For the mandarins in the power ministry and other key wings within the government, 29 July this year was no less than a red-letter day. It was the day when India reached its highest-ever renewable energy share in electricity generation, as renewables met 51.5 per cent of the country’s total electricity demand of 203 GW.
However, what happened on that specific day, the concluding week of July, was probably an indicator of the changing equations within the Indian power sector, inching close to a critical milestone. As the year comes to a close, there are definite signals that the non-fossil energy resources may have nudged past the contribution from the fossil resources in the national kitty. Not only that, at a time when many countries have shown sluggish progress in building new renewable capacity, India has achieved the milestone of attaining a 50 per cent share of its renewable resources in the total national installed generation kitty, five years ahead of the target. Under the Paris Agreement signed in 2015, India had committed to reach this level by 2030.
Observers believe that 2025 has been a year of major developments both in terms of scale building and reinforcing the promises of the future in bolder and stronger terms. Firstly, the renewables’ installed capacity has edged past the fossil sources. Out of the cumulative installed capacity of 505 gigawatts that India reported around the end of November, the contribution of the traditional strongholds of fossil fuels stood at 247 GW, while renewables reached close to 254 GW. In terms of incremental addition to the national generation kitty, renewables have developed a huge edge. This year alone, the addition of new capacity from renewables has stood at over 40 GW. As against this, the addition from the thermal side has been quite low, and it is likely to be in the range of 10 GW when 2025-26 concludes. “We have witnessed a record growth in the renewable energy sector in 2025,” Pralhad Joshi, Union minister for new & renewable energy, told a news agency recently. “We have installed a total capacity addition of about 45 GW achieved during January-November 2025, with solar energy leading the remarkable surge with almost 35 GW. By the end of the year in December, we will touch nearly 48-50 GW.”
Gaining momentum
Stakeholders in the Indian energy sector believe that 2025 has finally kick-started a major shift in the balance of contribution from the two main quarters of power generation. And it will gather further momentum in the coming years as the pace of awarding of new projects (by government agencies and big private boys of the game) and commissioning of several projects across the country gets into the top gear. However, there are a host of challenges which will demand more attention than ever before to harness the growing opportunity. India is now targeting to reach 500 GW of renewables capacity by 2030. But the critical impediments like land acquisition in remote areas to set up solar or wind or hybrid projects, improvement in grid networks to make the best use of renewables (despite over 50 per cent generation contribution, their actual share in grid contribution, is hovering in the range of 25-30 per cent), and delays in power purchase agreement signings are cited as some serious bottlenecks.
Structurally, the entire gamut of renewable production is undergoing a transformation in all the major pockets of the world, and India is no exception. Instead of plain, vanilla power production, based on one source, producers are leaning in favour of WSH (wind-solar hybrid) or FDRE (firm & dispatchable renewable energy) projects, which are mostly backed by energy storage solutions (like BESS). They ensure providing power on demand to the buying side and give the ability to supply power on a round-the-clock basis. But its addition makes the entire exercise of production and supply quite expensive and, therefore, this high capex game will become even more costly in the time to come. But then, the market has seen the emergence of a select group of formidable players (often backed by deep-pocketed investors) with an almost insatiable appetite, which probably resulted in a change in equations in the power sector in the year about to sign off. And they (including PSUs, which have big-ticket plans of their own) are likely to further up the ante in the coming years.