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VOL. 7
SECTORAL INSIGHTS:
POWER
SCENARIOS TOWARDS VIKSIT BHARAT AND NET ZERO
VOL. 11
SOCIAL IMPLICATIONS
OF TRANSITION
SCENARIOS TOWARDS VIKSIT BHARAT AND NET ZERO Copyright © NITI Aayog, 2026
NITI Aayog
Government of India,
Sansad Marg, New Delhi–110001, India
Suggested Citation
NITI Aayog. (2026). Scenarios Towards Viksit Bharat and Net Zero - Sectoral
Insights: Power (Vol. 7)
Available at: https://niti.gov.in/publications/division-reports
Disclaimer
1. This document is not a statement of policy by the National Institution for
Transforming India (hereinafter referred to as NITI Aayog). It has been prepared
by the Green Transition, Energy, Climate, and Environment Division of NITI Aayog
under various Inter-Ministerial Working Groups (IMWGs) constituted to develop
Net-Zero pathways for India.
2. Unless otherwise stated, NITI Aayog, in this regard, has not made any representation
or warranty, express or implied, as to the completeness or reliability of the
information, data, findings, or methodology presented in this document. While due
care has been taken by the author(s) in the preparation of this publication, the
content is based on independently procured information and analysis available at
the time of writing and may not reflect the most current policy developments or
datasets.
3. The assertions, interpretations, and conclusions expressed in this report are those
of the author(s) and do not necessarily reflect the views of NITI Aayog or the
Government of India, unless otherwise mentioned. As such, NITI Aayog does not
endorse or validate any of the specific views or policy suggestions made herein by
the author(s).
4. NITI Aayog shall not be liable under any circumstances, in law or equity, for any
loss, damage, liability, or expense incurred or suffered as a result of the use of or
reliance upon the contents of this document. Any reference to specific organisations,
products, services, or data sources does not constitute or imply an endorsement
by NITI Aayog. Readers are encouraged to independently verify the data and
conduct their analysis before forming conclusions or taking any policy, academic,
or commercial decisions. SCENARIOS TOWARDS
VIKSIT BHARAT AND NET ZERO
SECTORAL
INSIGHTS: POWER
(VOL. 7)
Message from Working Group Chair Power Sector

India’s power sector stands at the core of the nation’s development and climate ambitions. As India
advances towards Viksit Bharat @2047 and pursues its commitment to achieve Net Zero emissions by 2070,
the electricity system will be central to enabling economic growth, industrial competitiveness, raising living
standards and economy-wide decarbonisation. Ensuring reliable, affordable, and sustainable electricity for
a rapidly growing economy remains a strategic national priority.

Electricity demand is set to rise sharply with urbanisation, industrialisation, digitalisation, and the
electrification of transport, buildings, and industry. Meeting this demand while reducing emissions requires
a carefully balanced approach that ensures energy security, system reliability, and affordability for all
consumers, while accelerating low-carbon transition.

Renewable energy will form the backbone of India’s future electricity system, supported by large-scale
deployment of energy storage, strengthened transmission networks, and modernised grid operations. At
the same time, clean firm power sources will play a critical role in ensuring system stability. Nuclear energy,
as a reliable, low-carbon source of baseload and generation, will be an important component of India’s
long-term power mix. Expanding nuclear capacity with ability to flex the generation, including advanced
and small modular reactor technologies, can provide dependable electricity while complementing high
shares of variable renewable energy.

In the near to medium term, coal will continue to play a role in maintaining grid reliability and meeting
rising electricity demand, particularly during periods of high system stress. The focus, therefore, must be
on improving the efficiency, flexibility, and environmental performance of the existing coal fleet, while
avoiding long-term lock-ins that could undermine the net-zero pathway.

This report presents a rigorous, integrated assessment of India’s power sector pathways under current
policy and net zero scenarios. By linking economy-wide electricity demand with detailed capacity expansion
and system operation modelling, it provides clear insights into the evolving role of renewables, storage,
nuclear, coal, and grid infrastructure. The report highlights the critical role of flexibility, storage, and grid
modernisation in enabling high penetration of variable renewable energy and underscores the importance
of timely investments and policy sequencing in minimising system costs and risks.

Promoting the procurement of capacity and energy through market-based instruments will be essential to
keep the system costs lower. In addition, greater thrust on distribution reforms aiming at efficiency
improvements, digitalisation coupled with data analytics and commercial orientation in governance of the
utilities will be of paramount importance for timely mobilising the necessary investments in whole of the
value chain and for necessary upgrades and augmentation of networks to improve reliability of supply.

