Running on clean hopes, dirty fuel: India's renewable plans face key risks

India's renewable plans read bold, but shortfalls in generation, grid gaps, and sluggish execution risk dimming the big switch

The recent landmark ruling by the International Court of Justice on emission reduction served as a wake-up call for the developed world, led by the US, but it also sent a clear message to China and India. Together, these three countries were responsible for 53 per cent of carbon dioxide emissions from energy use in 2024, according to the Energy Institute (EI) Statistical Review of World Energy.

 

China remains the world’s largest emitter of greenhouse gases (GHG), accounting for roughly a third of global emissions, followed by the US and India. China and India contributed to 62 per cent of last year’s global emissions increase, with India seeing the fastest rise among major economies — over 4 per cent year-on-year. China’s emissions growth slowed to 1.2 per cent, while the US saw a marginal decline of 0.8 per cent, according to a report by UK think tank EI, in collaboration with consultants Kearney and KPMG.

 

Given its rapidly rising emissions, India may need to hit the accelerator on renewable energy. Earlier this month, Minister of New and Renewable Energy Pralhad Joshi said, “In a world seeking climate solutions, India is showing the way by achieving 50 per cent non-fossil fuel capacity five years ahead of the 2030 target.”

 

Of India’s 484.8 gigawatt (Gw) total installed capacity, 242.8 Gw now comes from renewable or low-carbon sources, according to the ministry.

 

But India has long maintained a relatively high share of non-fossil fuel capacity. Back in 2005, when climate change first gained global attention and 197 countries ratified the Kyoto Protocol, non-fossil sources already played a major role. By 2009, nuclear, hydro, and wind accounted for about 52 Gw, or 35 per cent of India’s 147 Gw installed capacity. 

 

Despite recent progress, the current rollout of renewables may still be too sluggish to counter India’s rapid emissions growth, experts say.

 

India’s carbon emissions rose 4.1 per cent in 2024 — the highest among major economies — 4x the global average and over 3x China’s.

 

Underscoring the urgency of more ambitious targets, Disha Agarwal, an analyst at the Council on Energy, Environment and Water (CEEW), said, “India will need additional resources to avoid major power shortages as early as 2027–28. Adding another 100 Gw of renewable energy capacity by 2030 — beyond the stated 500 Gw target — would be the most cost-effective pathway, bringing the greatest environmental and social benefits.” These projections exclude the separate 125 Gw required for a green hydrogen ecosystem.

 

Based on CEEW’s projections, India would need to install another 500 Gw of non-fossil fuel capacity on top of the existing 240 Gw — meaning around 75 per cent of India’s power mix should come from non-fossil sources by 2030, according to calculations by Business Standard based on Central Electricity Authority data. That includes factoring in about 35 Gw of coal-based power under construction. India’s current coal-fired capacity stands at roughly 221 Gw.

 

Why does this matter? 

 

Because in the decade to 2024, India’s total energy supply rose 4 per cent to 39 exajoules (EJ), while its economy added $2 trillion in GDP — reaching $3.9 trillion — showing how tightly energy and emissions are woven into India’s growth story. By comparison, China’s energy supply grew 3.1 per cent to 159 EJ, with its economy expanding by $8.3 trillion. The US added $11.6 trillion in GDP, while its energy supply shrank slightly by 0.1 per cent, based on data from the EI and the International Monetary Fund.

 

But all this talks only about capacity 

 

Delhi’s sulphur-laced air won’t clean itself by simply adding more gigawatts on paper. What matters is how much of that capacity generates power. “Generation capacity doesn’t equate to actual generation,” said Sanchit Makhija, partner at global consultancy Kearney.

 

In 2024, renewables contributed 6 per cent of the total energy supply in the US and China, at 5.8 and 9 EJ, respectively. India’s figure was just 1.2 EJ, or 3 per cent. Coal still supplied 57 per cent of India’s total energy needs.

 

Globally, renewables, including hydro, met 32 per cent of electricity demand last year. In India, that share was only 20 per cent. Over the past decade, coal’s share in China’s electricity mix dropped from 70 per cent to 58 per cent, driven by unprecedented renewable expansion. In India, coal’s share has stayed at about 75 per cent — meaning thermal remains dominant, EI Institute data showed.

 

“Installed capacity is a strong indicator of intent; actual generation depends on grid integration, storage, and despatchability — areas still evolving,” said Sanjeev Aggarwal, founder and chairman of Hexa Climate.

 

Smaller countries have been more agile in adopting clean fuels. 

 

Iceland, Bhutan, and Norway have already decarbonised most of their energy systems (85 per cent, 80 per cent, and 52 per cent, respectively), while Albania, Ethiopia, and Iceland have hit 100 per cent renewable power in their generation fleet.

 

Renewable sources have lower utilisation rates, requiring more capacity to meet the same demand, Makhija pointed out. “Even with a 500 Gw target of non-fossil fuel sources by 2030, we’re only halfway there,” said Vibhuti Garg, director for South Asia at the Institute for Energy Economics and Financial Analysis.

 

India would need to add 45 Gw a year to hit the 2030 target; for 700 Gw, that jumps to 90 Gw annually — a pace experts say is needed to match rising power demand and clean the country’s air.

 

To put it in context: China added over 90 Gw of renewables in a single month — May 2025 — 3x what India installed in all of 2024. China added 244 Gw of solar and wind in the first five months of 2025 alone — roughly equal to India’s entire non-fossil fuel capacity built since Independence. In 2024, China’s renewable additions were double that of the US, Europe, and India combined, accounting for 57 per cent of global renewable supply growth.

 

India has some ground to cover 

 

In 2024–25, a record 32 Gw of non-fossil capacity and 22 Gw of renewables was added in the first half of 2025, driven in part by an expiring incentive on interstate transmission charges, according to Rystad Energy. However, 10–15 Gw worth of capacity remains stalled due to delays in power purchase agreements (PPAs), industry insiders said. The Sustainable Projects Developers Association also said in a recent note to the government that around 50 Gw of renewable capacity tender awards are stuck for lack of PPAs.

 

“The focus must now shift from just megawatts installed to megawatt-hours delivered reliably,” Aggarwal said. “Reaching 500 Gw by 2030 will require steady investment in firm, despatchable renewables like round-the-clock solar-wind hybrids with storage.”

 

Progress is also being held back by funding gaps, IEEFA’s Garg observed. 

 

India’s current annual investment in renewable energy of around $11 billion is far short of what’s needed. “Meeting current government targets requires $293 billion in total. Aligning with global climate goals would push that up to $394 billion,” Garg said.

 

Renewable installations have also been bogged down by regulatory backtracking and infrastructure bottlenecks. “Many solar and wind plants are underperforming due to shifting client patterns and suboptimal operation and maintenance,” Makhija said. Add to that transmission issues: the stop-start nature of renewables is stressing national and state grids, and new grid connection grants have been delayed.

 

These challenges loom large as India, now the world’s third-biggest emitter, prepares to submit its updated nationally determined contribution by October to the United Nations Framework Convention on Climate Change. This will set clean energy targets for 2035 and outline emission cuts.

 

R R Rashmi, senior Distinguished Fellow at The Energy and Resources Institute and former climate negotiator for India, said targets matter but must be aligned with development goals, as India is still building out its economy.

 

“Targets in isolation don’t mean much. It’s a mix of having enough demand and transmission capacity to offtake non-fossil fuel capacity,” Makhija said. “We need demand, transmission, and clean generation rising in tandem to bring down dependence on thermal power.”