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Astha Gupta, Shruti M. Deorah*
* Corresponding author – email
Due to rapid economic growth, urbanization, and industrialization, India’s electricity demand is expected to nearly double in the next decade. The electricity demand in the country has grown at an average of 6-7% in the last three years. 250 GW peak demand was met in May 2024, up from 240 GW in September 2023, and is projected to touch 270 GW in summer 2025.
At the same time, India has announced an ambitious target of deploying 500 GW of non-fossil or clean capacity by 2030.
The Government of India has undertaken several policy measures and regulatory reforms to enable progress towards this target, and 212 GW cumulative renewable energy (RE) capacity, including 46 GW large hydro, was installed by 31st January 2025. With 8 GW of nuclear capacity installed, 280 GW is remaining to achieve the 2030 clean capacity target.
This report aims to distill the key barriers that are thwarting the pace of deployment of large-scale renewables and energy storage, with the objective that addressing these key challenges would move the needle significantly. The barriers have been broadly divided into project implementation challenges and slow evolution of ecosystem enablers.
Most of India’s new clean capacity is expected to come from solar and wind energy sources, which are cost-effective and can be installed rapidly.
However, several implementation and ecosystem challenges have restricted the pace of deployment to less than 20 GW per year, with the exception of 2024, which saw 28 GW of new solar+wind capacity installed.
If the country is unable to deploy renewable capacity along with grid-scale storage at the required pace, peak power shortages can be expected.
Both the central and state governments have taken several measures to shorten implementation cycles and enable procurement of RE power. In March 2023, the Ministry of New and Renewable Energy (MNRE) announced a goal of tendering 50 GW/year to be implemented by four renewable energy implementing agencies (REIAs) responsible for tendering of RE capacity. The RE tendered capacity (across REIAs, Discoms and C&I) has tripled from 27 GW in 2022 to 84 GW in 2024. However, the conversion to completed auctions and thereafter signed offtake agreements continues to be a challenge. Data shows that about half of announced tenders result in auctions and about half of those convert to power purchase agreements (PPAs).
This challenge is compounded by the huge variance among states in installing and procuring renewable capacity. We examine trends in the top six states by energy consumption, accounting for 70% of total RE capacity. While some states such as Rajasthan and Gujarat have doubled their installed RE capacity since FY 2021-22, Karnataka has slowed down considerably over the last three years and Uttar Pradesh has much smaller installed base at only about 3 GW. These states would need to scale the installed RE capacity ~2.5 times to meet the 2030 requirement.
Both these types of barriers need coordinated action by the centre and states to resolve in the short to medium term.The table above summarizes key challenges and potential solutions, based on our research and conversations with stakeholders. Addressing these barriers would require overhauling the resource planning and procurement through a mix of policy & regulatory changes, fine-tuning the role of and improved coordination between central and state agencies, building capacity in new technologies such as advanced conductors and creating an ecosystem for upstream manufacturing, etc. Collaboration with friendly countries would be key in developing strategic supply chains and technology expertise, in addition to creation of bilateral markets for products of domestic manufacturing. Improved capacity of power sector officials and the industry would be the foundation on which this new grid of the future can be built.
