Economic Survey FY25 warns of energy risks amid India's green transition

As India pushes towards ambitious energy transition goals, the Economic Survey for FY25 has warned against excessive dependence on imports, particularly for critical minerals essential for clean energy technologies.

 

Chief Economic Advisor V. Anantha Nageswaran, in the survey's preface, emphasised the need for "strategic thinking" to avoid geopolitical risks. India currently lacks a significant domestic supply of critical minerals like those used in solar panels and batteries, making it reliant on imports, especially from China.

 

To address this challenge, the government has launched the Rs 34,300 crore National Critical Minerals Mission to boost domestic mining. However, Nageswaran pointed out a global contradiction— while the West prioritises both artificial intelligence (AI) and clean energy, the energy needs of AI-driven technologies are immense.

 

The survey also highlighted an important reality: coal remains a key energy source for India. While Western nations push for solar and wind, their supply chains rely heavily on China, which meets its energy demand largely through coal.

 

For India, this means balancing clean energy goals with energy security. The survey noted that unlike developed countries with access to natural gas, India’s most reliable resource remains coal, accounting for 10 per cent of the world’s reserves. Shutting down coal plants without a stable alternative could lead to energy instability.

 

To make coal use more sustainable, the government is investing in advanced ultra-supercritical technologies to improve efficiency and reduce emissions. The survey emphasised that India’s transition must focus not just on cutting emissions, but also on adapting to energy challenges.

 

With a target of 500 gigawatts of non-fossil capacity by 2030, the survey called for greater investment in battery storage, grid infrastructure, and critical minerals. While power capacity expansion has picked up, recent monsoon disruptions have slowed the installation of transmission lines.

 

As India works towards becoming a developed nation by 2047, the Economic Survey stressed that energy security must remain a priority, ensuring a smooth and self-reliant shift towards a low-carbon future.