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Renewables
Alextin Mendonza
Alextin Mendonza
 · Posted in Renewables

India's Power Generation Capacity: Doubling in 10 Years

India is on an ambitious path to double its power generation capacity in the next 10 years, driven by a rapidly growing economy and a strong commitment to clean energy. This transformative journey presents significant opportunities and challenges for the country's energy sector, economy, and environment. Notably, India is pioneering a new model for economic development that prioritizes sustainability and avoids the carbon-intensive approaches followed by many developed nations.

Current Power Generation Capacity of India

India currently ranks fourth globally in total installed renewable energy capacity. As of December 31, 2024, the nation boasts a total installed power generation capacity of 462 GW. This signifies a substantial increase from the 249 GW capacity recorded in March 2014. This growth has been fueled by significant additions in both conventional and renewable energy sources.

Projected Power Generation Capacity of India in 10 Years

While precise projections for India's power generation capacity in 10 years are not readily available, various sources indicate continued growth in both demand and capacity. India's electricity demand is rising at an impressive annual rate of 9%, with peak power demand soaring from 136 GW in 2014 to 243 GW in 2024. This high energy demand growth, recorded at an annual rate of 7%, further underscores the need for substantial capacity additions.

To address this growing demand, the government has finalized the National Electricity Plan for 2023 to 2032. This plan anticipates a peak demand of 458 GW by 2032 and outlines strategies to expand the transmission network from 491,000 circuit kilometers (ckm) to 648,000 ckm and increase transformation capacity from 1,290 Giga Volt Ampere (GVA) to 2,342 GVA.

Sources of Power Generation in India and Their Current Contribution

Fossil fuels, particularly coal, currently dominate India's power sector 6. However, recognizing the environmental and economic imperatives of diversifying energy sources, India has embarked on a path toward greater reliance on renewable energy.

 

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In addition to utility power, India has a significant captive power generation capacity of 79,340 MW as of March 31, 2024.

Despite the dominance of fossil fuels, the share of non-fossil fuels in total electricity production reached 25.44% in 2022-23 and 22.45% up to May 2023. This indicates a gradual but significant shift towards cleaner energy sources.

Government Policies and Initiatives

The Indian government has been actively promoting the adoption of greener technologies through various policies and initiatives. These include:

 

  • Feed-in Tariffs (FITs): Providing fixed prices for renewable energy generation to incentivize investment.
  • Priority Power Supply Systems for Renewable Power (GEC): Ensuring grid access and priority dispatch for renewable energy sources.
  • Renewable Energy Purchase Obligations (RPOs): Mandating a certain percentage of electricity consumption from renewable sources for different states.

These policies demonstrate India's commitment to accelerating the growth of renewable energy and achieving its ambitious clean energy targets.

Planned New Power Generation Projects in India and Their Projected Contribution

India has set ambitious targets to expand its renewable energy capacity significantly. The country aims to achieve 500 GW of non-fossil energy capacity by 2030, including 280 GW of solar capacity and 140 GW of wind capacity 6. Renewable electricity is growing at a faster rate in India than any other major economy, with new capacity additions on track to double by 2026.

To achieve these goals, numerous new power generation projects are underway across the country. These projects encompass a wide range of renewable energy technologies, including solar, wind, pumped storage hydropower, and green hydrogen.

Here's a summary of some of the key planned projects:

 

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In addition to these land-based projects, India is actively pursuing offshore wind energy. The government has approved a viability gap funding (VGF) scheme with a total outlay of INR 74.53 billion to support the development of 1 GW of offshore wind capacity. This initiative includes funding for the installation and commissioning of projects off the coasts of Gujarat and Tamil Nadu, as well as for upgrading ports to meet logistical requirements.

Potential Impact of Doubling India's Power Generation Capacity on the Environment and Economy

Doubling India's power generation capacity will have profound effects on both the environment and the economy. The shift towards renewable energy sources offers a pathway to reduce greenhouse gas emissions, mitigate the impacts of climate change, and create new economic opportunities.

