98 GW PSP and
41.65 GW BESS) with storage of 336.4 GWh (128.15 GWh from PSP and 208.25 GWh from
BESS).
• As of 31.03.2023, the country has a PSP-based capacity of 4746 MW. PSP projects totaling 2780
MW are under construction and will likely benefit the country until 2030. In addition to these
projects, a PSP capacity of 11,460 MW is required until 2030 to meet the country's electricity
storage requirements.

Opportunities and Challenges:

Electrifying India: Policymakers hold the key
Renewables must grow quickly to electrify India's economy in the future. The nation currently holds the fourth
position globally for installed renewable capacity; since 2014, renewable energy has increased fourfold, making
up approximately 43% of the nation's overall power generation capacity (including large hydro). While a start
is a good beginning, much more is required. Policy is crucial in the Indian economy, as in every other sector.
The government's Panch Amrit project, which outlined its first climate targets at COP26 in 2021, created the
conditions for the renewable energy industry to flourish quickly. India will need to nearly quadruple its non-fossil fuel
capacity in just six years. With this effort, non-fossil fuel sources will meet 50% of India's energy needs by 2030. If
the strategy is effective, there might be a cumulative decrease in carbon emissions of one billion tons by 2030, which
would lead to a GDP with a carbon intensity of less than 45% and net zero emissions by 2070. The 2070 net-zero
target will need resolute political leadership for many years. Despite the growing demand for fossil fuels, Prime
Minister Narendra Modi's goal of rapidly deploying low-carbon technologies at scale is supported by his enormous
political capital at home. It will be incumbent upon future leaders to adopt the vision of Prime Minister Modi and
exert greater pressure to garner backing for sustainable energy and the potential economic revolution it offers.
Politicians need to ensure that consumers know the reasons for India's plans to impose a domestic carbon tax.

Building Indian Renewable Supply Chains

India has made excellent progress so far, but we still need to do more to meet our target of nearly 80%
non-fossil fuel electricity output by 2050. By doing this, India can improve job creation, cost control,
energy security, and indigenous supply chains. For instance, the nation's insufficient capacity to produce
solar wafers hinders India's manufacturing aspirations and net-zero targets. Although policy measures to
support the expansion of the local photovoltaic (PV) supply chain have quickened, the industry still
depends on imports for PV machinery, ingots/wafers, polysilicon, and ancillaries. With significant grid
and storage capacity upgrades needed to support a substantial growth in renewable energy, battery
storage is essential to India's goal of being net-zero. Government incentives are available for capital
projects, and battery storage installation is required in variable renewable energy projects above 5 MW.

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However, battery storage investment is falling behind the growth in renewable capacity. India requires
gigawatt-scale battery manufacture to guarantee energy security and lower production costs. Another
difficulty is accessing the essential minerals needed to increase domestic battery capacity. The 208 GWh
capacity for battery energy storage by 2030 is significantly more than what the government is willing to
support through the production-linked incentive program to establish a battery manufacturing capacity of
about 50 GWh.

Unlocking India’s internal potential

Due to its size, population, and economic development, India has several special opportunities to reduce
its carbon footprint. However, its potential for producing bioenergy is mainly unrealized, with an annual
biomass residual production of about 750 million tonnes (Mtpa). Using bioenergy in the transportation
and industrial sectors instead of residential areas could help reduce air pollution from stubble burning and
oil imports. India already leads the world in the areas of compressed biogas, biomass pelleting, and
bioenergy in thermal power plants and road transportation. Its development of in-house solutions and
abundance of bio-feedstock reveal its tremendous promise in sustainable aviation fuel (SAF). The
Mangalore Refinery's SAF unit is scheduled to begin operations in early 2025, and approval for an
indigenous SAF manufacturing process is anticipated this year. To accelerate these developments, India
has to increase regulations to guarantee the development of the biomass supply chain and offer federal
funding support for contemporary biofuel production facilities that use regional resources. India
possesses the scientific capacity and expertise in pressurized heavy water and submarine reactors, which
positions it as a leader in small modular reactors (SMRs) with a maximum power of 300 MW or less. The
recent alliance between the National Thermal Power Corporation and the Nuclear Power Corporation of
India to expedite nuclear deployment may accelerate SMR development. However, the Atomic Energy
Act of 1962 is under review to allow for greater participation, and private-sector investment will also be
necessary.

