India’s renewable energy share is set to grow from 21 per cent in 2024 to 27 per cent by 2027, with solar PV leading the expansion, rising over 28 per cent between 2025 and 2027, according to the International Energy Agency.
To accelerate its renewable energy transition, the government launched the PM-Surya Ghar: Muft Bijli Yojana in February 2024, aiming to provide rooftop solar systems generating 300 kWh per month for 10 million households, adding 30 GW of capacity. With a ₹700 billion financial outlay, the scheme offers up to 60 per cent capital subsidies and incentives for distribution companies.
In 2024, India amended the Electricity (Rights of Consumers) Rules, streamlining electricity connections and solar plant installations. Systems up to 10 kW are now exempt from feasibility studies, with automatic approval if DISOMs fail to assess applications within 15 days.
The National Electricity Plan (Transmission), introduced in October 2024, aims to facilitate the transmission of 500 GW of renewable capacity by 2030 and 600 GW by 2032. It includes 47 GW of battery storage, 31 GW of pumped hydro storage, and infrastructure for green hydrogen and ammonia transportation to coastal manufacturing hubs.
Wind, hydropower, and nuclear growth
Wind energy, growing at 7 per cent CAGR from 2018 to 2024, is projected to accelerate to 11 per cent from 2025 to 2027. The government has approved ₹74.5 billion for the country’s first offshore wind projects, installing 1 GW capacity off Gujarat and Tamil Nadu.
Hydropower is expected to grow at 7 per cent CAGR (2025-2027), with the CEA identifying 21.1 GW of small hydropower potential. The government has allocated ₹41.4 billion in financial aid and ₹124.6 billion for infrastructure to support hydro projects.
Meanwhile, nuclear power rose 13 per cent in 2024, with plans to triple capacity from 8.2 GW to 22.5 GW by 2032. India is advancing Pressurized Heavy Water Reactors (PHWRs) and developing the Bharat Small Modular Reactor (BSMR) for localized power generation.
Coal and thermal power outlook
Despite renewables’ rapid expansion, coal remains dominant, accounting for 74 per cent of India’s power mix in 2024, projected to decline to 67 per cent by 2027. Coal-based power, which grew at 4 per cent CAGR (2018-2024), is expected to slow to 2 per cent CAGR (2025-2027)
Gas-fired power is also expanding, with a 6 per cent year-on-year growth in 2024, followed by an average 9 per cent annual increase through 2027. India’s thermal power capacity is set to rise from 218 GW to 283 GW by 2032, with 80 GW of new coal capacity planned alongside 500 GW of non-fossil fuel capacity by 2030.
Rising electricity demand
Electricity demand surged 5.8 per cent year-on-year in 2024, driven by 7 per cent economic growth (IMF) and intense heatwaves. Peak demand hit a record 250 GW in May, surpassing 243 GW in September 2023.
Total generation surged 15 per cent to 168 TWh, fueled by cooling needs. By 2030, peak demand is projected to exceed 400 GW, with 65 per cent of capacity from non-fossil fuel sources.
