In News:

India’s renewable energy journey has evolved from an era of rapid capacity expansion to one focused on creating a stable, resilient, and system-integrated clean energy ecosystem. With a target of 500 GW of non-fossil capacity by 2030, the country is moving from quantity to quality—shifting from mere capacity addition to building institutional, technical, and infrastructural strength capable of sustaining long-term decarbonisation.

Progress and Current Landscape

Over the past decade, India’s renewable energy capacity (excluding large hydro) has grown from around 35 GW in 2014 to over 197 GW in 2025, making it one of the world’s fastest-growing clean energy markets. The country continues to add 15–25 GW annually, driven by solar, wind, and hybrid installations. However, this phase of “rapid expansion” has revealed structural challenges — inadequate grid capacity, financing gaps, and the need for skilled manpower — necessitating a pivot toward “capacity absorption” and system integration.

From Speed to System Strength

The Ministry of New and Renewable Energy (MNRE) has emphasized that India’s renewable growth story is entering a new phase centered on system reliability, grid integration, and financial discipline. The focus now lies in synchronising renewable generation with transmission infrastructure, market mechanisms, and energy storage.

India’s grid is being reimagined through a ?2.4 lakh crore Transmission Plan for 500 GW, connecting renewable-rich states like Rajasthan, Gujarat, and Ladakh with industrial and urban demand centers. The Green Energy Corridors and planned High Voltage Direct Current (HVDC) transmission lines are expected to unlock over 200 GW of new capacity. The CERC’s 2025 General Network Access (GNA) regulations, introducing dynamic “solar-hour” and “non-solar-hour” access, will further optimise grid use and reduce congestion.

Building Institutional and Human Capacity

Capacity building in renewable energy involves strengthening human, institutional, and technical systems to manage grid variability, storage integration, and emerging technologies like offshore wind and green hydrogen. Institutions such as the National Institute of Solar Energy (NISE) and State Nodal Agencies (SNAs) are training engineers and regulators, while international collaborations with IRENA and GIZ are enhancing India’s technical knowledge base.

At the policy level, reforms such as Production-Linked Incentive (PLI) schemes for solar modules, domestic content requirements, and duties on imported cells are deepening India’s manufacturing ecosystem, reducing import dependence, and enhancing competitiveness.

Innovation and Market Mechanisms

India’s renewable transition is increasingly driven by hybrid projects, Round-the-Clock (RTC) renewable energy, battery energy storage systems (BESS), and Virtual Power Purchase Agreements (VPPAs). These innovations ensure dispatchable power, attract private capital, and strengthen market-based renewable trading. Additionally, the National Green Hydrogen Mission is linking renewables to industrial decarbonisation, while distributed solar and agrovoltaic projects under PM Suryaghar and PM KUSUM are expanding rural participation in the clean energy transition.

Challenges and the Way Forward

India faces challenges including skill shortages, limited training infrastructure, financing constraints, and coordination gaps among multiple agencies. Rapid technological evolution demands continuous upskilling and institutional flexibility. Financial reforms, transmission readiness, and greater private sector participation will be key to sustaining the current momentum.

Conclusion

India’s renewable energy story is maturing—from a race for capacity to a strategy for endurance. Policy focus has shifted from expansion to integration, ensuring that the next growth phase is more stable, dispatchable, and sustainable. By aligning infrastructure, innovation, and institutions, India is laying the foundation for a resilient 500 GW clean energy system by 2030, driving its march toward Viksit Bharat and global climate leadership.

Why is it in the News?

In recent years, the combination of unpredictable weather patterns and rapid economic growth has resulted in significant spikes in electricity demand, posing a challenge to reliably meet the escalating requirements.

Background:

• India has grappled with the looming threat of electricity shortages in recent years, particularly exacerbated by rising temperatures amplifying the power demand.
• While discussions on this matter typically revolve around the deficit in domestic thermal coal and the need for imports, a more thorough investigation uncovers intricate challenges concerning logistics and regulatory interpretation.
• Therefore, it is imperative to delve into these dimensions, shedding light on the complexities of the situation and seeking solutions to tackle the root causes.

What are the Primary Causes of Domestic Thermal Coal Shortages?