The findings reinforce that low-carbon transition in the power sector is the single most powerful lever for
achieving economy-wide emissions reduction. A cleaner electricity grid amplifies the benefits of
electrification in transport and industry, enhances energy security by reducing fossil fuel imports, and
supports domestic manufacturing and job creation.

I commend the authors for their analytical rigour and for presenting a balanced and pragmatic roadmap for
India’s power sector transition. This report provides valuable insights for policymakers, regulators, utilities,
investors, and other stakeholders, and will support informed decision-making as India charts a resilient,
affordable, and sustainable electricity future aligned with its developmental and strategic priorities.

(Alok Kumar)
Former Union Power Secretary

viiiScenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Power ixScenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Power
Authors and
Acknowledgement
Chairperson
Sh. Alok Kumar
Former Secretary, Ministry of Power
Leadership
Sh. Suman Bery
Vice Chairman, NITI Aayog
Sh. B.V.R. Subrahmanyam
CEO, NITI Aayog
Dr. Anshu Bharadwaj
Programme Director, Green Transition,
Energy & Climate Change Division,
NITI Aayog
Sh. Ghanshyam Prasad
Chairperson, Central Electricity Authority
Sh. A. Balan
Member (Planning),
Central Electricity Authority
Sh. Rajnath Ram
Advisor, NITI Aayog
Core Modelling Team
NITI Aayog
Sh. Venugopal Mothkoor
Energy and Climate Modelling Specialist,
NITI Aayog
Dr. Anjali Jain
Consultant Grade-2, NITI Aayog
Sh. Nitin Bajpai
Consultant, NITI Aayog
Central Electricity Authority (CEA)
Sh. Ishan Sharan
Chief Engineer, CEA
Ms. Ammi Ruhama Toppo,
Chief Engineer, CEA
Sh. Apoorva Anand
Deputy Director, CEA
Sh. Himanshu Nagpal
Assistant Director, CEA
Authors
NITI Aayog
Sh. Venugopal Mothkoor
Energy and Climate Modelling Specialist,
NITI Aayog
Dr. Anjali Jain
Consultant Grade-2, NITI Aayog
Sh. Nitin Bajpai
Consultant, NITI Aayog
Sh. Prince Tiwari
Former Young Professional, NITI Aayog
Ms. Srishti Dewan
Young Professional, NITI Aayog Central Electricity Authority (CEA)
Sh. Himanshu Nagpal
Assistant Director, CEA
Knowledge Partners
Sh. Saurabh Kumar
Former Vice President, GEAPP
Sh. Raghav Pachouri
Associate Director, Vasudha Foundation
Ms. Sana Khan
Sr. Policy Officer, Vasudha Foundation
Sh. Ashok Sreenivas
Senior Fellow, Prayas Energy Group
Sh. Ashwin Gambhir
Fellow, Prayas Energy Group
Peer Reviewer
Sh. Irfan Ahmad
Chief Engineer, CEA
Sh. Ishan Sharan
Chief Engineer, CEA
Sh. Sharath K Parella
Advisor, MoEFCC
Sh. Ronnie Khanna,
Programme Lead, NITI Aayog
Sh. Rohit Pathania
Consultant, NITI Aayog
Dr. Rahul Tongia
Senior Fellow, CSEP
Sh. Ashok Sreenivas
Senior Fellow, Prayas Energy Group
Sh. Raghav Pachouri
Associate Director, Vasudha Foundation
Working Group Members
Sh. Ghanshyam Prasad
Chairperson, CEA
Sh. Abhay Bakre
Mission Director, National Green Hydrogen
Mission
Sh. Rajnath Ram
Advisor, NITI Aayog (Member Secretary)
Sh. Parthasarthi Reddy
Program Director, NITI Aayog
Sh. Antony Cyriac
Advisor, DEA
Sh. S. R. Narasimhan
Former CMD, Grid India
Sh. Anandji Prasad
Advisor, Ministry of Coal
Dr. Neeraj Sinha
Scientist 'G', PSA
Sh. Sharath K Parella
Advisor, MoEFCC
Sh. Ishan Sharan
Chief Engineer, CEA
Sh. Irfan Ahmad
Chief Engineer, CEA
Sh. M. M. Dhakate
Chief Engineer, CEA
Sh. Goutam Ghosh
Chief Engineer, CEA
Dr. Deep Prakash
OSD, Department of Atomic Energy xiScenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Power
Sh. Suhas Dambhare
Sr. General Manager, Grid-India
Sh. Vibhay Kumar
Executive Director, PGCIL
Sh. Ritesh Ranjan
DGM, PGCIL
Ms. Suman Chandra
Director, MNRE
Sh. Sanjay Karndhar
Scientist 'E', MNRE
Sh. Kapil Verma
Director, MoPNG
Sh. Ajay Raghava
Scientist 'E', MoEFCC
Sh. Subhro Paul
Director (F&CA), CEA
Sh. Sovaram Singh
Director, CEA
Sh. Ravi Shankar Prajapati
Joint Director, BEE
Sh. A.K. Saxena
Senior Fellow and Senior Director, TERI
Dr. Rahul Tongia
Senior Fellow, CSEP
Sh. Saurabh Kumar
Former Vice President, GEAPP
Ms. Reena Suri
