BS Infra Summit: 'Fossil fuels to remain vital as renewables face hurdles'

At the Business Standard Infrastructure Summit 2025, experts said fossil fuels will remain critical to India's energy mix due to gaps in storage, transmission and foreign tech reliance

Fossil fuels will continue to play a significant role in India’s energy mix despite an accelerated push for renewables, as challenges in renewable integration, reliance on foreign technology, and gaps in storage and transmission infrastructure remain key roadblocks in India’s energy transition, experts said at the Business Standard Infrastructure Summit 2025 on Wednesday.

 

Alok Kumar, former power secretary, said fossil fuels cannot be stamped out in the near term, though their share will decline gradually.

 

“Renewable energy has several challenges, including imports of capital goods and complexities in integration. We should also focus on greening the process of fossil fuel production, coal refineries can use green hydrogen, mines can electrify their equipment, while investing in technologies like ultra-supercritical generation and coal gasification,” Kumar told Business Standard’s Sudheer Pal Singh during a panel discussion.

   

Mani Khurana, senior energy specialist at the World Bank, stressed that India has focused heavily on renewable energy generation but neglected transmission.

 

“Integration of renewable energy requires storage plants and batteries, but transmission has slowed down. Investment in transmission and storage is critical if we want to get this energy to the consumer,” she said.

 

On the electric mobility front, Statiq CEO Akshit Bansal pointed to a booming EV ecosystem including an increasing number of charging stations, aided by falling battery prices and rising consumer adoption.

 

“The question is not whether fossil fuel use will decline, but how fast we can build the infrastructure and ecosystem to ensure energy independence and electrification,” he said.

 

Highlighting policy and financing challenges, Ramanuj Kumar, partner at Cyril Amarchand Mangaldas, said India must reduce dependence on foreign technology in its energy transition.

 

“We need a national technology mission for energy transition. There needs to be a coalition between the leading Indian Institutes of Technology (IITs), facilitated by the government,” he said.

 

Commenting on the ways to decrease the cost of capital, Kumar suggested that lending norms should distinguish between fossil fuel-based and clean energy projects by factoring in their energy, emission, land, and water intensity.

 

Projects with higher carbon and resource footprints should attract higher borrowing costs, while low-emission, low-resource projects should benefit from cheaper financing, he said.  Such a framework would help bring down the cost of capital for energy transition projects and incentivise greener investments over traditional ones, he added.