India’s energy transition path is fuelled by its dual goals of environmental sustainability and economic prosperity, placing it at a pivotal juncture of necessity and aspiration. The country aims to reshape its energy landscape by striking a balance between the demands of decarbonisation and the rising energy consumption of its citizens as it confronts the pressing concerns of climate change. In order to establish India as a global leader in sustainable energy while preserving its developmental goals, this revolutionary change will necessitate the growth of renewable energy, creative policies, and multisectoral cooperation.

Given the population’s heavy reliance on agriculture, India, a nation susceptible to climate change, must make sure that the effects on agriculture, bioresources, and natural habitats are minimised. India has set lofty goals under its “Panchamrit” framework as part of its Nationally Determined Contributions under the United Nations Framework Convention on Climate Change, and it is on course to reach its 2030 goals.

India’s renewable energy capacity increased from 24 GW in 2014–15 to 136 GW in 2024–2025, a fivefold increase. From 78 GW (29% of total capacity) in 2014–15 to 199 GW (45% of total capacity) in 2023–24, non-fossil fuel-based capacity has grown. By 2030, the nation is expected to reach its 50% non-fossil fuel goal. Furthermore, by 2030, India hopes to have 500 GW of non-fossil fuel-based power generation capacity. Approximately 135 GW of generating capacity are now being built or developed in the nation. This goal is likely to be accomplished at the current rate. India has also made significant progress towards its NDC objective of a 45% reduction by 2030, reducing its emissions intensity by 40% from 2005 levels.

Decarbonisation and India’s energy transformation are intricate processes for which there is no one-size-fits-all answer. Current policies and activities concentrate on creating essential building blocks, but specific pathways will change over time. These include blending biofuels, requiring enterprises and DISCOMs to acquire renewable energy, adopting market-based tools like carbon trading systems, and generating demand for the energy transition by making competitive green power more accessible. Additionally, emphasis is placed on policy and financial assistance for emerging technologies, including battery storage, offshore electricity, and green hydrogen. In order to guarantee competitive energy supply, economic resilience, and energy independence, production-linked incentives also seek to establish a local supply chain through financial assistance. It is still crucial to concentrate on base load electricity, especially by increasing the proportion of nuclear energy capacity. The financial commitment to the energy transition is further shown by measures that encourage capital flow for energy, such as green bonds, green deposits, and ideas on green taxonomy.

India has successfully implemented renewable energy, and utilities and open access customers are being progressively compelled to obtain a larger percentage of their electricity from renewable sources. The modest 2-5% requirement has increased to around 30% today. At the same time, India is working to increase its current 22,480 megawatt (MW) nuclear capacity by 2031–2022, which will provide decarbonised base load power. “Nuclear energy is expected to form a significant part of the energy mix for Viksit Bharat,” the Indian Finance Minister stressed in the country’s most recent budget. Although the nuclear energy industry is under state control, foreign investment is allowed in nuclear power plant equipment manufacture and material supply.

Despite India’s ambitious move to increase its share of renewable energy sources, coal still accounts for 59% of the country’s primary energy supply in 2023. India will probably continue to rely on coal for the foreseeable future in order to meet its energy needs, given the dramatic increase in energy demand. The nation has set aggressive coal production targets to meet this need, with plans to increase output to 1.5 billion tonnes by 2030 from 1.31 billion tonnes by FY25.

In India, the road transport sector alone is responsible for 87% of the country’s total greenhouse gas emissions, making up 18% of the total. By 2030, India will require over 200 million tonnes of oil equivalent energy supply annually to meet its transportation needs if the current consumption trend continues. Measures like encouraging electric vehicles (EVs), combining biofuels with petroleum products, and electrifying Indian Railways by gradually switching from diesel to electric traction are all part of the energy transition being undertaken in this sector.

Significant progress has been made in bioethanol in addition to renewable energy in India. Oil marketing corporations are required by the Government of India’s 2018 National Policy on Biofuels to incorporate 20% ethanol from agricultural inputs into petrol by 2030. In order to facilitate this, the government sets the price at which oil marketing corporations purchase ethanol and provides financial incentives for the establishment of ethanol manufacturing facilities in India. Similarly, starting in FY 2024–2025, the Ministry of Power requires Thermal Power Plants (TPPs) to co-fire 5% biomass.

Building on these successes, our most recent research, Energy Transition: India’s Journey to Net Zero, recommends combining compressed biogas (CBG) with piped natural gas for home usage and compressed natural gas for transportation. CBG blending requirements will be optional until FY 2025, but they might then be required. For aviation fuel, similar concepts are under consideration. A recent government announcement suggests that by 2027, foreign flights could be subject to a 1% objective for sustainable aviation fuel mixing.