By 2030, India plans to achieve 500 GW of installed capacity from non-fossil fuels, marking a significant shift towards sustainability and energy security
Gaurav Prabhumirashi
India's growth story over the past two decades has been marked by vibrant economic progress, largely driven by service exports and rising domestic consumption. As of 2024, the economy appears robust, poised to replicate its service sector success by transforming into a global manufacturing hub to leverage its demographic dividend.
A robust manufacturing sector necessitates significant resources, with power being a crucial component. Despite this, India's per capita electricity consumption remains low compared to global averages. As the country embarks on its manufacturing-focused era, electricity demand is expected to rise significantly. To meet this demand while adhering to climate commitments, India plans to add new electricity generating capacity primarily from non-fossil fuel sources. The goal is to achieve 500 GW of installed non-fossil fuel capacity by 2030.
By May 31, 2024, India's non-fossil fuel-based power generation capacity stood at 201.7 GW, with renewable energy, including small hydro projects, contributing 146.6 GW. To meet growing demands, a significant increase in renewable energy capacity is anticipated, supported by the renewable energy procurement roadmap from the Ministry of New and Renewable Energy (MNRE), which targets 50 GW of bids annually from FY 2023-24 to FY 2027-28.
Regulatory policies for the renewable energy sector are governed by both central and state governments, as electricity is part of the concurrent list. Key aspects of central government policy include promoting domestic manufacturing of solar modules and electrolyzers, safeguarding domestic manufacturing, and domestic content requirements, and implementing policies to encourage specific types of electricity generation like rooftop solar and offshore wind.
India's renewable energy policy framework adopts a holistic approach, addressing multiple factors. For example, the Ladakh region, with excellent irradiation levels, lacks sufficient infrastructure to integrate its power into the grid. To tackle this, the government announced the green energy corridor.
Furthermore, the government identified states with offshore wind potential and introduced a viability gap funding scheme with an outlay of Rs 7,453 crores for installing 1 GW of offshore wind projects. Regulatory policies also aim to enhance self-sufficiency in the energy. The Production Linked Incentive (PLI) scheme, with an outlay of Rs. 24,000 crores, targets achieving gigawatt-scale manufacturing capacity of high-efficiency solar PV modules. Additionally, the Strategic Interventions for Green Hydrogen Transition (SIGHT) Program, with an outlay of Rs. 17,490 crores under the National Green Hydrogen Mission, supports domestic manufacturing of electrolyzers and green hydrogen production. These investments are expected to generate numerous direct and indirect jobs while ensuring energy security.
The government has also introduced schemes to promote distributed solar generation at the household level in both rural and urban areas. The PM-KUSUM scheme aims to reduce the agricultural sector's reliance on diesel and boost farmers' incomes by providing central government subsidies of up to 50% for installing standalone solar pumps and solarizing existing grid-connected agricultural pumps. Farmers can alsoinstall grid-connected solar plants on barren land and sell electricity to local distribution companies (DISCOMs). In the interim budget for FY 2024-25, the government announced the PM Surya Ghar Muft Bijli Yojna, which offers subsidies covering up to 40% of solar panel installation costs. This scheme aims to equip 10 million homes with solar panels, saving INR 75,000 crores in electricity costs.
(The writer is a manager- investments at AMPIN Energy Transition, views are personal)