Executive Director, ISGF
Sh. Sirish Sankhe
Director, ISEG Foundation
Sh. Ashok Sreenivas
Senior Fellow, Prayas Energy Group
Sh. Ashwin Gambhir
Fellow, Prayas Energy Group
Ms. Disha Agrawal
Sr. Program Lead, CEEW
Sh. Raghav Pachouri
Associate Director, Vasudha Foundation
Sh. Vaibhav Chowdhary
Director, ACPET
Editors
Ms. Aastha Manocha
Editor and Communication Consultant
(Independent)
Ms. Rishu Nigam
Communication Specialist (Independent)
Communication and Research &
Networking Division, NITI Aayog
Ms. Anna Roy
Programme Director, Research & Networking
Sh. Yugal Kishore Joshi
Lead, Communication
Ms. Keerti Tiwari
Director, Communication
Dr. Banusri Velpandian
Senior Specialist, Research and Networking
Ms. Sonia Sachdeva Sharma
Consultant, Communication
Sh. Sanchit Jindal
Assistant Section Officer, Research and
Networking
Sh. Souvik Chongder
Young Professional, Communication
NITI Design Team
NITI Maps & Charts Team xiiScenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Power xiiiScenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Power
Contents
List of Figuresxv
List of Tablesxvi
List of Abbreviations xvii
Executive Summaryxxi
Background xxvii
1. Introduction��1
1.1 Electricity Consumption and Economic Growth3
1.2 Evolution of the Indian Power Sector5
1.3 Electricity Supply-Demand Position in India7
1.4 Electricity Capacity, Generation, Transmission, and Consumption in India7
1.5 Electricity Market: From Bilateral Dominance to Exchange-Led Competition11
2. Current Policy Landscape��15
2.1 Policy Initiatives for Low-Carbon Transition of Power Sector16
2.2 Policy Initiatives for Infrastructure Development and Grid Modernisation20
2.3 State-Level Policies and Initiatives22
3. Methodology for Power Sector Modelling�� 25
3.1 Methodology Description26
3.2 Scenario Description27
3.3 Electricity Demand Projections: Methodology and Key Assumptions 28
3.4 Capacity Expansion Planning: Methodology and Key Assumptions33
4. Scenario Results��39
4.1 Total Electricity Consumption40
4.2 Load Curve and Peak Demand42
4.3 Transmission and Distribution (T&D) Losses43
4.4 Scenario Results44
4.5 Limitations55 Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Power xiv
Contents
4.6 Future Enhancements57
5. Challenges and Opportunities��59
5.1 Challenges60
5.2 Opportunities for a Clean Energy Future65
6. Key Suggestions��71
6.1 Generation Sector72
6.2 Transmission and Distribution Sector75
6.3 Cross-cutting Sustainability and Innovation77
6.4 Policy and Regulatory78
6.5 Project Financing79
Annexures.............................................................................................................................................81
References...........................................................................................................................................89 xvScenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Power
List of Figures
Figure 1.1 Trends of electricity consumption and GDP: USA, UK, France, Germany 3
Figure 1.2 Trends of electricity consumption and GDP: India and China4
Figure 1.3 Per Capita electricity consumption trend (in kWh per capita)4
Figure 1.4 Energy and electricity intensity to GDP: USA, China, and India 5
Figure 1.5 Peak and energy requirement, availability, and deficit 7
Figure 1.6
India’s installed capacity (utility) of electricity generation as of
December 2025
8
Figure 1.7 Installed capacity/ share of different resource category (utility) 8
Figure 1.8 Installed capacity of different RE resources (utility)9
Figure 1.9 Electricity generation by different sources 9
Figure 1.10 Growth of transmission lines in India10
Figure 1.11 Growth of electricity consumption11
Figure 1.12 Overview of India’s short-term power market11
Figure 1.13 Journey of the Indian power market12
Figure 1.14 Overview of power traded on exchanges13
Figure 1.15 Average price of electricity (exchange vs bilateral trading) 14
Figure 2.1 Key policies and schemes in India’s power sector17
Figure 3.1 Methodology for power sector modelling27
