India must aim to increase its non-fossil fuel energy capacity to 600 gigawatts (GW) by 2030 to ensure a reliable and cost-effective response to its rising electricity needs, as highlighted in a report by the Council on Energy, Environment and Water (CEEW).
Achieving this goal could result in a reduction in generation costs by 6-18 paise per unit, diminish the necessity for new coal power plants, save between ₹13,000 crore and ₹42,400 crore in power procurement expenses, and generate between 53,000 and 100,000 jobs, all while decreasing carbon emissions by 9-16 percent compared to the fiscal year 2024.
The report notes that reaching 600 GW of non-fossil capacity will require considerable investments in flexible energy resources, including 70 GW from battery energy storage systems with a four-hour duration, 13 GW from pumped storage hydro, and retrofitting 140 GW of coal capacity to ensure grid stability.
Significantly, the cost of battery storage has plummeted in recent years, with tariffs for stand-alone battery storage decreasing by 65 percent over the past two years, even without subsidy support. This trend supports a transition towards a high renewable energy (RE) future.
Additionally, a recent mandate from the Indian government requires all future solar project tenders to incorporate energy storage systems with a minimum capacity of two hours. This is aimed at enhancing grid stability.
The CEEW report advocates for specific policy measures to facilitate India’s shift towards cleaner energy and establish ambitious targets that will send robust market signals. The Ministry of Power should set a clear objective of achieving 600 GW of non-fossil capacity by 2030 and integrate this target into the National Electricity Policy, promoting a diverse portfolio of renewable energy technologies and locations.
Moreover, the Ministry, in collaboration with the Ministry of New and Renewable Energy and other relevant agencies, should explore innovative models to maximize the use of existing land and transmission infrastructure by co-locating wind and storage facilities with solar projects. They should also implement a Uniform RE Tariff (URET) to address the challenges posed by declining clean energy prices, innovate bidding and contract structures, and promote de-risked merchant capacity for renewable energy sales.
In light of the potential for power demand to exceed current projections due to climate change or robust economic growth over the next five years, the report posits that a high renewable energy pathway with 600 GW of non-fossil capacity by 2030 presents the most viable solution, primarily due to the lower costs associated with renewable energy sources. This path would encompass 377 GW of solar, 148 GW of wind, 62 GW of hydroelectric power, and 20 GW of nuclear energy.
