India is the largest country by population and the fifth-largest economy, globally. It is seeing growth on both fronts and has a huge energy demand to meet. With a national target of net zero by 2070 and a near-term goal of getting 50% of its energy from non-fossil sources by 2030 – is the country on track?
We are less than six years away from the near-term target, and currently, India has achieved over 225 gigawatts of its 500-gigawatt goal for renewable energy. With ongoing projects, we have a visibility of reaching 400 gigawatts in the coming years, and everything seems on track to meet that target.
In terms of wind energy, India has a total potential of 1.1 terawatts with only about 4-5% currently harnessed, leaving a significant opportunity for future development. We started from humble beginnings 30 years ago and, this year, the industry crossed the 50-gigawatt mark. This puts us halfway to achieving our 2030 target of 100 gigawatts. Looking ahead, with projects under construction, we expect to reach about 63 gigawatts by 2027, and with ongoing bids, the 100-gigawatt target seems feasible and on track.
You co-founded Suzlon in 1995. How has market demand and supply for wind energy evolved over the past 30 years?
The demand side is driven by India’s young population and overall economic growth. The government has implemented several measures to encourage the switch to green energy. One of the key steps has been the procurement of green energy by the government. By consolidating the demand from all states and running competitive bidding processes, they have created a cost-competitive market for green energy. Another major development is that the private sector in India has committed to net-zero targets, and the government has provided enabling regulatory mechanisms to make it easier for businesses to switch to green energy. Lastly, government-run industries have their own decarbonization goals, which adds to the overall demand.
On the supply side, India is well-prepared in terms of products, technology, and manufacturing. Wind energy is more advanced in terms of local production, while the solar industry is rapidly building its supply chain. Currently, India has achieved about 64% local content for wind energy and 20% for solar. India’s manufacturing capacity for wind energy is three times the current domestic need, allowing for potential exports.
Where are India’s wind farm hubs?
In terms of wind energy, India’s largest potential is found in the western and southwestern parts of the country. Key states with significant wind potential include Rajasthan, Gujarat, Maharashtra, Karnataka, Andhra Pradesh, and Kerala. Most of the wind energy capacity is located within these nine states, which also happen to be the largest in terms of industrial activity. This makes them key areas not only for wind potential but also for the demand that comes from industrial growth. These states provide both the environmental conditions for wind energy generation and the necessary infrastructure to support it.
How do Local Content Requirements (LCRs) play into the country’s strategy for energy security and competitiveness?
India's Prime Minister has outlined a clear path for the country’s aspirations, emphasizing the importance of building assets locally. The idea is that local production makes the process more sustainable, and India is positioning itself not only to supply locally but also to become a global supply chain partner, especially in the southern hemisphere. As the world increasingly looks for partners in this region, India’s supply chain is being built up to meet both local and global demand.
The Indian market is very price-sensitive, so while the government encourages local manufacturing, it is important to stay competitive. Interestingly, global players are increasingly using India as a base for exports, which further strengthens India’s role in the global renewable energy industry. There are no restrictions on global players, but the preference is for local production, which adds a layer of sustainability.
What factors distinguish India’s energy market model from those of other countries?
India’s energy market is distinguished by its focus on FDRE (Fixed and Dispatchable Renewable Energy). The government is working to make renewable energy firm by eliminating intermittency issues, allowing renewables to become a reliable energy source. This model requires developers to supply firm, dispatchable energy with a 15% forecasting accuracy within 15 minutes. As a result, renewable energy in India is increasingly comparable to conventional energy in terms of reliability. India has become one of the cheapest sources of dispatchable renewable energy globally, with wind energy at $4.5 cents, solar at $3.5 cents, and FDRE at $5.5 cents.
India’s high economic growth provides a unique advantage. While many countries struggle to transition to green energy due to existing investments in conventional energy, India’s rapid growth allows it to make the right investment choices from the start. The country can also build new grid infrastructure, designed to handle renewable energy, without the burden of upgrading old infrastructure.
De-risking capital for green projects in the Southern Hemisphere is crucial for enabling a healthy global green economy. How do you evaluate the investment landscape around renewable energy projects in India?
India has become the first destination for global capital earmarked for renewable energy in Asia, due to the country’s high economic growth, long-term stability, and strong demand for green projects. Both the private and public sectors have set ambitious sustainability targets, which attract global finance, further ensuring access to capital.
India's equity markets are buoyant and among the fastest growing, making capital readily available. On the debt side, both local and international debt markets are well-developed, with numerous international financing bodies focusing on green finance already present in India. Local specialized banks and institutes like IREDA (Indian Renewable Energy Development Agency), REC (Rural Electrification Corporation), and PFC (Power Finance Corporation) also offer financing for renewable energy projects, even for smaller companies. Additionally, the digital payment ecosystem in India has made it easier to distribute capital to the smallest projects, supporting the growth of small, medium, and large enterprises in the green energy sector.
India’s crude oil imports have risen by 214% since 2000, and oil products account for 31% of the country’s total energy consumption. What is your outlook for India's oil phase-out?
India has set a target to achieve net zero by 2070, and there is a full alignment across the country’s decision-making bodies to prioritize green energy whenever possible. India is not well-endowed with oil or coal reserves, which makes it economically beneficial to reduce oil imports and strengthen the rupee. Renewable energy helps reduce the need for foreign exchange expenditure, which is an added benefit. Conventional energy sources are still needed for base load power, but as renewable energy adoption increases and storage technologies improve, including battery and water-based storage, the phase-out of oil will accelerate.
With each passing year, as the renewable energy sector grows and proves cost-effective, the transition will speed up. Renewable energy not only provides affordable energy but also democratizes access, allowing even the smallest consumers in remote areas to generate their own power through solar panels. This makes renewables attractive to both consumers and governments, and as they become cheaper, their adoption will grow. Once carbon pricing becomes more mainstream, renewable energy will likely experience even faster adoption.
Is there a strong lobby force or stakeholder tension in India around retaining oil market share?
In India, there is not significant tension around this issue. A large part of the country’s oil reserves still depends on imports, so the lobby for retaining oil market share is limited. Additionally, major players in the conventional energy sector, including oil companies, have already started adopting renewable energy. Many oil companies now produce 10-15% of their energy from renewables, and they are shifting focus toward green hydrogen, produced using renewable energy.
This shift is happening rapidly, not only in India but also in regions like the Middle East, where even companies with substantial oil reserves are investing heavily in renewable energy. As such, India’s transition to renewables is generally met with positive acceptance, and there are fewer hurdles in terms of switching to green energy.