Figure 3.2 Description of timeslices considered in this study34
Figure 3.3 Schematic structure of the power sector models34
Figure 4.1
Sectoral electricity consumption in Current Policy Scenario (CPS)
and Net Zero Scenario (NZS)
41
Figure 4.2a Demand Profile for a representative day, 202443
Figure 4.2b Demand profile for a representative day, 206943
Figure 4.3a Capacity mix in Current Policy Scenario 46
Figure 4.3b Capacity mix in Net Zero Scenario46
Figure 4.4a Generation mix in Current Policy Scenario 48
Figure 4.4b Generation mix in Net Zero Scenario48
Figure 4.5
Per capita electricity consumption under Current Policy Scenario (CPS)
and Net Zero Scenario (NZS)
49 xviScenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Power
Figure 4.6
Land requirement under Current Policy Scenario (CPS)
and Net Zero Scenario (NZS)
50
Figure 4.7
Water requirement under Current Policy Scenario (CPS)
and Net Zero Scenario (NZS)
52
Figure 4.8
Investment requirements under Current Policy Scenario (CPS)
and Net Zero Scenario (NZS)
53
Figure 4.9
Grid emission factors under Current Policy Scenario (CPS)
and Net Zero Scenario (NZS)
55
Figure 5.1 Schematic of VPPA67
Figure 6.1 Generation and Distribution Franchisee (GDF)80
List of Tables
Table E.1 A snapshot of power sector by 2050 and 2070xxii
Table 2.1 PM-KUSUM achievements as on 30.12.202518
Table 3.1 Assumptions for projecting electricity consumption in agriculture sector29
Table 3.2 Assumptions for projecting electricity consumption in the transport sector 30
Table 3.3 Assumptions for projecting electricity consumption in the building sector31
Table 3.4 Assumptions for projecting electricity consumption in the industry sector32
Table 3.5 Technology potential constraints36
Table 3.6 Technology expansion constraints (maximum annually)36
Table 3.7 Cost estimates for various generating technologies37
Table 4.1
Capacity mix across two models in Current Policy Scenario (CPS)
and Net Zero Scenario (NZS)
46
Table 4.2
Generation mix across two models in Current Policy Scenario
and Net Zero Scenario
48
Table 4.3
Investment requirements under Current Policy Scenario (CPS)
and Net Zero Scenario (NZS)
54 xviiScenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Power
List of Abbreviations
AT&CAggregate Technical & Commercial Losses
AUSCAdvanced Ultra Supercritical
BCMBillion Cubic Metres
BEEBureau of Energy Efficiency
BESSBattery Energy Storage System
BPKMs Billion Passenger-Kilo Metres
BTKMs Billion Tonne-Kilo Metres
BUBillion Units
BWRBoiling Water Reactor
CAGRCompounded Annual Growth Rate
CAPEX Capital Expenditure
CCCCarbon Credit Certificate
CCTSCarbon Credit Trading Scheme
CCUSCarbon Capture, Utilisation and Storage
CEACentral Electricity Authority
CKMCircuit Kilo Metres
CPSCurrent Policy Scenario
CSPConcentrated Solar Power
CUFCapacity Utilisation Factor
DAMDay Ahead Market
DERDistributed Energy Resources
DISCOMs Distribution Companies
DSMDeviation Settlement Mechanism
EPSElectric Power Survey
FBRFast Breeder Reactor
GDAMGreen Day-Ahead Market
GDPGross Domestic Product Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Power xviii
List of Abbreviations
GECGreen Energy Corridor
GENCOs Generation Companies
GHGGreen House Gas
GTAMGreen Term-Ahead Market
GWGigawatt
HNUHigh Nuclear
HREHigh Renewable Energy
IESSIndia Energy Security Scenarios
IGCCIntegrated Gasification Combined Cycle
IMWGs Inter-Ministerial Working Groups
LEMLocal Energy Market
LWRLight Water Reactor
MMTMillion Metric Tonne
MtCO
2
e Million Tonnes of Carbon Dioxide Equivalent
MTPAMillion Tonne Per Annum
MUMillion Units
NDCNationally Determined Contribution
NEPNational Electricity Policy
NISENational Institute of Solar Energy
NIWENational Institute of Wind Energy
NSGM
NZS
National Smart Grid Mission
Net Zero Scenario
OSOWOG One Sun One World One Grid
PHWRPressurised Heavy Water Reactor
PIBPress Information Bureau
PLFPlant Load Factor
PLIProduction Linked Incentive
PM-KUSUM Pradhan Mantri Kisan Urja Suraksha evam Utthaan Mahabhiyaan
PPAPower Purchase Agreement
PPPPublic-Private Partnership
PSPPumped Storage Plant
