The Potential of India’s Clean Power Ambition

UPSC Syllabus: Gs Paper 3- Infrastructure

Introduction

India’s clean power transition is both an energy-security priority and a major economic opportunity. The ambition to achieve 900 GW of non-fossil power capacity by 2035, alongside net-zero emissions by 2070, requires large investments in renewable generation, storage, transmission and domestic manufacturing. Success depends on making electricity affordable and reliable while meeting rising demand, supporting economic growth and reducing long-term dependence on imported fossil fuels and technologies.

Current Status of India’s Clean Energy Transition

1. Non-Fossil Installed Capacity: Non-fossil sources accounted for 54.2% of India’s total installed power capacity by June 2026, showing significant progress in clean-energy deployment.
2. Renewable Electricity Generation: Renewable sources contribute around one-fourth of actual grid electricity generation, despite their growing share in installed capacity.
3. Expansion of Solar Energy: Around 8 GW of open-access solar capacity came online in 2025, mainly driven by industrial and commercial consumers purchasing electricity directly.
4. Unutilised Renewable Capacity: Around 40 GW of auctioned low-cost solar projects remain without buyers, showing a mismatch between renewable power availability and electricity procurement.
5. Changing Electricity Prices: Solar-rich afternoons experience abundant electricity and near-zero exchange prices, while post-sunset prices have repeatedly reached ₹10 per unit and ₹37 in Tamil Nadu.
6. Growing Renewable Manufacturing: India’s solar module manufacturing capacity has increased from around 2 GW a decade ago to over 200 GW, strengthening domestic production capabilities.

Significance of Clean Power Transition

1. Strengthening Energy Security: Solar plants, batteries and transmission networks provide electricity services for decades, reducing the need for repeated purchases of imported oil and gas.
2. Supporting Economic Development: Affordable and reliable electricity can support India’s ambition of becoming a developed economy by 2047 without locking future growth into fossil fuels.
3. Meeting Climate Commitments: Increasing non-fossil electricity generation will help India pursue its net-zero target by 2070 while contributing to global climate goals.
4. Meeting Rising Electricity Demand: Population growth, urbanisation, industrial expansion, air-conditioning and data centres will increase electricity demand, making clean power essential for future energy requirements.
5. Supporting Industrial Electrification: Affordable renewable electricity can replace imported gas in industrial heating and support green hydrogen production and cleaner industrial processes.
6. Creating Employment Opportunities: Renewable energy expansion can generate green jobs in manufacturing, installation, transportation, servicing, battery production and other supporting activities.
7. Expanding Household Benefits: Rooftop solar can reduce household electricity expenses, provide surplus electricity for sale to the grid and improve access to affordable power.

Potential of India’s Clean Power Ambition

1. Large Investment Opportunity: India’s net-zero transition presents an estimated $22.7 trillion investment opportunity through 2070, covering renewable energy, transmission, storage and emerging technologies.
2. Attracting Global Capital: Domestic resources can cover just over 70% of the total investment requirement, leaving a funding gap of approximately $6.5 trillion to be met substantially through overseas capital and development finance.
3. Reducing Electricity Procurement Costs: A least-cost clean-power pathway could reduce average electricity procurement costs by around 15% in real terms, saving over ₹2 lakh crore annually by 2035.
4. Affordable Round-the-Clock Electricity: Solar Energy Corporation of India Limited (SECI)’s 1,000-MW thermal-mimic auction secured renewable electricity with storage at ₹5.25–5.26 per unit, with prices fixed for 25 years, demonstrating the potential to provide reliable electricity similar to coal-based power.
5. Domestic Retention of Economic Value: Depending on project economics, over 70% of a battery project’s lifetime economic value could potentially remain within India, even with imported cells.
6. Developing Clean-Energy Industries: Battery storage, power electronics, energy-management software, green hydrogen and electrified transport can create investment opportunities across manufacturing and infrastructure.
7. Large-Scale Storage Potential: Around 200 GW of storage, supported by transmission expansion and flexible demand, could be critical for integrating 900 GW of non-fossil capacity by 2035.

