Current Affairs Topics Archive
International Relations Economics Polity & Governance Environment & Ecology Science & Technology Internal Security Geography Social Issues Art & Culture Modern History

Renewables to dominate India’s grid by 2070, but ‘structural challenges’ are slowing the pace

February 12, 2026 6 min read Environment & Ecology Economics GS3 (Environment Energy Infrastructure) GS2 (Government Policies)
On This Page ▼

What Happened

  • A report by NITI Aayog projects that renewable energy will account for over 80% of India's power generation by 2070, while coal's share is expected to fall sharply to 6-10%.
  • India's net-zero 2070 target requires a phased but accelerating transition away from fossil fuels in the power sector over the next four decades.
  • However, structural challenges are slowing the pace of transition: grid integration constraints, DISCOM financial distress, project execution lags, and inadequate energy storage infrastructure.
  • High-renewable states — Rajasthan, Gujarat, and Tamil Nadu — reported renewable energy curtailment levels of 10-30% due to transmission unavailability in 2025.
  • Installed renewable energy capacity stood at 209 GW at end of December 2024, reflecting only 16% year-on-year growth — insufficient to meet the 500 GW non-fossil fuel target by 2030.

Static Topic Bridges

India's Climate Commitments — NDC and Net-Zero 2070

India's climate commitments operate at two levels: the Nationally Determined Contribution (NDC) under the Paris Agreement for near-term targets, and the long-term net-zero pledge announced at COP26 in Glasgow (November 2021). India's updated NDC (August 2022) sets targets for 2030, while the net-zero commitment extends the decarbonisation horizon to 2070.

  • Paris Agreement adopted at COP21 (December 2015); India ratified on October 2, 2016
  • India's updated NDC (August 2022): 45% reduction in emissions intensity of GDP by 2030 (from 2005 levels) and 50% cumulative electric power installed capacity from non-fossil fuel sources by 2030
  • Net-zero by 2070: announced by PM at COP26, Glasgow (November 2021) — India is the only major economy with a 2070 (not 2050 or 2060) target
  • Principle of Common but Differentiated Responsibilities and Respective Capabilities (CBDR-RC) under UNFCCC Article 3 — India's negotiating position at COPs
  • India's total GHG emissions: approximately 3.9 billion tonnes CO2-equivalent (third largest globally after China and the US)
  • National Action Plan on Climate Change (NAPCC), 2008: 8 National Missions including National Solar Mission and National Mission for Enhanced Energy Efficiency

Connection to this news: The NITI Aayog report maps the pathway from India's 2030 NDC targets to the 2070 net-zero goal. The structural challenges identified — grid constraints, DISCOM losses, storage gaps — directly threaten the achievability of these commitments. If the 500 GW by 2030 target is missed, the 2070 net-zero trajectory becomes even steeper.

Electricity Act, 2003 and Renewable Purchase Obligation (RPO)

The Electricity Act, 2003 is the foundational legislation governing India's power sector. Section 3 mandates the Central Government to formulate a National Electricity Policy based on optimal utilisation of all energy resources including renewables. Section 86(1)(e) empowers State Electricity Regulatory Commissions (SERCs) to specify a percentage of total consumption that distribution licensees must procure from renewable sources — this is the Renewable Purchase Obligation (RPO).

  • Electricity Act, 2003: replaced the Indian Electricity Act (1910), Electricity (Supply) Act (1948), and Electricity Regulatory Commissions Act (1998)
  • Section 3: National Electricity Policy formulated in consultation with CEA and State Governments
  • Section 86(1)(e): SERCs to promote co-generation and generation from non-conventional sources by specifying RPO percentages
  • National Electricity Policy, 2005 and National Tariff Policy, 2006: operationalise RPO framework
  • RPO targets progressively increased; from FY2024-25, the Energy Conservation (Amendment) Act, 2022 introduced Renewable Energy Certificates (RECs) and Carbon Credit Trading
  • Electricity (Amendment) Bill, 2022: proposes delicensing of distribution, direct benefit transfer of subsidies, strengthening of RPO enforcement
  • Central Electricity Authority (CEA): statutory body under Section 70 for planning, coordination, and technical standards

Connection to this news: Despite the legislative framework mandating renewable energy procurement, enforcement of RPO remains weak. Many DISCOMs fail to meet their RPO targets due to financial distress and preference for cheaper conventional power. Strengthening RPO compliance is critical if India's renewable capacity additions are to translate into actual generation share increases.