PVPhotovoltaic
PWRPressurised Water Reactor
R&DResearch And Development Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Power xix
List of Abbreviations
RDSSRevamped Distribution Sector Scheme
RECRenewable Energy Certificate
RESRenewable Energy Sources
RPORenewable Purchase Obligation
RTMReal Time Market
RTSRooftop Solar
TBCBTariff Based Competitive Bidding
TRANSCOs Transmission Companies
SEBState Electricity Board
SERCs State Electricity Regulatory Commissions
SMRSmall Modular Reactor
SPVSolar Photovoltaic
TAMTerm Ahead Market
T&DTransmission And Distribution
TIMES The Integrated MARKAL-EFOM System
ToU/ToD Time of Use/Time of Day
TWhTerawatt-Hour
UDAYUjwal Discom Assurance Yojana
UKUnited Kingdom
USUnited States of America
VPPAs Virtual Power Purchase Agreements
VPPsVirtual Power Plants
VREVariable Renewable Energy
WACCWeighted Average Cost of Capital Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Power xxi
Executive Summary
Executive Summary
India’s development and climate goals increasingly hinge on one system: electricity. As India
moves toward Viksit Bharat 2047 and Net Zero 2070, the power sector's growth will determine
whether growth can be both inclusive and sustainable. Reliable, affordable, and progressively
cleaner electricity is essential to improve living standards, raise productivity, and unlock a low-
carbon transition across transport, buildings, and industry.
Over the past two decades, the power sector has delivered major gains: universal household
electrification, rapid expansion of the national grid, and a sustained scale-up of renewable
capacity. India has also accelerated its shift toward low-carbon electricity - by July 2025, over
50% of installed utility-scale electricity capacity is based on non-fossil fuel-based generation
technologies, enabling India to meet its revised Nationally Determined Contribution (NDC) target
five years ahead of schedule (PIB, 2025). With nearly 258 GW of renewable energy capacity
installed by December 2025, India has emerged as the world’s fourth-largest renewable energy
market, reflecting the scale and momentum of its clean energy expansion.
The next phase, however, is more complex. Demand will rise sharply with urbanisation, cooling,
digitalisation, electric mobility, and green hydrogen, and the system is required to absorb much
higher shares of variable renewables. Meeting these twin pressures will require not just adding
capacity, but strengthening flexibility and resilience through storage, transmission expansion,
modern grid operations, and financially viable distribution to ensure that clean electricity
continues to be reliable and affordable as it scales.
Against this complex and dynamic backdrop, NITI Aayog constituted an Inter-Ministerial Working
Group to examine India’s long-term power sector transition, with a mandate to assess future
electricity demand, low-carbon supply options, system reliability, and investment requirements
under various scenarios. To quantify pathways that couple development with cleaner power,
this study models India’s electricity transition through 2070 under two lenses: a Current Policy
Scenario extending today’s trajectory, and an ambitious Net-Zero Scenario aligned with national
2070 net-zero goals.
Key Modelling Insights
Integrated Modelling Approach: The analysis adopts an integrated energy modelling framework,
in which electricity demand is projected using macroeconomic growth, urbanisation trends,
sectoral elasticities, and technology adoption patterns. This is coupled with detailed power
sector planning models to derive system outcomes. End-use demand across transport, industry,
buildings, cooking, and agriculture is projected using The Integrated MARKAL-EFOM System
(TIMES) and India Energy Security Scenarios (IESS) models, while capacity expansion, generation, Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Power xxii
Executive Summary
storage, and system operations are simulated using the TIMES and ORigin-DEstiNAtion data
exploration (ORDENA) power-sector models.
