From Gusts to Gigawatts: Scaling Wind Power for India’s Clean Energy Future

India has emerged as one of the world’s most dynamic renewable energy markets. At the heart of this transformation lies its pledge to achieve 500 GW of non-fossil fuel capacity by 2030. This target is not just a symbolic statement of intent; it is a carefully calibrated response to international climate obligations, domestic energy security needs, and the economic imperatives of sustainable growth.
 
For a country where electricity demand is expected to nearly double by 2030, scaling renewables is the most practical pathway to ensure affordable, clean, and reliable power. Within this mix, wind energy is expected to contribute more than 100 GW of capacity, playing a crucial balancing role alongside solar. Unlike solar, which peaks during the day, wind patterns in India often strengthen during evenings and monsoon months, making it a natural complement for grid stability.
 
Progress So Far: Building on Milestones

Wind energy has been a cornerstone of India’s renewable story since the early 2000s, well before solar power took centre stage. As of March 2025, the country’s installed wind capacity had crossed 50 GW, accounting for around 10 percent of total renewable capacity. The sector generated more than 80 TWh annually, equivalent to roughly 4–5 percent of national electricity demand.
 
This capacity is geographically concentrated. Gujarat and Tamil Nadu together account for nearly half of India’s total installations, followed by Karnataka, Maharashtra, and Rajasthan. These states have favourable wind corridors and supportive state-level policies. Beyond these onshore projects, India is preparing to tap into its offshore wind potential, particularly along the coasts of Gujarat and Tamil Nadu, where studies by the National Institute of Wind Energy (NIWE) estimate a resource base of more than 70 GW.

India is also moving towards hybrid renewable projects, where wind and solar share common land, transmission corridors, and storage systems. The Kutch Hybrid Renewable Energy Park, with an expected capacity of 30 GW, is one of the largest projects of its kind globally. Such hybridisation ensures that renewable power remains available throughout the day, reducing variability and curtailment.
 
Policy and Incentive Mechanisms

Policy innovation has been a decisive factor in sustaining wind growth. One of the most notable interventions was the reduction of Goods and Services Tax (GST) on wind turbine components from 12 percent to 5 percent, which effectively lowered upfront project costs. This move made tariffs more attractive for power distribution companies, indirectly benefiting end consumers. Furthermore, tariff-based competitive auctions have pushed developers to deliver lower-cost power, ensuring that wind remains price-competitive against both fossil fuels and solar energy. The government has also encouraged wind-solar hybrid projects, which not only balance the variability of renewables but also optimise the use of scarce land and grid infrastructure.
 
Financing the Transition: Banking Sector’s Role in Scaling Wind Energy

The Indian banking system will be central to financing the renewable energy transition, particularly in scaling wind power. With investment requirements projected at USD 60–68 billion annually by 2030, domestic banks, non-banking finance companies (NBFCs), and development finance institutions (DFIs) must play a leading role alongside foreign capital.
 
Commercial banks in India are already major lenders to the power sector, but their portfolios remain skewed toward thermal projects. As coal-based power faces regulatory and market risks, a gradual rebalancing toward renewables is inevitable. Wind projects, with their long gestation period and 20–25 year operating life, need long-tenure financing at competitive interest rates. Banks will therefore need to align their lending models, possibly through consortium arrangements, to spread risk.
 
The Reserve Bank of India (RBI) has classified lending to renewable energy as part of priority sector lending (PSL) under certain thresholds, but scaling to utility-scale wind farms will require beyond-PSL financing frameworks. Green bonds and sustainability-linked loans are expected to bridge this gap, offering banks a new product line while meeting their environmental, social, and governance (ESG) mandates.
 
From a risk perspective, Indian lenders have been cautious due to concerns such as payment delays by state distribution companies (DISCOMs), tariff disputes, and curtailment risks. To address this, credit enhancement mechanisms – such as partial risk guarantees, escrow structures for payment security, and blended finance partnerships with multilateral agencies – are becoming more important. These structures reduce risk premiums and make projects more bankable.
 
For public sector banks, the renewable sector represents both an opportunity and a challenge. As government policy strongly favours clean energy, institutions like the State Bank of India (SBI), PFC, and REC have already scaled up renewable lending portfolios. But balancing profitability with sustainability will require stringent project appraisal, cash-flow modelling, and continuous monitoring. Private banks, on the other hand, may leverage their strength in structured finance to underwrite large-ticket renewable projects and syndicate them to investors.
 
At a systemic level, Indian banks will also face climate stress-test requirements in the coming years, aligned with global Basel norms. This will push banks to disclose their exposure to fossil fuel versus renewable sectors and accelerate the reallocation of capital. Wind projects, with relatively stable capacity utilisation and proven technology, could emerge as preferred assets in such a framework, particularly when combined with storage to mitigate variability risks.
 
