India still a long way from energy transition target

India under PM Modi aims to achieve netzero emissions by 2070. To accomplish this, India must focus on two simultaneous goals; a development path that strengthens the economy while ensuring a clean and sustainable future via just energy transition. Unfortunately for India, as per data available in public domain, manufacturing has fallen from 15.3 percent of GDP in 2014 to 12.6 per cent the lowest in the last 60 years. The transition from 8.2 GW today to 100 GW in 22 years will require a series of interventions.

While this is a positive step, a renewed push is needed in the short-term to meet the existing solar, wind and energy storage targets by 2032; for that, significant steps are expected throughout the year, Ruchita Shah an Analyst with Energy Asia opined. Policies supporting domestic manufacturing of solar modules, batteries, electrolysers and ancillary areas such as enhancing grid infrastructure and strengthening critical minerals supply chains remain central to this transition in meeting the target of 500 GW non-fossil fuel capacity by 2030. As of December 2024, India’s installed nonfossil fuel-based capacity stood at 225.8 GW comprising 97.9 GW solar, 48.2 GW wind, 46.9 GW hydro and 8.2 GW nuclear capacities. Sitharaman’s Budget has announced a national manufacturing mission to strengthen the ‘Make in India’ vision to boost domestic production of solar PV cells, wind turbines, batteries, and electrolysers, emphasising India’s commitment to self-reliance and sustainable growth.

According to recent reports, India still imports around 60-65% of its renewable energy components, particularly solar cells and modules, from China, making China the dominant supplier for India’s solar energy needs; roughly $3.89 billion worth of imports in 2023-24. While terming the Make in India mission a failure based on manufacturing data, LoP Rahul Gandhi opined the vision for production in India must also have a specific focus on emergent technologies such as electric motors, batteries, optics, and artificial intelligence.

Building on India’s on-going efforts to diversify its energy mix, Budget 2025 sets an ambitious target of adding at least 100 GW of nuclear capacity by 2047 a strategic move to strengthen long-term energy security and position nuclear energy as an alternative to supply base load (for grid stability, now mostly given by coal fired thermal power and large hydropower) while reducing dependence on fossil fuels. However, the nuclear goal will require significant legislative reforms, particularly to enable private sector participation through amendments to the Atomic Energy Act and the Civil Liability for Nuclear Damage Act.

Despite the forward-looking directions in the budget, from a short-term perspective and priorities, the budget unexpectedly has not explicitly dealt with the expectations on continued support for wind energy, transmission infrastructure and energy storage, green hydrogen and industrial decarbonisation.