Realizing India’s Green Hydrogen Potential

A key component of decarbonizing India's most difficult sectors is low-carbon hydrogen. By 2030, 4 Mt
of low-carbon hydrogen would likely be produced, representing 5% of the world's total. In addition to
decarbonization, India needs 125 GW of clean power from renewable sources to meet its 2030 aim of
producing 5 Mt of green hydrogen and 55 Mt of green hydrogen to achieve net zero by 2070. We
estimate that India can manufacture up to 35 Mtpa of this green hydrogen locally, with imports covering
the remaining amount.

Carbon Capture and Storage requires urgent support

India is well-positioned to benefit from low-carbon hydrogen due to its cost- cost-effectiveness and
governmental support, but more needs to be done by the government to encourage other industries, such
as carbon capture, utilization, and storage (CCUS). Despite acknowledging the significance of CCUS,
the government's approach is nevertheless unduly conservative. The powerful think tank of the Indian
government, NITI Aayog, has noted a significant amount of CCUS potential; nonetheless, the nation
lacks funding and a clear timetable. The carbon price system that India will implement by 2026 will be
beneficial, but more action is still needed. Incentives should be provided by using captured CO₂ to create
methanol for India's road fleet, diesel generators, tractors, and urea for the country's massive fertilizer

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industry. The lack of progress is concerning because our Net Zero 2050 model calls for more than one
gigatonne of CCUS capacity.

Tackling India’s hard-to-abate sectors

Economic growth must be correlated with sustainability to achieve the Net Zero target, particularly in
hard-to-abate sectors, such as petrochemicals, cement, iron, and steel, which together account for three-
quarters of India's total industrial emissions. Cement manufacturing is responsible for around 25% of
India's industrial emissions. Major cement players should benefit from the fast-paced construction
industry by investing in a low-carbon value chain. For example, JSW Cement wants to source agricultural
waste for use as biomass fuel at its manufacturing plants to decrease its carbon emissions. Newer
technologies, including cofiring hydrogen, electrifying kilns, harnessing waste heat from industry and
agriculture, and CCUS, can support long-term decarbonization initiatives for cement producers in India.
India is the country that produces the most steel worldwide, but it also produces the most industrial
pollution. First and foremost, steel producers need to lessen their reliance on extremely polluting
induction furnaces and coal-fired direct reduction furnaces. One way to cut down on carbon emissions is
to switch to low-carbon electric arc furnaces and use greener metals, like scrap and direct reduction iron
(DRI) made with gas or hydrogen. The swift escalation of petrochemical demand in India warrants the
provision of decarbonization initiatives. India has to decarbonize its ethylene-producing industry
because it uses more energy and generates more emissions. Expanding the circular economy for plastics
to lower demand by 10% by 2050 compared to our base case, electrifying crackers, switching to low-
carbon feedstock, and using hydrogen cofiring furnaces are important milestones in our Net Zero 2050
scenario.

Energy Efficiency: Leading the way

India is a leader in national policy with local impact, as demonstrated by the Unnat Jeevan by Affordable
LEDs and Appliances for All (UJALA) program, the largest zero-subsidy LED bulb project in the world
for residential consumers. In addition to cutting energy use by 35 TWh a year (a remarkable 3% of
India's total electricity demand), UJALA spurred significant investments in the production of LED
bulbs, which resulted in a significant drop in retail pricing. The Perform, Achieve, and Trade initiative
has been instrumental in promoting efficiency improvements in energy-intensive businesses. Designated
consumers can be given personalized energy-saving goals, and certificates obtained by exceeding these
goals can be exchanged, offering a special incentive to adopt energy-saving practices. The building
industry must address energy efficiency, especially in cooling. It is also essential to fully enforce national
building norms and improve appliance standards and ratings.

Building an Indian Carbon Market:

India intends to develop a voluntary system concurrently and operate as a compliant carbon market.
India, a nation known for its price sensitivity, must set its carbon price at US$154 per tonne of CO₂ by
the year 2050 to achieve net zero. Development of the carbon market could incentivize businesses to
profit from their investments in green hydrogen, bioenergy, CCUS, and renewables, which might not
otherwise appear feasible due to their high initial capital expenditures.

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