The Aakhya Weekly #157 | What 50% Non-Fossil Means for India
In Focus: Balancing the Grid, Building the Future
India reached a monumental milestone in July 2025. Of the country’s total installed power generation capacity, which is approximately 484.2 GW, an impressive 50%, or about 242.2 GW, now comes from non-fossil fuel sources. What does that mean in practical terms? For starters, it signals a significant comeback for clean energy. Despite missing its 2022 renewable energy target of 175 GW, India has managed a strong turnaround.
This achievement directly aligns with India’s Nationally Determined Contribution (NDC) under the Paris Agreement, where the country committed to achieving 50% non-fossil fuel-based installed capacity by 2030. The best part? India reached that target five years ahead of schedule. In terms of the non-fossil energy mix, it consists of almost 234 GW from renewables such as solar, hydro, and wind power, along with 8.78 GW from nuclear energy.
So, all sunshine and rainbows? Not quite. While 50% of installed capacity is non-fossil, the actual electricity generation still leans heavily on fossil fuels, particularly coal, which accounts for nearly 70% of the power produced. And let’s not forget the bigger goal: at COP26, Prime Minister Narendra Modi announced India’s intention to reach 500 GW of non-fossil fuel capacity by 2030. Therefore, while this is a strong step forward, it’s still only halfway to the ultimate destination.
Solar Energy: Bright Potential, Lingering Hurdles
Let’s begin with solar energy. As of 2025, India has an impressive installed solar power generation capacity of about 105.65 GW. While the nation did fall short of its 2022 renewable energy target, it has since implemented a range of policies aimed at developing a more inclusive and sustainable energy landscape. Some key initiatives include the Pradhan Mantri Kisan Urja Suraksha evam Utthaan Mahabhiyan (PM-KUSUM) scheme, which provides financial support to farmers for installing solar pumps and grid-connected solar plants, and the Solar Park Scheme, which facilitates the development of large-scale solar installations. Yet, challenges remain. India still relies heavily on imported solar modules and components, particularly from China, making the sector vulnerable to global supply chain disruptions and price volatility. While the Production-Linked Incentive (PLI) scheme has begun to strengthen domestic manufacturing, self-reliance in the definitional sense is still some distance away.
Then there’s the challenge of grid integration. Transmission bottlenecks, limited storage capacity, and an inflexible grid make it difficult to manage the variability of solar power, especially during peak sunlight hours. Meanwhile, the rooftop solar segment continues to struggle. The adoption among residential and small commercial users remains inconsistent due to high upfront costs, low awareness, policy inconsistencies, and technical hurdles related to net metering and connectivity. Understandably, for India to truly transform its solar landscape, these persistent bottlenecks need urgent and coordinated attention.
Hydroelectricity: A Complex Cornerstone
India’s hydroelectric power capacity now stands at around 49.38 GW. Interestingly, it was only in March 2019 that large hydropower projects were formally categorised as renewable energy. The delay reflects the complexities of the sector, while hydropower is renewable, it’s not always the most efficient or environmentally friendly option.
Large hydroelectric projects often require significant land use, posing challenges in a country already dealing with population pressures and limited space. A case in point is the Tuirial Project in Mizoram, delayed nearly two decades due to local resistance. Originally scheduled for completion in 2008–09, the project stalled in 2004 when the Tuirial Crop Compensation Claimant Association (TCCCA) demanded payment for crops lost in the riverine reserve forest. Moreover, hydropower infrastructure is highly susceptible to climate-related events.
In October 2023, the Chungthang Dam was destroyed by a ‘Glacial Lake Outburst Flood’ (GLOF), underlining the sector’s vulnerability to environmental disasters. Environmental governance poses additional complications. In Himachal Pradesh, for instance, the failure to account for the cumulative impacts of multiple hydro projects has led to severe river fragmentation. The Sutlej now flows naturally in only short stretches, while the Ravi does so in just 3 km of its 70 km course. Hydropower remains a critical part of India’s renewable portfolio—but its future depends heavily on more thoughtful, sustainable planning and impact assessment.
Wind Energy: Promising Yet Slowing
Wind energy currently contributes around 50.04 GW to India’s installed capacity, making it a major pillar of the country’s non-fossil energy mix. Moreover, the recent years have seen major policy advances. In 2022, the Renewable Purchase Obligation (RPO) trajectory was revised to include a dedicated share for wind energy, starting at 0.67% and gradually increasing to 3.48% by 2030.
The Ministry of Power’s October 2023 notification under the Energy Conservation Act further strengthened enforcement by introducing monetary penalties for non-compliance with the RPO. However, the sector’s momentum has slowed in large part due to a key policy shift. The transition from feed-in tariffs, where wind developers were guaranteed above-market rates, to competitive bidding significantly reduced profitability, leading to widespread delays and reduced investor enthusiasm. This policy shift was most visible in the 2017–18 period, which saw capacity additions drop to just 1.7 GW, the lowest in over a decade and a marked decline in project bids. While wind energy has made steady progress over the years, these structural and financial challenges continue to limit the sector from reaching its full potential.
Nuclear Energy: Strategic, but Cautious
Finally, we turn to nuclear power. As covered in Aakhya Weekly Issue #150, the government is ramping up its efforts, pushing government institutions and industry players with a focus on newer, more adaptable technologies. This includes Small Modular Reactors (SMRs) and Bharat Small Reactors (BSRs)—220 MW Pressurised Heavy Water Reactors (PHWRs), designed to minimise land usage, reduce capital expenditure, and streamline resources.
In line with this, the plans to expand India’s nuclear capacity from the current 8 GW to 22 GW by 2031–32 are in place. However, the sector still faces deep-rooted challenges. A major one among them is the liability issues, which continue to discourage private sector participation. Public safety concerns, cumbersome bureaucratic procedures, and difficulty aligning with international nuclear frameworks also persist. The Kudankulam Nuclear Power Plant serves as a prime example, having seen repeated delays and cost overruns stemming from these very complications.
A Long Road Ahead
None of this is to suggest that India is on the wrong track. Achieving over 50% non-fossil fuel installed power capacity is a significant and commendable accomplishment. While it marks a major step forward, it has a long way to go in meeting newly declared targets, as well as the exponentially growing energy demands.
To meet its 2030 target of 500 GW of non-fossil capacity and to truly shift toward clean, reliable energy, India will need to tackle the sector-specific challenges head-on, i.e. by strengthening domestic manufacturing, aggressively investing in infrastructure, addressing regulatory gaps, and ensuring that the scalability of sustainable energy sources goes hand-in-hand with economical pricing, longevity, and reliability.
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