BS Infra Summit: Fossil fuels can't be eliminated, say industry experts

Industry experts say the country's green energy success depends on a long-term policy vision, targeted investments in infrastructure, and the development of domestic technology and financing solutions

As various nations grapple with energy transition and climate commitments, India’s challenge is similar. The country relies on fossil fuels for more than 80 per cent of its energy supply, so the shift to green sources cannot jeopardise economic growth. Policymakers, industry leaders and energy experts discussed India’s options during a panel discussion at the Business Standard Infrastructure Summit in New Delhi. 

Alok Kumar, former secretary in the Ministry  of Power, set the tone by acknowledging the centrality of fossil fuels in India’s energy system. “Fossil fuels are the backbone of our energy security today, not only in India but globally,” he said. Almost 80 per cent of India’s energy comes from coal and the country imports more than 80 per cent of its oil and more than 50 per cent of gas. “Gas imports are projected to rise to 60-70 per cent in the next five to six years,” Kumar noted, underlining the constraints of an import-dependent economy. 

Green transition 

Despite depending on imports India cannot afford to delay the transition to green energy. “We need to move away from fossil fuels as quickly as possible in an orderly manner. But this transition will take decades. Fossil fuels will continue to be important while we accelerate renewable energy.” 

Using fossil fuel in better ways is an interim solution. “There is a lot of scope for energy efficiency in greening the processes,” said Kumar, referring to coal mines and refineries that are working to reduce emissions. “Coal mines are diesel intensive but several of their equipment are now getting electrified. Coal loading is done by diesel-operated lifters, but these silos can be turned to electric silos and electric trains. Similarly, if refineries use green hydrogen, they can bring down emissions.” 

Technology is making power generation and coal gasification cleaner as carbon capture and utilisation and storage (CCUS) moderates emissions. But such progress is uneven. “Finding storage space in the subcontinent is very slow, and carbon dioxide pipelines and utilisation are still at a nascent stage. But my conviction is, India will require CCUS after two or three decades. To some extent, it will be the least costly solution.” 

“One thing is certain: the share of fossil fuels will gradually decline but I am not sure if we will be able to eliminate them. You may require the use of fossil fuels even beyond two to three decades in a limited manner,” said Kumar. 

India had an installed electricity-generation capacity of 484.82 Gigawatt (GW) as of June, according to government data. Thermal power, which includes coal, gas and diesel, comprised 242.04 GW or 49.92 per cent of the total capacity. Non-fossil fuel sources, including renewable energy (RE), large hydro and nuclear power, contributed 242.78 GW, or 50.08 per cent of the installed capacity. The distribution means that non-fossil fuel sources comprise just over half of India’s total installed capacity, reflecting the ongoing shift towards cleaner energy sources in the country’s energy mix. 

According to the International Renewable Energy Agency 2025 statistics, India ranks fourth globally in overall renewable energy installed capacity, fourth in wind power, and third in solar power capacity. According to government data, India in 2024–25 generated 1,08,494 gigawatt-hour (GWh) of solar power, surpassing Japan’s 96,459 GWh and becoming the world’s third-largest solar energy producer. In the same period, India’s domestic solar module manufacturing capacity increased from 38 GW to 74 GW. As of 2025, renewables account for 50.07 per cent of India’s total installed power capacity of 484.82 GW, meeting five years ahead of schedule the country’s COP26 commitment to reach 50 per cent non-fossil fuel-based power capacity 

by 2030. 

India has rapidly built RE capacity but integrating it into the grid remains a challenge, said Mani Khurana, senior energy specialist at the World Bank. “How can you say it’s time to cut down on fossil fuels when you cannot integrate the RE generation that you have?” 

“For this, you need a storage plant, a battery and a pump storage,” Khurana said, adding that decarbonising transport and industry must go hand in hand with greening power generation. 

The “weakest link”, she argued, is distribution. “Power distribution companies are consumer-facing, and they run from pillar to post to ensure that power reaches consumers,” she said. Without their active participation, progress in renewable energy integration, energy efficiency or mobility will stall. 

“Be it energy efficiency, renewable energy integration or e-mobility, nothing is possible if the distribution company is not on your side. As long as the ecosystem is not in place, you will not be able to implement it,” said Khurana. 

She emphasised that investments in transmission and storage have slowed, though they are critical for RE integration. “We have been focusing a lot on the generation of renewable energy but the transmission, which plays a pivotal role in getting those electrons out, has slowed down. So investment in transmission and storage needs focus.” 