Key Challenges in India’s Clean Energy Transition

1. Mismatch Between Generation and Demand: Cheap solar electricity is abundant during daytime, but evening shortages and high market prices make it difficult for utilities to procure power efficiently.
2. Intermittency of Renewable Energy: Dependence on sunlight and wind creates supply fluctuations, requiring battery storage, flexible demand and transmission expansion to maintain reliable electricity supply.
3. Financial Weaknesses of DISCOMs: Distribution companies (DISCOMs) face financial losses, delayed payments and procurement obligations, limiting their ability to purchase available renewable electricity.
4. Financing and Regulatory Barriers: High financing costs, unpredictable regulations and weak grid infrastructure can discourage global investors from financing long-term clean-energy projects.
5. Dependence on Imported Technologies: India’s dependence on imported battery cells, critical minerals and technologies creates vulnerabilities in clean-energy supply chains.
6. Transmission Infrastructure Gaps: Inadequate grid connectivity and underutilised existing infrastructure restrict renewable projects from supplying electricity when and where it is needed.
7. Risk of Fossil-Fuel Lock-in: Long-term coal power contracts lasting 25–30 years can create expensive commitments and restrict the adoption of cheaper renewable alternatives.

Government Initiatives and Policy Framework

1. PM-KUSUM: The Pradhan Mantri Kisan Urja Suraksha evam Utthaan Mahabhiyan (PM-KUSUM) has provided more than 30 lakh farmers access to solar-powered irrigation, while solarisation of agricultural feeders creates additional daytime demand.
2. PM Surya Ghar Muft Bijli Yojana: Launched in February 2024, the scheme targets rooftop solar installations in one crore households, with over 65 lakh homes joining the campaign.
3. COP-26 Commitment: India committed to achieving 500 GW of non-fossil fuel capacity by 2030 and achieved its target of meeting 50% of installed power capacity through non-fossil sources in 2025, five years ahead of schedule.
4. Electricity Act and Open Access: The Electricity Act provides an institutional foundation for open access, captive and group-captive generation, allowing consumers to procure electricity directly.
5. Renewable Energy Auctions: Competitive auctions help discover affordable electricity prices and enable procurement based on supply requirements rather than dependence on particular technologies.
6. National Green Hydrogen Mission: The mission targets production of five million tonnes of green hydrogen by the end of this decade, including its use in transport.
7. Green Energy Corridors: The government is developing transmission lines and substations to transfer renewable electricity from generation-rich regions to demand centres, with an investment target of nearly ₹2 lakh crore.
8. One Nation, One Power Grid: Integration of five regional grids into one national network has strengthened electricity transmission across the country.
9. Domestic Manufacturing Promotion: Make in India and Atmanirbhar Bharat initiatives have supported solar manufacturing, increasing module capacity beyond 200 GW and cell capacity to nearly 40 GW.
10. International Solar Alliance (ISA): The initiative promotes international cooperation in renewable energy by facilitating access to finance, technology and expertise, including a proposed $200-million Africa Solar Facility.

Way Forward

1. Prioritise Renewable Energy and Storage: Utilities should compare renewables, storage, demand flexibility and existing thermal capacity before signing expensive, long-term coal power contracts.
2. Introduce Technology-Neutral Auctions: Electricity procurement should specify peak-hour supply, availability and reliability rather than particular technologies, allowing auctions to identify the lowest-cost energy mix.
3. Improve Grid Connectivity: Solar and storage projects should be allowed to use underutilised grid connections of existing solar projects during nighttime hours.
4. Introduce Time-Based Electricity Pricing: Consumers should receive substantial discounts during solar-rich hours, while peak-hour electricity prices should reflect the actual cost of supply.
5. Expand Consumer Choice: Large consumers should, by default, procure their own electricity to seek better deals, while DISCOMs remain suppliers of last resort with explicitly funded subsidies.
6. Strengthen Domestic Battery Manufacturing: India should import battery cells where necessary while developing domestic manufacturing of battery packs, power electronics, controls and energy-management software.
7. Develop Battery Recycling Capacity: Recycling facilities should recover critical materials from imported batteries, reducing supply-chain risks and supporting domestic manufacturing.
8. Promote Innovation and Local Participation: Startups, Indian Institutes of Technology (IITs), investors and local bodies should develop affordable storage, solar-powered household appliances and agricultural technologies through innovation and healthy competition.

Conclusion

India’s 900-GW clean power ambition can support economic growth, energy security and climate goals while creating an investment opportunity. Its success depends on reliable storage and grids, financially stronger utilities, flexible electricity markets, domestic manufacturing and recycling. A balanced transition can deliver affordable electricity without delaying development or creating long-term dependence on fossil fuels and imported technologies.

Question for practice:

Discuss India’s clean power ambition, its potential benefits, major challenges and the measures required for its successful implementation.

Source: Businessline ; Economic Time