India Strives for 500 GW Non-Fossil Power by 2030
March 15, 2025
ByHaley Zaremba– Mar 15, 2025, 12:00 PM CDT
- Despite issuing record-breaking clean energy tenders, India is experiencing weak demand and undersubscription due to complex tender structures and transmission delays, which threaten its 500 GW non-fossil power capacity target by 2030.
- India’s recent economic slowdown and past failures to meet clean energy goals have raised concerns about investor interest and the availability of low-cost financing for future renewable energy projects.
- While India is making incremental progress in decarbonizing its economy, current renewable energy capacity additions are insufficient to meet the nation’s ambitious targets and have significant global implications for energy markets and emissions.
India has been courting foreign and domestic investment in its clean energy industry in an effort to shore up energy security and meet the nation’s lofty decarbonization goals. But a new report reveals that while India has offered up record-breaking clean energy tenders, they have been met with weak demand, revealing a number of major obstacles for the sector.
The Indian government is targeting a minimum of 500 GW of non-fossil power capacity by 2030. This represents a huge uptick from their current levels, which clock in at approximately 165 GW. India issued a historic 73 gigawatts of utility-scale renewable energy tenders last year as part of a push to meet this goal, but about 8.5 GW of those tenders remain undersubscribed. That’s five-fold more than the rate of undersubscription seen in 2023.
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In simple terms, this means that the Indian government offered up a massive 73 gigawatts worth of contracts for clean energy companies to compete over, which would seem like a great headline for the country’s clean energy industry. However, not all of the contracts were ultimately awarded due to insufficient interest on the part of would-be competitors.
To explain this flagging subscription rate, a Reuters write-up points to “lower demand due to complex tender structures and delays in interstate transmission readiness,” based on findings from a report recently published by the U.S.-based Institute for Energy Economics and Financial Analysis (IEEFA).
“Delays in project implementation pose a significant challenge to India’s renewable energy target for 2030,” said IEEFA report co-author Ashita Srivastava. “(The) issues … could deter investor interest in future renewable energy projects in India, potentially affecting the availability of low-cost financing from large-scale investors,” Srivastava said.
And that’s bad news for everyone. As stated by the International Energy Agency, “India’s energy choices matter. They have direct and far-reaching effects on the lives of a growing population, and major indirect effects on the rest of the world through their impact on energy markets, emissions, and flows of technology and capital.”
India – the world’s most populous country – has seen rapid economic growth over the last few years, and recently overtook the United Kingdom as the fifth biggest economy in the world. What is more, by 2030, India is expected to surpass both Germany and Japan to become the third largest economy in the world.
But in 2024 India’s economic growth unexpectedly stalled out, thereby “revealing major cracks in the foundation.” After a whopping 8.2 percent growth rate over the last fiscal year, the country’s rate of economic growth plummeted to 5.4 percent in the summer of 2024. And now, projections for this fiscal year place the growth rate at a comparatively modest 6.4 percent.
But this year is not the first year that India fell far short of its clean energy targets – even while the economy was going gangbusters, clean energy capacity additions fell far short of government goals. India had previously targeted 175 GW of renewable energy capacity by 2022, but as of last year fossil fuels accounted for more than two-thirds of the country’s total power generation. In 2024, less than 28 GW of solar and wind capacity was added to Indian grids.
To be sure, India is making incremental progress on decarbonizing its economy. Last month marked the nation’s sixth straight month of decreasing thermal coal imports, for example. But current renewable energy capacity additions are nowhere close to where they need to be to be on any feasible pathway toward 500 GW of non-fossil power capacity by 2030.
But not all reports are as pessimistic as the recent IEEFA publication. Just two months ago S&P Global reported that the record-breaking tenders signal positive trends for investment in India’s clean energy sector, even if a bit undersubscribed and overly ambitious. “A substantial increase in capacity requested via competitive tenders during the last few years represents a growing appetite for renewable energy in India driven by rising power demand, ambitious policy targets and a maturing competitive landscape,” the report stated.
By Haley Zaremba for Oilprice.com
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