She called efficiency a low-hanging fruit. “It will be a win-win situation if energy efficiency in household and industrial processes becomes our main focus.” 

By 2030, India aims for electric vehicles (EVs) to constitute 30 per cent of total vehicle sales. According to government data, EV sales in the country increased from 50,000 units in 2016 to 2.08 million in 2024. In comparison, global EV sales rose from 918,000 units in 2016 to 18.78 million units in 2024. In 2020, India’s EV penetration was about one-fifth of the global penetration, and by 2024 it reached over two-fifths of the global level. 

Electric mobility is among the bright spots in energy transition, said Akshit Bansal, chief executive officer and founder of Statiq, which runs an EV charging network. “Last year, EV penetration was like two-and-half per cent, and this year it is four-and-half per cent. That’s an inflexion point in my view, and beyond what we expected.” 

“The entire sector is booming, and so are the EV charging stations. The utilisation has already doubled, which is also making the [charging] business more viable. It’s a chicken-and-egg problem for vehicles and chargers. I think it’s a very positive trend,” said Bansal. 

He attributed the momentum to subsidies, regulations and falling battery costs. “Battery prices have decreased 90 per cent over the last decade, and there’s a trend for it to fall further. We also see more options of these vehicles to the end consumer, and there’s a great adoption from the consumers as well,” he said. 

Government policies such as the Faster Adoption and Manufacturing of Hybrid & Electric Vehicles scheme (popularly known as FAME), production-linked incentives for advanced chemistry cells, and various state-level EV policies highlight the focus on promoting clean mobility in India. With declining battery costs and the expansion of charging infrastructure, the electric mobility sector is expected to grow in scale and contribute to the country’s broader energy transition objectives, according to a NITI Aayog report. These measures align with India’s long-term climate commitments, including achieving net-zero emissions by 2070, reducing emissions intensity by 45 per cent by 2030, and reaching 50 per cent electric power capacity from non-fossil fuel sources, in line with its Paris Agreement targets, the report said. 

Commenting on trends, Bansal said: “The question is not about when fossil fuels will decline; the question is how fast and how well we can build this infrastructure to make sure we are energy independent as a country.” 

Policy is central to sustaining the momentum in the RE transition and it must be stable, said Ramanuj Kumar, partner at law firm Cyril Amarchand Mangaldas. “On the EV front, they attract 5 per cent GST currently — any increase in that rate would be a demand deflator. There is a longer runway required for encouraging EV adoption, and the tax policy support currently in place should continue.” 

He called for public transport to be given more attention. “The solution must also focus on public transport, besides personal transport,” he said. “The policy should incentivise EV-charging platforms.” 

Future of mobility 

Alok Kumar, the former power ministry secretary, reinforced the case for electric mobility. 

“We have done wonders in Railways as they are getting completely electrified. India’s future lies in electric mobility.” 

While EVs are scaling up, panellists warned against complacency in technology development and financing. 

“We are still a lot more dependent on foreign technology and foreign resources,” said Ramanuj Kumar. He suggested a 

national technology mission for energy transition, facilitated by the government and involving institutions like Indian Institutes 

of Technology. 

For progress in green hydrogen, he urged policymakers to avoid repeating certain practices in RE infrastructure. “We import 80 per cent of our solar modules and wind turbines. If we really want to succeed in green hydrogen, we need to create the value chain within India and have home-grown solutions rather than staying dependent on foreign resources.” 

Emphasising the need to decrease the cost of capital, Ramanuj Kumar said financing projects should reflect carbon intensity. “There is a need and an occasion to differentiate between fossil-fuel based and non-fossil fuel-based projects. Projects with higher emissions and resource intensity should demand a higher rate of interest, while low-carbon projects should demand a lower rate.” 

Bansal wanted the country to tackle finances  in the RE transition: “I agree that the cost of capital needs to come down. We also need to focus on having the whole tech stack built in India, and we should also focus on the efficiency of the operations of power distribution companies, because they are the enablers and catalysts for the EV charging ecosystem and EV revolution to come in.” 

Taken together, the summit’s discussion pointed to a complex reality. Fossil fuels will remain part of India’s energy mix for decades, but their share will decline steadily as renewable energy, efficiency measures, and electrified transport gain traction. The challenge for India, then, is not only to expand clean energy but also to manage a just, affordable, and technologically feasible transition – one that secures supplies, builds domestic capability, and lowers emissions.