India's energy transition is poised to accelerate, driven by a strategic emphasis on energy storage, enhanced transmission capacity, and the expansion of nuclear power generation. While India has made significant strides in renewable energy, with 50% of its electricity generation capacity coming from non-fossil sources like solar and wind, the intermittent nature of these sources presents challenges. The focus is now shifting towards ensuring grid stability and maximizing the potential of clean energy through intelligent integration.
The year 2025 saw the operational renewable energy capacity reach approximately 257 GW, establishing India as the world's fourth-largest renewable energy market. As of September 30, 2025, India's total installed power capacity stood at 500.89 GW, with 256.09 GW (51%) from non-fossil sources and 244.80 GW (49%) from fossil fuels.
However, the transition isn't without its hurdles. Challenges such as unsigned power purchase agreements (PPAs) and the curtailment of renewable power generation due to transmission capacity lags have emerged. Recognizing these issues, policymakers and industry stakeholders are prioritizing the development of energy storage technologies and diversifying into more stable non-fossil sources, notably nuclear power.
Energy storage is seen as crucial for managing the intermittency of renewable energy sources and ensuring a reliable power supply. India's energy storage capacity needs are projected to reach 82.32 GWh by 2026-27, escalating to 411.4 GWh by 2031-32, and potentially 2380 GWh by 2047. To support this growth, the government is providing Viability Gap Funding (VGF), covering up to 40% of capital costs for Battery Energy Storage System (BESS) projects. Amendments to the Electricity Rules have also granted energy storage systems a clear legal identity, facilitating their integration into the national electricity framework.
Nuclear power is also set to play a significant role in India's energy transition. The government aims to achieve 100 GW of nuclear power capacity by 2047 and is opening the sector to private companies. The Union Budget for 2024-25 allocated USD 270 million to nuclear projects, signaling India's commitment to expanding its nuclear energy capabilities.
Expanding transmission infrastructure is equally vital for a successful energy transition. Integrating renewable energy capacity into the national grid is a key focus area, requiring intelligent solutions and grid strengthening. Data-driven planning and the use of AI-enabled optimization are also gaining prominence, promising more granular and efficient management of generation, transmission, and storage. A new digital infrastructure framework, the India Energy Stack (IES), is poised to create a standardized and interoperable digital backbone across the energy value chain, further enhancing system-wide efficiency and renewable integration.
