India's Green Energy Strides

  Sansad TV   Mar 7, 2025  Add to Reading List

Key Achievements in India's Renewable Energy Sector

India has made significant strides in transitioning to cleaner and greener energy sources. The country’s efforts to move away from fossil fuel subsidies have been pivotal in this transformation, with a focus on reducing carbon emissions and promoting sustainable energy solutions.

1. Fossil Fuel Subsidy Reforms

  • India began the gradual reduction of fossil fuel subsidies in the early 2010s. Between 2010 and 2014, petrol and diesel subsidies were reduced, with further tax hikes implemented by 2017.
  • By 2023, fossil fuel subsidies had been reduced by 85%—from USD 25 billion in 2013 to just USD 3.5 billion. This reduction has enabled India to shift resources towards promoting renewable energy investments.
  • The funds freed by reducing subsidies were redirected to programs such as providing LPG to rural areas and funding projects in solar energy, electric vehicles, and grid infrastructure, thereby balancing environmental and social needs.

2. Taxation and Financing of Clean Energy

  • From 2010 to 2017, India introduced a coal cess, directing funds towards clean energy development. Approximately 30% of these funds were allocated to the National Clean Energy and Environment Fund (NCEEF) to support renewable energy projects and research.
  • The cess bolstered the Ministry of New and Renewable Energy's budget, allowing key programs like the National Solar Mission and Green Energy Corridor to flourish, driving down solar energy costs and facilitating off-grid solutions.

3. Renewable Energy Capacity Growth

  • India's renewable energy capacity has expanded significantly, with a 24.2 GW (13.5%) increase from 2023 to 2024, reaching 203.18 GW.
  • Non-fossil fuel-based energy, including nuclear, now totals 211.36 GW, up from 186.46 GW in 2023.
  • Solar energy saw a substantial rise, with capacity growing by 27.9% to 92.12 GW in October 2024. India’s solar potential is estimated at 748 GW by the National Institute of Solar Energy (NISE).
  • Wind power capacity increased by 7.8%, and large hydro projects contributed 46.93 GW, while nuclear power added 8.18 GW to the total renewable energy capacity.

4. Global Leadership in Renewable Energy

  • India is ranked 4th globally for total renewable energy capacity, 4th for wind power capacity, and 5th for solar power capacity, solidifying its position as a major player in global renewable energy.
  • India has set a target to achieve 500 GW of renewable energy capacity by 2030 as part of its commitments made at COP26, ensuring that 50% of its energy mix comes from renewable sources.

5. Green Hydrogen Development

  • India is aiming to produce 5 million tonnes of green hydrogen annually by 2030, with a dedicated 125 GW renewable energy capacity to support hydrogen production. This ambitious project will contribute to decarbonizing sectors like transportation, industry, and power generation.

Key Schemes and Initiatives to Strengthen Renewable Energy in India

Several governmental schemes have been launched to accelerate India's renewable energy transition and encourage large-scale adoption of green technologies.

1. Union Budget 2024

  • The Union Budget 2024 allocated Rs 10,000 crore for the Centrally Sponsored Scheme for Solar Power (Grid), a 110% increase from the previous budget allocation.
  • The PM-Surya Ghar Muft Bijli Yojana, launched in February 2024 with a total budget of Rs 75,000 crore, has been allocated Rs 6,250 crore for its implementation. This initiative promotes the installation of rooftop solar systems.
  • Additionally, the government exempted Basic Customs Duty (BCD) on the import of critical minerals needed for renewable energy growth.

2. PM-KUSUM Scheme

  • The PM-KUSUM (Pradhan Mantri Kisan Urja Suraksha evam Utthaan Mahabhiyan) aims to boost solar energy use in agriculture by installing solar pumps and solarizing agricultural feeders. The scheme targets the installation of 34.8 GW of solar capacity, helping reduce dependency on grid power and diesel, while supporting sustainable farming.

3. National Green Hydrogen Mission

  • With an investment of Rs 19,744 crore, the National Green Hydrogen Mission aims to establish a competitive and self-reliant green hydrogen industry. The initiative will support industrial decarbonization, heavy transport, and energy storage, creating jobs and boosting economic growth.

