Emerging Opportunities in Renewable Energy and Smart Grids

India’s pledge to reach net-zero emissions by 2070 is a strong step towards fighting climate change and building a sustainable future. As a major developing economy, India’s actions can make a big difference worldwide. A key part of this journey is the investment in renewable energy and smart grids, which can help lower emissions and improve energy use.

Instead of seeing this shift as a challenge, India can turn it into an opportunity to build a cleaner and smarter energy system. By investing in solar, wind, and modern power grids, the country is creating a more reliable and eco-friendly energy future. The country is working to protect the environment while also supporting economic growth. Reaching this goal will need new ideas, strong policies, and cooperation across all sectors.

The Rise of Renewable Energy in India
Working towards this sustainable shift has already started. As of January 2025, India’s installed non-fossil fuel capacity reached 217.62 GW, reflecting consistent growth. This development is supported by government initiatives and increasing interest from investors. By December 2024, the non-conventional energy sector had attracted around USD 21.33 billion in foreign direct investment. These trends indicate a broader shift towards clean energy and a gradual transformation of the country's electricity mix. The government has set an ambitious target of achieving 500 GW of non-fossil fuel capacity by 2030, a move that aligns with the objectives of the Paris Agreement and India’s updated Nationally Determined Contributions (NDCs).

Solar energy, in particular, has seen exponential growth. India’s solar capacity crossed 73 GW in 2024, making it one of the top solar markets in the world. Wind energy remains another strong pillar, with over 44 GW installed across states like Tamil Nadu, Gujarat, and Maharashtra. The country is also expanding its biomass, small hydro, and offshore wind capabilities, ensuring a diverse and resilient renewable energy mix.

The country’s energy mix, once heavily dependent on coal, is gradually becoming more diversified. Solar and wind energy have taken center stage, supported by biomass, small hydro, and emerging sectors like green hydrogen and nuclear. The government’s strong policy backing — through initiatives such as the National Solar Mission and the Green Energy Corridor — has played a pivotal role in creating an enabling environment for growth.

More importantly, the growth of renewables is now being seen not just as a response to climate change, but as a strategic economic opportunity. Renewable projects are creating local employment, attracting domestic and international investment, and offering new possibilities for decentralised power generation, especially in rural and underserved areas. In 2023, India's renewable energy sector marked a major milestone by generating an estimated 1.02 million jobs, reflecting the growing role of clean energy in driving employment and supporting economic development across the country.

While capacity addition is a visible metric of progress, the deeper transformation lies in the shift in mindset—from viewing renewables as a supplement to fossil fuels to recognising them as a central pillar of the country’s future energy strategy. The next phase will focus not only on scaling up but also on integrating these resources into a more flexible, modern, and digitally managed grid.

Smart Grids: Laying the Foundation for a Modern Energy System
While the rapid expansion of renewable energy marks a significant achievement for India, it also introduces new complexities in managing the power system. Intermittent sources like solar and wind, by nature, produce variable outputs that traditional grids—designed for steady, centralised power generation—are not equipped to handle. This mismatch between conventional infrastructure and modern energy demands calls for a smarter, more adaptive approach to grid management.

Smart grids address this challenge by incorporating digital technologies, automation, and real-time communication into the electricity network. These systems enhance grid flexibility, allowing for accurate demand forecasting, dynamic load balancing, and faster fault detection.

To modernise its power distribution network, India is undertaking comprehensive smart grid reforms through the National Smart Grid Mission (NSGM) and the Revamped Distribution Sector Scheme (RDSS). A cornerstone of this effort is the targeted installation of 250 million prepaid smart meters by 2027, spanning consumers, feeders, and distribution transformers. This large-scale digital transformation aims to reduce aggregate technical and commercial (AT&C) losses to below 15 percent while enhancing grid efficiency, operational transparency, and the financial performance of power distribution companies.

In addition to improving system performance, smart grids are vital for enabling the integration of decentralised and digital technologies, such as rooftop solar, electric vehicles (EVs), and battery storage. As EV adoption increases and rooftop solar becomes more widespread, grid flexibility and responsiveness will be critical to maintaining stability and ensuring reliable service across diverse demand patterns.

Moreover, smart grid technology has the potential to address long-standing issues such as electricity theft, revenue leakage, and unplanned outages — factors that have historically burdened India’s DISCOMs. With smart grid analytics and automation, utilities can shift from reactive operations to predictive and preventive management.

The Road Ahead: Opportunities and Challenges
India’s transition to a clean energy future is filled with promise but requires sustained focus. Achieving the 500 GW target and building a smart, decentralised power system will demand massive investment. According to a joint report, India will need around USD 160 billion in renewable energy investments between 2023 and 2030 to stay on track.

In addition to capital, the country must address regulatory, technical, and institutional challenges. Grid infrastructure must be upgraded and more clarity is required in state-level energy transition roadmaps. Land acquisition and delays in transmission connectivity continue to hinder project implementation.

Capacity building is another critical area. As energy systems become more digitised, there will be an increased need for engineers, data analysts, technicians and more with specialised training. Initiatives like the Skill Council are already working to close the skills gap, but greater scale and coordination are needed.

Equally important is ensuring that the clean energy transition is inclusive and just. The pathway to net-zero emissions by 2070 is ambitious but achievable provided there is continued focus on scaling up renewables, modernising the grid, and fostering cross-sector collaboration. By staying the course, India has the potential to become not just a clean energy leader at home, but a global champion of sustainable development.