General Studies IIIEnergy

Renewable energy in India


India has achieved its target of achieving 40% of its installed electricity capacity from non-fossil energy sources by 2030 in November 2021.

About Renewable energy in India:

  • India is world’s 3rd largest consumer of electricity and world’s 3rd largest renewable energy producer with 38% (136 GW out of 373 GW) of total installed energy capacity in 2020 from renewable sources.
  • Ernst & Young’s (EY) 2021 Renewable Energy Country Attractiveness Index (RECAI) ranked India 3rd behind USA and China.
  • In 2016, Paris Agreement’s Intended Nationally Determined Contributions targets, India made commitment of producing 50% of its total electricity from non-fossil fuel sources by 2030.
    • In 2018, India’s Central Electricity Authority set a target of producing 50% of the total electricity from non-fossil fuels sources by 2030.
    • India has also set a target of producing 175 GW by 2022 and 500 GW by 2030 from renewable energy.
    • As of September 2020, 89.22 GW solar energy is already operational, projects of 48.21 GW are at various stages of implementation and projects of 25.64 GW capacity are under various stages of bidding.
  • In 2020, 3 of the world’s top 5 largest solar parks were in India
    • Including world’s largest 2255 MW Bhadla Solar Park in Rajasthan and
    • world’s second-largest solar park of 2000 MW Pavgada solar Park Tumkur in Karnataka and
    • 100MW Kurnool in Andhra Pradesh.
  • Wind power in India has a strong manufacturing base with 20 manufactures of 53 different wind turbine models of international quality up to 3 MW in size with exports to Europe, the United States and other countries.
  • India is the 5th globally for installed hydroelectric power capacity. As of 31 March 2020, India’s installed utility-scale hydroelectric capacity was 45,699 MW, or 12.35% of its total utility power generation capacity
  • As of November 2020, India had 10 nuclear reactors under-construction with a combined capacity of 8 GW and 23 existing nuclear reactors in operation in 7 nuclear power plants with a total installed capacity of 7.4 GW (3.11% of total power generation in India). Nuclear power is the fifth-largest source of electricity in India after coal, gas, hydroelectricity and wind power.
  • India imports 85% of petrol products with import cost of $55 billion in 2020-21, India has set a target of blending 20% ethanol in petrol by 2025 resulting in import substitution saving of US$4 billion or INR30,000 crore, and India provides financial assistance for manufacturing ethanol from rice, wheat, barley, corn, sorghum, sugarcane, sugar beet, etc.Ethanol market penetration reached its highest figure of a 3.3% blend rate in India in 2016.
    • Ethanol is produced from sugarcane molasses and partly from grains and can be blended with gasoline. Sugarcane or sugarcane juice may not be used for the production of ethanol in India. Government is also encouraging 2G ethanol commercial production using biomass as feed stock.
  • India initiative the International Solar Alliance (ISA) is now an alliance of 121 countries. India was world’s first country to set up a ministry of non-conventional energy resources (Ministry of New and Renewable Energy (MNRE) in early 1980s) . Solar Energy Corporation of India (SECI), a public sector undertaking, is responsible for the development of solar energy industry in India. Hydroelectricity is administered separately by the Ministry of Power and not included in MNRE targets.
  • The government has announced that no new coal-based capacity addition is required beyond the 50 GW under different stages of construction likely to come online between 2017 and 2022. As fossil fuels are depleting and creating more pollution causing global warming, and also since energy demand is increasing day by day, energy production from renewable energy resources becomes the best solution in present condition as renewable energy resources are not exhaustible, clean, and green energy.
    • Future targets

Target yearRenewable energy capacity target (GW)Comments
2030450Includes nuclear and large hydro power.
Set in 2019 at United Nations Climate Change conference,with 15 times solar and 2 times wind power capacity increase compared to April 2016 installed capacity.
2022175Excludes nuclear and large hydro power.
Includes 100 GW solar, 60 GW wind, 5 small hydro, 10 GW Biomass power, and 0.168 GW Waste-to-Power.

Benefits of renewable energy:

  • Opportunity for the private sector: PM indicated the possibility of a business of around $20 billion per year in the renewable energy sector. A target of setting up 450 GW of renewable energy sources by 2030 means that we need to augment the renewable energy capacity by almost 25-30 GW per year. This can be harnessed as a high return on investment opportunity by the private sector.
  • Low maintenance cost: As compared to the traditional sources of energy like coal-based or oil-based thermal power plants, solar energy has the advantage of almost no requirement of procurement of fuel as well as lesser wear and tear due to lack of movement of parts. Therefore, return on investment is higher in the long run.
  • Government incentives: Solar energy is a sustainable source of energy. Therefore, unlike thermal energy where the government policy is to penalise the usage, renewable energy will always be incentivised to invest additional resources and create more energy capacity.
  • Sustainability: Renewable energy is a cleaner source of pollution, thus, benefitting the environment in general and reducing pollution and the associated diseases in particular.
  • Atmanirbhar Bharat: Investment by the private sector in renewable energy would also be helpful in fulfilling the Government’s objective of self-reliance. It will also create employment opportunities in the country.
  • Last-mile connectivity: As renewable energy can also be decentralised, therefore, it is better placed to extend last-mile connectivity in remote areas, where it might not be financially feasible to stretch the main grid.  This is also economical for the government and households as decentralised connectivity decreases the Transmission and distribution losses.