Environmental Impact

 

  • Reduced Greenhouse Gas Emissions: Transitioning to renewable energy sources will play a crucial role in reducing India's carbon footprint and achieving its climate goals. This shift aligns with the country's commitment to sustainable development and its recognition of the potential costs of climate change, which could amount to 10% of national income and push 50 million people back into poverty.
  • Improved Air Quality: Reduced reliance on coal-fired power plants will lead to cleaner air and improved public health outcomes. This is particularly significant in India, where air pollution is a major concern.
  • Water Conservation: Increased use of solar and wind energy will alleviate pressure on water resources, which are currently strained by the cooling needs of thermal power plants. This is crucial in a country where water scarcity is a growing challenge.

Economic Impact

 

  • Job Creation: The renewable energy sector is a significant driver of employment. Its expansion will create numerous jobs in manufacturing, installation, maintenance, and research and development. In 2023 alone, the sector created an estimated 1.02 million jobs.
  • Economic Growth: Investments in renewable energy will stimulate economic growth and contribute to India's goal of becoming energy independent by 2047 5. Between FY22 and FY27, a substantial investment of over Rs 14.5 lakh crore is projected in the power sector to achieve the capacity goals.
  • Reduced Energy Imports: Increased domestic energy production will reduce reliance on imported fossil fuels, enhancing energy security and improving the country's trade balance.
  • Increased Per Capita Electricity Consumption: The per capita electricity consumption in India is projected to grow significantly, further driving the demand for power generation capacity. This growth reflects rising living standards and increased access to electricity.
  • Economic Opportunity of Clean Energy Transition: India is well-positioned to become a global leader in the clean energy transition, particularly in renewable batteries and green hydrogen. This presents significant economic opportunities for the country.

Challenges and Obstacles to Achieving This Goal

While India has made remarkable strides in expanding its power generation capacity, several challenges and obstacles need to be addressed to ensure the continued success of this endeavor:

 

  • Financial Health of DISCOMs: The financial distress of distribution companies (DISCOMs) poses a challenge to the viability of new power projects and the overall stability of the power sector.
  • Intermittency of Renewable Energy: The variable nature of renewable energy sources like solar and wind requires sophisticated grid management and energy storage solutions to ensure reliable power supply. To address this, India is exploring advanced chemistry cells, such as lithium iron batteries, and pumped storage hydropower (PSH) as potential solutions.
  • Land Acquisition and Transmission Infrastructure: Expanding the transmission network and acquiring land for new power projects can be complex and time-consuming, potentially delaying project implementation.
  • Technology and Cost of Green Hydrogen: While green hydrogen holds immense promise as a clean fuel, its cost-effectiveness and scalability remain challenges that need to be overcome.
  • Dependence on Coal: Despite the growth in renewables, India is expected to continue relying on coal for a significant portion of its energy needs in the near future, posing challenges to achieving its climate goals.
  • Aggregate Technical and Commercial (AT&C) Losses: Inefficiencies in the transmission and distribution network lead to significant AT&C losses, impacting the financial viability of the power sector. In FY21 and FY22, these losses were recorded at 21.64% and 17%, respectively.
  • Challenges with "Free Electricity" Promises: Political promises of free electricity at the state level can create distortions in the power market and hinder the financial sustainability of DISCOMs.
  • Smart Meter Rollout: While India has an ambitious plan to install 250 million smart meters by 2025, the successful implementation of this initiative is crucial to improve grid management, reduce losses, and enhance revenue collection.
  • Challenges in Switching to Greener Energy: India faces broader challenges in its transition to cleaner energy, including the need to reduce oil usage and address the technological and economic hurdles associated with green hydrogen.

India's pursuit of doubling its power generation capacity in 10 years is a bold endeavor with significant implications for the country's sustainable development. By prioritizing renewable energy sources, India can achieve its climate goals, improve public health, and drive economic growth. This transition will require overcoming challenges related to grid stability, energy storage, and the financial health of DISCOMs.

Furthermore, the success of this ambitious plan will depend on continued policy support, technological advancements, and international collaboration. India's energy transition is not only crucial for the country's own development but also holds global significance in the fight against climate change. The international community has a vital role to play in supporting India's clean energy aspirations, which will require significant investments and technology transfer.

Despite the challenges, India has made significant progress in expanding its power generation capacity and reducing energy shortages. The reduction in energy shortages at the national level from 4.2% in FY 2013-14 to 0.1% in FY 2024-25 highlights the positive impact of capacity additions on energy security. As India continues on this path, its experience and achievements will provide valuable lessons for other developing nations navigating the complexities of energy transition and sustainable development.

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