India’s Renewable Energy Landscape: A Journey Towards Sustainability 

India stands at a transformative juncture, poised to lead the global transition towards a sustainable, low-carbon energy future. With a population projected to grow by over a quarter billion people by 2070 and an economy anticipated to expand from USD 3 trillion in 2023 to around USD 27 trillion by 2070 (as per the Climate Policy Initiative), the energy demand is set to soar significantly. Despite currently having per capita energy consumption at just one-third of the global average, India’s economic and developmental trajectory necessitates a robust and sustainable energy strategy. 

Recognizing the critical need to address climate change, India has pledged to achieve net-zero emissions by 2070. This ambitious commitment is supported by a series of intermediate goals for 2030: 

As India progresses, it is rapidly emerging as a global leader in renewable energy, marked by substantial growth in capacity expansion and aggressive tendering for new projects.

India’s Accelerated Capacity Additions 

In the fiscal year 2023-2024, renewable energy (RE) contributed over 70% of the 26 GW of new power capacity added in India. The country’s total installed energy capacity now stands at 442 GW, with renewable energy accounting for 33% (144 GW) and hydro contributing an additional 11% (47 GW), according to the CEEW Centre for Energy Finance (CEEW-CEF). Notably, coal’s share in India’s installed capacity fell below 50% for the first time. 

Solar energy has been the driving force behind this growth, contributing 81% (15 GW) of the total renewable capacity added in FY24, encompassing both grid-scale and rooftop installations. Wind capacity also witnessed a notable increase, nearly doubling from 2.3 GW in FY23 to 3.3 GW in FY24. Reflecting India’s ambitious renewable energy goals, auctions for renewable capacity reached an all-time high of 41 GW in FY24.

Union Budget 2024-25: Empowering Green Growth 

The Union Budget, presented by Finance Minister Nirmala Sitharaman, emphasized the theme of “green growth” with a range of initiatives designed to bolster India’s renewable energy sector: 

• Pradhan Mantri Suryodaya Yojna: Aims to install solar panels on 1 crore houses, providing up to 300 units of free electricity per month to these households. This initiative not only promotes renewable energy but also offers substantial financial relief to families. 

• Climate Finance Taxonomy: The government will develop a taxonomy to enhance access to capital for climate adaptation and mitigation projects. 

• Energy Efficiency in MSMEs: Investment-grade energy audits will be conducted for traditional micro and small industries across 60 clusters, with financial support to shift towards cleaner energy and implement energy efficiency measures. 

• Customs Duty Reduction: Duties on certain capital goods used in manufacturing solar photovoltaic cells and modules have been reduced from 7.5% to nil, effective immediately. 

• Transitioning Heavy Industries: A roadmap will be formulated to move hard-to-abate industries from energy efficiency targets to emission reduction targets, including the implementation of the Indian Carbon Market. 

• Key Allocations: The budget allocated Rs 851 crore for wind and other renewable energy initiatives and Rs 600 crore for the National Green Hydrogen Mission.

Decarbonizing Heavy Industries: A Critical Imperative 

Despite rapid renewable energy growth, industries remain the largest energy-consuming sector in India, emitting 920 million tonnes of CO2 annually. Steel, cement, aluminum, petrochemicals, and ammonia industries alone account for 70% of industrial emissions, with steel and cement industries contributing 18% of the country’s total emissions. 

This underscores a significant opportunity for decarbonization through green electrification. In 2022, these industries consumed 175 TWh of electricity, constituting 11% of their total energy use. By 2030, electricity demand in heavy industries is projected to rise by 45%, reaching 253 TWh. Meeting this demand with renewable energy will require the addition of approximately 120 GW of renewable capacity, potentially reducing carbon emissions by 180 million tonnes. 

Advanced electrification technologies powered by renewable energy could slash industrial CO2 emissions by 37% (737 million tons) by 2050. This transition would not only align with India’s climate goals but also stimulate the clean energy sector, fostering investments, power-to-fuel technologies, and job creation.

Unlocking the Potential of Battery Energy Storage Systems (BESS)

As solar and wind capacities expand, Battery Energy Storage Systems (BESS) will play a crucial role in stabilizing the grid, managing peak loads, and ensuring a seamless energy transition. India’s BESS ecosystem is poised for substantial growth, with potential funding opportunities estimated at ₹3.5 lakh crore and medium-term investments of ₹80,000 crore focused primarily on cell manufacturing. 

Key Benefits of BESS: 

• Grid Stability: Ensures consistent electricity supply and provides backup during outages. 

• Reduced Grid Dependency: Offers a steady energy supply, reducing vulnerability to power outages and price fluctuations. 

• Uninterrupted Power Supply: When paired with a UPS, guarantees essential equipment operates seamlessly during power failures. 

• Environmental Impact: Stores surplus energy from renewable sources like solar and wind, reducing greenhouse gas emissions and dependency on fossil fuels. 

• Cost Efficiency: Lowers energy costs by storing electricity during low-price periods and utilizing it during peak demand. 

Supportive policies such as waived ISTS transmission fees and stringent RPO/ESO requirements are expected to drive demand across the BESS value chain, fueling project development, cell manufacturing, and component production over the next decade.

Conclusion

India’s renewable energy sector is gaining unparalleled momentum, driven by the collective efforts of the government, private enterprises, and local communities. The progress achieved in FY2024 underscores the country’s determination to become a global renewable energy leader. While challenges persist, the ambitious policies, technological advancements, and collaborative spirit promise a greener, more sustainable energy future for India. With the groundwork laid for a robust BESS ecosystem and decarbonization of heavy industries, India’s journey towards net-zero emissions by 2070 is well underway. 

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