2025 and Beyond: India’s Renewable Energy Surge and the Hurdles That Remain

For India to realize its 2025 targets and set the foundation for its 2030 ambitions, it must adopt a comprehensive strategy. This strategy should prioritize immediate actions in grid modernization and energy storage advancements.

December 19, 2024. By News Bureau

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Renewable energy

Environmental sustainability

Battery Energy Storage Systems

Pumped hydro installations

National Green Hydrogen Mission

India's journey towards becoming a renewable energy giant marks a pivotal shift in its developmental agenda, aligning economic growth with environmental sustainability. As the country strides toward its ambitious goal of 500 gigawatts (GW) of renewable energy capacity by 2030, the progress achieved in 2024 and the outlook for 2025 reflect both India's potential and the significant challenges that must be navigated.

Renewable Energy Growth in India
In 2024, India achieved a significant milestone by exceeding 200 GW of installed renewable energy capacity, driven predominantly by substantial increases in solar and wind energy installations. This achievement represents a crucial step toward reducing the nation's carbon footprint and enhancing energy security. The government's focus for 2025 continues to prioritize expanding this capacity, integrating advanced technologies like Battery Energy Storage Systems (BESS) and pumped hydro installations. These technologies are critical for stabilizing the grid and managing the intermittency associated with renewable energy sources.

Furthermore, the upcoming year is set to witness an increase in initiatives centred around green hydrogen, facilitated by the National Green Hydrogen Mission. This mission aims to support the decarbonisation of heavy industries such as steel, fertilizers, and cement and establish India as a frontrunner in the global hydrogen economy.

Key Challenges
Despite these advances, the expansion of renewable energy is impeded by several challenges. Grid integration issues top the list, with the existing infrastructure needing significant upgrades to manage the fluctuating outputs from renewable sources effectively. Energy storage, which is pivotal for energy reliability, is still emerging in India and demands substantial investment to enhance its affordability and scalability.

Financing these ventures remains a formidable challenge. Renewable energy projects require large upfront investments, and the nascent technology of green hydrogen is particularly capital-intensive. Although financial instruments like green bonds and viability gap funding are in place, there is a pressing need for more robust private and international investment.

Exploring Solutions Like Technological Innovations, Policy Support, and Industry Collaboration
Addressing these hurdles requires a multifaceted approach. Technological innovation is crucial, particularly in the domains of energy storage and grid modernization. Efforts are underway to develop more efficient and cost-effective storage solutions that can smooth out the variability in renewable power generation. Similarly, initiatives like the Green Energy Corridors project are critical for enhancing India's transmission infrastructure to support the larger-scale integration of renewable energy.

Policy support needs to be fortified. Policies that provide clarity and stability can significantly alleviate the uncertainties that currently plague the renewable sector. Enhancing policies that facilitate corporate procurement of renewable energy through long-term agreements can also drive substantial growth in the Commercial and Industrial (C&I) sectors, which are vital for expanding the renewable market.

Industry collaboration is equally important. Strategic partnerships between public entities like SECI, NTPC, private sector enterprises, and international firms can lead to shared expertise, resources, and faster project execution. Such collaborations can also foster innovation and provide the necessary momentum for overcoming technological and financial challenges.

Roadmap for 2025
For India to realize its 2025 targets and set the foundation for its 2030 ambitions, it must adopt a comprehensive strategy. This strategy should prioritize immediate actions in grid modernization and energy storage advancements. Investing in these areas, coupled with skill development for new technologies, is critical.

Expanding and diversifying financial mechanisms to support renewable projects will be pivotal. This includes broadening the scope of existing financial instruments and introducing novel incentives to attract more substantial private and international investments.

Streamlining regulatory processes and offering robust policy support will be essential to remove bureaucratic obstacles and enhance the sector's investment appeal. Regulatory frameworks must be agile enough to adapt to the fast-paced changes in technology and market dynamics, ensuring that India remains an attractive destination for renewable energy investments.

Finally, nurturing a domestic manufacturing ecosystem through supportive initiatives will not only reduce imports but also spur job creation and economic growth within the country. The PLI schemes and other governmental incentives are expected to propel the local production of critical renewable energy components like solar panels, wind turbines, and batteries, which are essential for India’s energy independence.

While challenges abound, the opportunities and benefits of a robust renewable energy sector—ranging from environmental benefits to economic growth and enhanced energy security—are profound. Strategic actions addressing the current challenges can propel India not only toward meeting its 2025 goals but also toward setting a global benchmark in renewable energy adoption. With concerted effort and continued innovation, India’s renewable energy sector is poised to play a critical role in the global transition towards a more sustainable and secure energy future.

- Parag Sharma, Founder and CEO, O2 Power