• Transportation Infrastructure Deficiencies: A critical challenge lies in the inadequacy of transportation infrastructure, notably the railway network, which predominantly facilitates coal transportation across India.
  • Despite substantial coal production, the limited capacity of railways often hampers timely delivery to power plants, contributing to delays and inefficiencies in the coal supply chain.
• Geographical Disparities: Complicating matters, the distribution of coal mines and power plants across diverse regions adds another layer of complexity to logistics.
  • Power plants situated far from coal mines encounter heightened logistical hurdles, facing difficulties in securing a consistent coal supply due to increased transportation time and costs.
• Storage and Handling Limitations: Insufficient storage and handling infrastructure at both mines and power plants exacerbate challenges in managing demand and supply fluctuations.
  • Inadequate storage capacity can lead to stockpiling issues, exacerbating delays and hindering efficient coal delivery.

Balancing Alternative Domestic Sources and Imports:

• Exploration of Alternative Domestic Sources: While alternative coal sources, like auctions organized by Coal India Ltd., present a viable domestic option, they often receive less attention compared to imports.
  • These auctions enable power plants to procure coal domestically, albeit potentially at higher prices, yet remain overlooked in favor of imported coal.
  • However, auctions offer a feasible alternative, particularly for plants not hindered by logistical constraints in accessing coal from auction sites.
• Narrow Focus on Imports: The discourse tends to prioritize imports as the default solution for coal shortages, neglecting the potential of domestic alternatives and failing to consider the broader implications of heavy reliance on imported coal.
• Cost Implications: Importing coal entails additional costs, including transportation, handling, and import duties, resulting in higher variable costs for coal-based electricity.
  • These expenses are often transferred to consumers through elevated electricity tariffs, burdening both households and industries.
• Regulatory Interpretation: Misinterpretation of Ministry of Power advisories recommending coal imports as mandates further blur the distinction between alternative sources and imports.
  • While these advisories may propose importing a certain percentage of coal, they should not be perceived as obligatory requirements but rather as guidelines to be tailored to each power plant's unique circumstances.
• Less Emphasis on Domestic Procurement Enhancement: The emphasis on imports sidelines opportunities to improve domestic coal procurement and distribution processes.
  • Addressing logistical hurdles and streamlining administrative procedures could enhance the efficiency and reliability of India's domestic coal supply chain, potentially reducing the reliance on costly imports.

Regulatory Frameworks Influencing Responses to Electricity Shortages and Coal Procurement Strategies:

• Clarifying Advisory Interpretations: An ongoing challenge in regulatory considerations involves clarifying interpretations of advisories from government entities like the Ministry of Power.
  • While these advisories may offer recommendations for addressing coal shortages, particularly through import suggestions, they should not be misconstrued as mandates.
  • Misinterpretation can lead to unnecessary costs and burdens on consumers, as power plants may feel compelled to comply with import recommendations, disregarding potentially viable domestic alternatives.
• Forward-Thinking Regulatory Decision-Making: Regulatory bodies overseeing electricity generation and distribution must adopt a forward-thinking approach to decision-making.
  • This entails comprehensive assessments of regulatory measures' implications on stakeholders, including consumers, power producers, and distribution utilities.
  • Analysis should weigh the costs and benefits of various coal procurement strategies, encompassing factors like transportation costs, import duties, and environmental impacts.
• Customized Approaches for Diverse Plant Settings: Recognizing the varied challenges among power plants regarding coal shortages, regulatory bodies should tailor measures to each plant's specific circumstances.
  • Pit-head plants, closer to coal mines, may have easier access to domestic coal and encounter fewer logistical constraints compared to plants situated farther away, necessitating heavier reliance on imports.
  • Regulatory interventions should thus be nuanced and adaptable rather than uniformly applied.
• Balancing Cost-Efficiency and Reliability: Regulators face the critical task of balancing cost and reliability in electricity supply.
  • While imports may offer prompt solutions to coal shortages, they incur substantial costs affecting consumers.
  • Therefore, regulators must meticulously evaluate the potential cost savings of domestic procurement against the reliability and security of imported coal supply, ensuring transparency and equity in decision-making.
• Long-Term Planning and Sustainability Integration: Regulatory considerations should encompass long-term planning and sustainability objectives alongside immediate coal shortage mitigation.
  • While addressing immediate needs is crucial, regulators must also contemplate the broader ramifications of coal procurement strategies on energy security, environmental sustainability, and renewable energy transition.
  • This necessitates a forward-looking approach aligning short-term actions with long-term sustainability objectives, facilitating India's transition to a resilient and sustainable energy framework.

Conclusion

Addressing electricity shortages in India necessitates a nuanced approach that considers both logistical hurdles and regulatory complexities. While importing coal may offer a temporary solution, it does not tackle the fundamental logistics inefficiencies. India can better navigate the challenges of power generation by addressing root causes and implementing tailored solutions, ensuring a more effective response to evolving weather patterns and increasing demand for electricity