India currently enjoys a robust power surplus, reversing the conditions of its massive July 2012 grid collapse that left over 600 million people without electricity due to demand outpacing supply. Driven by continuous investments in non-fossil energy sources over the past decade, the country spent between $42 billion and $45 billion on renewables in 2025, according to the International Energy Agency, compared to $10 billion on fossil fuels. This trend marks a complete turnaround from 2015, when fossil fuel investments stood at $15 billion and outpaced green energy funding.
The shift predates Prime Minister Narendra Modi's 2021 announcements at the UN Climate Change Conference in Glasgow, where he pledged to reach 500 GW of non-fossil capacity and source 50 percent of energy requirements from renewables by 2030. The target to meet half of its energy needs from renewables was achieved five years early in 2025, when renewable capacity reached 250 GW.
By the end of June, India's total installed power generation capacity reached 548.2 GW. Fossil fuels accounted for 251.48 GW, or 45.82 percent of the total, while non-fossil sources—including renewables, hydropower, and nuclear—reached 297.36 GW. Hydrocarbons remain heavily utilized primarily for transportation and manufacturing feedstock, whereas nations relying on imported liquefied natural gas for power generation, such as Pakistan, face ongoing financial strain.
Despite these milestones, rapid expansion has introduced distinct operational hurdles, notably a surplus of daytime solar energy coupled with severe storage deficits. Solar capacity has climbed to 29 percent of total generation, up from two percent a decade ago, but generation drops steeply after sunset. Grid-scale battery storage remains critically low, with only 0.27 GW operational by January 2026 against a National Electricity Plan projection of 8.68 GW for 2026-27, although pumped hydro reached 7.2 GW of its 7.45 GW projection.
This storage shortfall results in wasted daytime energy and places pressure on solar generators, while domestic technology development for high-capacity batteries lags behind needs. Regulatory updates, including classifying batteries as part of the generation system and expanding market-based power trading, could alleviate constraints, though a draft amendment to the Electricity Act 2003 remains stalled due to political resistance and farmer protests.
Concurrently, the transition away from coal presents socioeconomic difficulties, as thermal power's share of installed capacity dropped from roughly 74 percent a decade ago to nearly 41 percent. The coal sector directly employs approximately 400,000 workers, with around four million people dependent on the industry, creating a complex labor transition challenge as renewable energy adoption continues to expand.
Originally reported by Open Magazine on Jul 24, 2026.