DISCOM Financial Health and Reform Schemes

India's power distribution companies (DISCOMs) are the weakest link in the electricity value chain. Their accumulated losses doubled from Rs 3.76 lakh crore in 2015 to Rs 7.53 lakh crore in 2024 (equivalent to 2.31% of GDP). Aggregate Technical and Commercial (AT&C) losses remain at approximately 15% (against a world average of 6%), driven by legacy grid infrastructure, tariff shortfalls, inefficient billing and collection, and electricity theft.

  • Ujjwal DISCOM Assurance Yojana (UDAY): launched November 2015 to restructure DISCOM debt; states took over 75% of DISCOM debt; targets included AT&C loss reduction to 15% by FY2019
  • UDAY outcomes: initial improvement, but accumulated debt has risen again post-COVID
  • Revamped Distribution Sector Scheme (RDSS): launched June 2021 with outlay of Rs 3,03,758 crore; targets AT&C loss reduction to 12-15% and elimination of ACS-ARR gap by FY2025-26
  • Electricity Act, 2003: mandated unbundling of State Electricity Boards into generation, transmission, and distribution entities
  • Key challenge: state governments set tariffs below cost of supply for political reasons; regulatory assets (deferred revenue) accumulate
  • India's T&D losses at approximately 15% vs world average of 6%

Connection to this news: DISCOM financial distress directly slows renewable energy deployment. Financially stressed DISCOMs avoid signing new Power Purchase Agreements (PPAs) for renewable energy, delay payments to generators (affecting investor confidence), and lack funds for grid modernisation needed to integrate variable renewable energy. This is one of the primary "structural challenges" slowing India's transition pace.

Energy Storage — Battery and Pumped Hydro Systems

Large-scale energy storage is essential for integrating intermittent renewable sources (solar and wind) into the grid. India requires an estimated 411.4 GWh of energy storage by 2031-32, comprising 236.2 GWh from Battery Energy Storage Systems (BESS) and 175.2 GWh from Pumped Hydro Storage Plants (PHSPs). Currently, deployment is far below these targets, creating a structural bottleneck for renewable integration.

  • CEA estimate: 41.13 GW of BESS (5-hour duration) and 18.6 GW of pumped hydro needed by 2029-30
  • India's total pumped hydro potential: 181.5 GW (both on-river and off-river); 38 projects with 50.67 GW capacity under various stages of development for commissioning by 2032
  • Viability Gap Funding (VGF) for BESS: first announced in Budget 2023-24 for 4 GWh (40% capex support); expanded to 13.2 GWh with additional Rs 5,400 crore
  • Energy Storage Obligation (ESO): introduced for distribution utilities; gradually increasing from 1% in FY2024 to 4% by FY2030
  • Green Energy Corridor: transmission infrastructure programme to evacuate renewable energy from resource-rich states; Phase I (intra-state) and Phase II (inter-state) cover approximately 10,750 km of transmission lines
  • Key challenge: renewable energy growth outpacing transmission infrastructure — projects await grid connection, leading to curtailment

Connection to this news: The absence of adequate energy storage means that even when renewable capacity is installed, it cannot be fully utilised during peak demand hours or when renewable generation is low. The 10-30% curtailment rates reported in high-renewable states are a direct consequence of insufficient storage and transmission infrastructure — reinforcing why the 2070 transition timeline faces structural headwinds.

Key Facts & Data

  • India's net-zero target: 2070 (announced at COP26, Glasgow, November 2021)
  • Updated NDC (August 2022): 45% emissions intensity reduction by 2030; 50% non-fossil fuel power capacity by 2030
  • Renewable energy target: 500 GW of non-fossil fuel capacity by 2030
  • Installed RE capacity (December 2024): 209 GW (16% YoY growth); as of June 2025: 242.8 GW non-fossil fuel (including 8.8 GW nuclear)
  • Solar capacity: 92.12 GW; Wind: 47.72 GW (as of mid-2025)
  • NITI Aayog projection: renewables to supply over 80% of generation by 2070; coal to fall to 6-10%
  • Investment required: over US $360 billion by 2030 (US $190-215 billion for RE capacity; US $150-170 billion for transmission and storage)
  • DISCOM accumulated losses: Rs 7.53 lakh crore in 2024 (2.31% of GDP)
  • India's T&D losses: approximately 15% (world average: 6%)
  • Energy storage requirement by 2031-32: 411.4 GWh (236.2 GWh BESS + 175.2 GWh pumped hydro)
  • Curtailment in high-RE states (Rajasthan, Gujarat, Tamil Nadu): 10-30% due to transmission constraints