Grid Integration and Storage Solutions

No renewable energy expansion can succeed without a robust grid. In states such as Tamil Nadu, which generate large amounts of wind power, curtailment is a recurring challenge. During high-wind months, excess generation cannot be absorbed due to insufficient transmission capacity.
 
The Green Energy Corridor project, designed to strengthen and expand renewable evacuation infrastructure, is crucial in this regard. It aims to connect renewable-rich states to demand centres across the country, reducing curtailment and improving reliability.
 
At the same time, energy storage will become indispensable. Estimates from the Central Electricity Authority (CEA) suggest that storage capacity must grow from 6 GW in 2025 to 61 GW by 2030. Batteries, pumped hydro projects, and flexible thermal plants with battery retrofits will be vital in providing round-the-clock clean energy. Pilot projects are already underway to integrate battery storage at coal plants, enabling them to respond more flexibly to variable renewable generation.
 
Social and Economic Impacts

Beyond megawatts and gigawatt-hours, wind energy has tangible impacts on communities and the economy. The wind sector generates employment across manufacturing, installation, and long-term maintenance. Independent studies show that in India, wind projects create about 1–1.5 jobs per MW during their lifecycle. While global estimates often suggest higher figures (15–20 jobs per MW when including extended supply chain effects), India’s more efficient deployment has kept the ratio leaner but still significant.
 
Wind farms often emerge in semi-arid or coastal regions with limited economic activity. Their presence brings infrastructure development, local contracting opportunities, and in many cases, community benefit programs. In states like Gujarat, developers have partnered with local bodies to provide skill training and education, ensuring that renewable growth translates into shared prosperity.
 
Moreover, by displacing fossil fuel generation, wind reduces air pollution and greenhouse gas emissions, improving public health outcomes. These co-benefits make wind energy not only an economic imperative but also a social necessity.
 
Global Comparisons

India’s wind journey must also be viewed in a global context. By mid-2025, China had amassed approximately 570 GW of wind energy capacity, widening its global lead. Meanwhile, the US is on track to install around 8 GW this year – increasing its total toward 150–160 GW. Compared to these numbers, India’s 50 GW appears modest, but its growth potential is unmatched. With a technical potential of over 300 GW of onshore wind and another 70 GW offshore, India could become one of the top three global markets by 2030 if policies and financing align.
 
What distinguishes India is the sheer pace required – doubling capacity in just five years while simultaneously expanding solar, hydro, and nuclear capacity. Few countries face such a steep growth trajectory, making India’s efforts a critical case study for the global clean energy transition.
 
Challenges that Could Slow Progress

Despite achievements, significant hurdles remain. Financing risks are foremost, but transmission bottlenecks could also slow growth, especially if the pace of grid expansion lags behind renewable additions. Another concern is the delay in signing power purchase agreements (PPAs) by state utilities, which creates uncertainty for developers and hampers project timelines. Finally, while India is rapidly increasing renewables, coal still provides the majority of electricity. Unless managed carefully, this continued reliance on coal could dilute the environmental benefits of renewable expansion and crowd out investment.
 
Roadmap to 2030: What Needs to Happen

The path forward requires a multi-pronged strategy. On the policy side, India must sustain its auction pipeline, extend GST and fiscal benefits, and streamline land acquisition for wind parks. On financing, the government and central banks could de-risk investments through guarantees and long-term concessional loans, encouraging institutional investors and pension funds to participate. Infrastructure upgrades should prioritise the Green Energy Corridor, cross-state transmission links, and localised microgrids for distributed wind adoption.
 
Storage deployment must accelerate, targeting 50–60 GW of capacity by 2030, while also making coal plants more flexible with retrofitted storage solutions. Equally important, the domestic manufacturing base for turbines and components must be strengthened to avoid over-dependence on imports. Finally, transparent and efficient PPA processes will encourage private developers and state utilities to commit with confidence.
 
India’s target of 500 GW of non-fossil fuel capacity by 2030 is both ambitious and necessary. Wind energy, projected to contribute over 100 GW, will be a cornerstone of this journey. While policy, infrastructure, and technology are critical, the financial sector – particularly banks – will determine how quickly and effectively this transition unfolds.
 
If Indian banks can design innovative financing products, adopt de-risking mechanisms, and reorient portfolios toward sustainable assets, they will not only help achieve national renewable targets but also future-proof themselves against climate risks. In this way, the roadmap for wind energy is not just a story of turbines and transmission lines; it is equally a story of credit flows, financial resilience, and the banking sector’s role in powering India’s clean energy future.
 
                          - Neha Somvanshi, Chief Manager (Research). State Bank Academy