Pointing out that renewable energy constitutes 47 per cent of India’s total installed capacity, the Economic Survey 2024-25 warns of substantial hurdles to further growth, particularly energy storage technologies and sourcing of critical minerals needed for the transition.

The survey states that India has “negligible production capacity for key components like polysilicon, ingots, and wafers” and is dependent on imports, including from China, for its renewable energy requirements. “Despite being one of the world’s lowest greenhouse gas emitters per capita, India has made notable strides in reducing the emissions intensity of its energy consumption. This progress is largely due to the increased deployment of renewable energy sources alongside a suite of energy conservation measures. Nonetheless, the growth of renewable energy faces substantial hurdles, particularly in energy storage technologies and the sourcing of critical minerals necessary for this transition,” it states.

“Lessons learned from the experiences of developed economies underscore the risks of prematurely shutting down thermal energy sources without viable technological alternatives that ensure a stable energy supply. The challenges mentioned in harnessing renewable energy at scale indicate that India will need to continue the efforts to maximise the efficiency of its existing fossil fuel resources in the medium term. The advancement and deployment of low-emission thermal power technologies, including Advanced Ultra Super Critical (AUSC) power plants, will play a pivotal role in this transition,” it added.

The survey points out that India’s power sector has been bolstered primarily by large-scale solar and wind initiatives. By the end of December 2024, the country’s total renewable energy installed capacity increased by 15.8 per cent year-on-year, reaching 209.4 GW from 180.8 GW in December 2023. Renewable energy now constitutes about 47 per cent of India’s total installed capacity, highlighting a growing dependence on clean, non-fossil fuel-based energy sources. 

While alternative solutions such as green hydrogen present a viable option for the medium term, the economic survey states that “affordability issues” remain a significant barrier to widespread adoption. “Furthermore, although nuclear energy could contribute to India’s energy mix, its expansion is impeded by a lack of a supportive ecosystem and the monopolistic nature of nuclear fuel supply chains.”

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Published on January 31, 2025