4. Solar Park Scheme

  • Under this initiative, India has approved the development of 55 solar parks with a combined capacity of 40 GW. These parks offer pre-developed land, infrastructure, and private investment opportunities, helping India meet its solar energy goals.

5. PLI Scheme for Solar PV Modules

  • The PLI Scheme for High-Efficiency Solar PV Modules is designed to reduce India’s dependence on imports by incentivizing domestic manufacturing. The scheme aims to build 65 GW of annual manufacturing capacity by 2026, enhancing the competitiveness and efficiency of India’s solar sector.

6. Green Energy Corridor

  • The Green Energy Corridor project aims to improve transmission infrastructure, facilitating the transfer of renewable energy from energy-rich areas to high-demand regions. This project is crucial for integrating renewable energy into the national grid.

7. Viability Gap Funding (VGF) for Offshore Wind

  • The Viability Gap Funding (VGF) scheme supports the development of offshore wind energy projects, focusing on Gujarat and Tamil Nadu. This initiative targets the development of 30 GW of offshore wind capacity by 2030.

8. International Leadership in Renewable Energy

  • India co-founded the International Solar Alliance (ISA), aiming to mobilize USD 1 trillion in solar investments and deploy 1,000 GW of solar energy by 2030.
  • India’s "One Sun, One World, One Grid" (OSOWOG) initiative envisions a global interconnected renewable energy grid, starting with interconnections between India and neighboring regions, then expanding to Africa and ultimately achieving global interconnection by 2050.

Challenges in India’s Renewable Energy Sector

Despite impressive growth, India faces several challenges that must be addressed to maintain progress in renewable energy development.

1. Land Acquisition

  • Securing adequate land for large-scale solar and wind projects is a major challenge. Many suitable areas are already densely populated or are used for agriculture, delaying project timelines and increasing costs.
  • Expanding rooftop solar initiatives and exploring non-agricultural or degraded land could alleviate these challenges.

2. Technology Costs and Availability

  • India faces high costs and limited availability of critical renewable energy technologies, with 98% of solar equipment sourced from China. This dependency makes the sector vulnerable to supply chain disruptions and price fluctuations.

3. Grid Infrastructure

  • Upgrading India’s aging grid infrastructure to accommodate large volumes of intermittent renewable energy like solar and wind is essential. Modernizing the grid with energy storage systems and smart grid technology will ensure stability and reliability.

4. Financing and Investment

  • Despite growth in renewable energy, attracting long-term capital remains a challenge due to high initial costs, rapid technology upgrades, and uncertain returns on investment. Addressing these issues through green bonds and other financing tools is crucial.

5. Regulatory and Policy Barriers

  • Inconsistent policies and delays in project approvals across states create bottlenecks that hinder project implementation. Streamlining regulations and improving coordination between central and state governments can help resolve these issues.

6. Skilled Workforce

  • As India’s renewable energy sector grows, there is a shortage of skilled workers in areas like solar, wind, and green hydrogen technologies. Expanding training programs and vocational courses will be essential to meet the growing demand for skilled labor.

Moving Forward: Key Recommendations

1. Innovative Land Solutions

  • Exploring alternatives such as using non-agricultural land and promoting rooftop solar can help overcome land acquisition challenges.
  • Collaborative land pooling models and offering incentives for landowners can accelerate the process.

2. Strengthening Technology Manufacturing

  • India should focus on building a domestic manufacturing base for critical renewable energy technologies. Public-private partnerships and technology-sharing agreements with advanced countries can help bridge the technology gap.

3. Grid Modernization and Storage Solutions

  • Upgrading grid infrastructure with smart technologies and storage systems is critical to accommodate renewable energy and ensure grid stability.

4. Attracting Investment

  • India can enhance investment by introducing financial incentives like green bonds and renewable energy investment funds, ensuring long-term policy stability and reducing bureaucratic hurdles.

5. Regulatory Reforms

  • Streamlining the regulatory approval process and ensuring uniformity across states will help reduce delays and foster faster renewable energy project development.

6. Workforce Development

  • Expanding skill development programs in emerging renewable energy sectors will help address labor shortages and ensure that India has the skilled workforce needed to sustain growth in the sector.