Challenges of Renewable Energy in India:

  • Reliability: By their very nature, solar and wind energy are variable in availability both spatially as well as geographically. They are not available on-demand, unlike thermal or nuclear energy. Therefore they have to be supplemented with other sources of energy, to maintain the base load.
  • Creation of storage infrastructure: To overcome the variable nature of renewable sources of energy, it is vital to invest in affordable batteries of large capacity. This would require adequate commitment from the government side to inspire confidence in the private sector.
  • Funding: As already stated, renewable energy requires setting up large projects to harness the economies of scale. This requires a large initial investment, which can be a deterrent at the beginning of the project.
  • However, it has to be acknowledged that the newly set up projects have actually achieved and sometimes even overshot the per unit price parity in comparison to the thermal energy.
  • Building manufacturing capability: It is important to set up manufacturing capacity in India to decrease imports and promote Atmanirbhar Bharat. More manufacturing would also mean an increase in investments and additional employment generation in India.

Way Forward:

  • Long term Planning: Since renewable energy requires huge investment to achieve economies of scale, it is necessary to lay down policy direction well in advance so that the private sector can plan accordingly.  Frequent Surprises and changes in the policy are not appreciated by the private sector. The government should identify the geographical areas, integrate the grid, and focus on implementation at the ground level to inspire confidence in the businesses.
  • Variability matching: To match the variable demand and achieve maximum efficiency in energy utilisation, it is imperative to find the sectors having the largest energy consumption and match them with production sources.
  • For e.g. the agriculture sector needs to be incentivised to draw power at the off-peak hours, to offset the load of peak requirement in household and industry.
  • This will also have the benefit of rationalising the subsidy, without necessarily taxing the already-stressed agriculture sector.
  • Similarly, as the acceptability of electric vehicles increases, their charging time can be suitably allocated as per the requirement. This can be further incentivised by keeping tariffs lower than the peak time tariffs.
  • Experts have also suggested an alternative model where the storage infrastructure of Electric Vehicles (EVs) can be utilised by feeding the energy back to the grid at the peak hours, at pre-decided rates.
  • Geography matching of wind power can be used to solve the variability in its availability. For e.g. In some areas like coastal areas of southern states, the wind potential might be higher in the monsoon season, while in other areas like Ladakh, it might be higher in the winter season.


  • There can be no doubt about the fact that the renewable energy is the energy of the future. The current direction indicates the possibility of elimination of fossil fuels based energy as early as 2050. This will lead to a cleaner planet, greener planet and make the earth a better place to live in. However, it is important that we have a clear policy guideline, wherein we explore the right mix of energy sources, integrated into the grid to achieve maximum efficiency.

Initiatives Taken
PM-KUSUMIt was launched by the Ministry of New and Renewable Energy (MNRE) to support installation of off-grid solar pumps in rural areas and reduce dependence on grid, in grid-connected areas.
Production Linked Incentive (PLI) SchemeProduction Linked Incentive Scheme “National Programme on High Efficiency Solar PV Modules” was introduced with an outlay of Rs. 4500 crores to support and promote manufacturing of high efficiency solar PV modules, including the upstage vertical components like cells, wafers, ingots and polysilicon in India and thus reduce the import dependence in Solar PhotoVoltaic (PV) sector.
Solar Parks SchemeTo facilitate large scale grid connected solar power projects, a scheme for “Development of Solar Parks and Ultra Mega Solar Power Projects” is under implementation with a target capacity of 40 GW capacity by March 2022.
Roof Top Solar programme Phase-IIIt provides for financial assistance of upto 4 GW of solar roof top capacity to the residential sector and there is a provision to incentivise the power distribution companies for incremental achievement over the previous year.
Central Public Sector Undertaking (CPSU) SchemeA scheme for setting up 12 GW Grid- Connected Solar PV Power Projects by Central Public Sector Undertakings with domestic cells and modules is under implementation. Viability Gap Funding support is provided under this scheme.
Hydrogen MissionThe Prime Minister announced the launch of the National Hydrogen Mission and stated the goal to make India a global hub for Green Hydrogen production and export.
International Solar AllianceThe ISA is an intergovernmental treaty-based organisation with a global mandate to catalyse solar growth by helping to reduce the cost of financing and technology. Recently, the United States of America has become the 101st member country to join the ISA.
OSOWOGThe OSOWOG was jointly released by India and UK at the COP26 Climate Meet in Glasgow.
National Wind-Solar Hybrid PolicyThe main objective of the National Wind-Solar Hybrid Policy, 2018 is to provide a framework for promotion of large grid connected wind-solar PV hybrid systems for optimal and efficient utilization of wind and solar resources, transmission infrastructure and land.
National Offshore Wind Energy PolicyThe National Offshore wind energy policy was notified in October 2015 with an objective to develop the offshore wind energy in the Indian Exclusive Economic Zone (EEZ) along the Indian coastline of 7600 km.
Other Renewables for Power GenerationProgramme on Energy from Urban, Industrial and Agricultural Wastes/ResiduesScheme to support Promotion of Biomass based cogeneration in sugar mills and other industriesBiogas Power (Off-Grid) Generation and Thermal application Programme (BPGTP)New National Biogas and Organic Manure Programme (NNBOMP)

Source: PIB

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