The two power sector models are aligned on demand projections and reconciled on capacity
and generation results. The use of two independently structured power sector models enhances
the robustness and credibility of the decarbonisation pathways.
Table E.1 provides a snapshot of power sector by 2050 and 2070 under two scenarios modelled
in this study.
Electrification-Led Demand Surge: India’s energy transition will be defined by rapid electrification
across the economy, pushing electricity demand on to a much steeper trajectory. Electricity’s
share in final energy is projected to increase from ~21% in 2025 to nearly 40% in the Current
Policy Scenario (CPS) and 60% in the Net Zero Scenario (NZS) by 2070, driven by high EV
penetration, greater use of electric industrial heat (heat pumps/electric boilers), and a shift
toward electric cooking.
As a result, per-capita electricity consumption increases from 1,400 kWh in 2025 to 7,000 -
10,000 kWh by 2070, moving toward levels seen in advanced economies such as France and
the Republic of Korea. This reflects both rising living standards and a structural shift toward
electricity as the dominant energy carrier.
Crucially, this electrification-led demand expansion also defines the pace and depth of India’s
economy-wide low-carbon transition. As mobility, industry, and buildings shift towards electric
and hydrogen-based systems, the climate benefit of these transitions becomes critically
dependent on the emissions intensity of the power grid itself. A rapid decline in grid CO₂
intensity enables deep abatement across end-use sectors, while a persistently carbon-intensive
grid would severely constrain their mitigation potential.
Table E.1: A snapshot of power sector by 2050 and 2070
Indicators2023-24
Current Policy ScenarioNet Zero Scenario
2050 2070 2050 2070
Total Electricity Consumption (TWh) 1541 6,544 9,718 8,070 12,997
Per-capita Electricity Consumption (kWh) 1,400 ~4,800 ~7,400 ~6,400 ~10,000
Total Capacity (GW) (including captive) 523
2,500-
2,800
4,650-
4,750
3,800-
3,830
6,800-
7,350
VRE (Solar + Wind) Capacity (GW)
(including captive)
136
1,890-
2,200
4,150-
4,200
3,150-
3,200
6,150-
6,700
Share of Non-fossil Fuel-Based
Generation Capacity (including captive)
40% 81-83% 94-95% 89% 98%
Grid Emission Factor (kgCO
2
/kWh) 0.727 0.328 0.067 0.257 0.0
BESS Capacity (GW)<0.5 420-520
1,300–
1,400
900-1,150
2,500–
3,000
Pumped Hydro Capacity (GW)3.3 117 131-163 117 150-165
Total Investment Required (Trillion USD)
3.5 (2025-
2050)
5.2
(2050-
2070)
5.15
(2025-
2050)
9 (2050-
2070) Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Power xxiii
Executive Summary
Scale and Composition of Capacity: By 2070, total installed capacity is projected to be
nine times in current policy scenario and 14 times in net-zero scenario. The capacity mix
shifts decisively toward Variable Renewable Energy (VRE): the share of RE capacity (utility
+ captive) grows from about 43% in 2025 to about 90–93% by 2070. Solar PV becomes the
backbone with capacity reaching 3250 GW – 5500 GW under two scenarios; onshore wind
exceeds 1,000 GW, with offshore wind of about 50–70 GW as identified potential is tapped.
The VRE-led transition extends beyond utility-scale projects to include decentralised
solutions such as rooftop solar, building-integrated PV, agrivoltaics, and other behind-the-
meter resources. These options reduce land-use pressures, ease grid congestion, strengthen
resilience, and support more inclusive energy participation, particularly in urban, agricultural,
and industrial areas. By improving alignment between local generation and demand,
distributed renewables complement utility-scale VRE while enhancing energy access and
local economic benefits.
However, penetration of high variable renewables re-shapes system design and operations,
making energy storage and flexibility essential. Battery storage is projected to expand
from negligible levels today to about 1,300–1,400 GW under Current Policy Scenario and
2,500–3,000 GW under Net Zero Scenario by 2070, while pumped hydro reaches around
150–160 GW. These resources are critical for adequacy, managing variability, and maintaining
reliability in a renewables-dominated grid.
Nuclear is Critical for Providing Firm and Clean Power: Nuclear energy emerges as a
strategic pillar of India’s long-term power transition, scaling from 8.8 GW in 2025 to over
300 GW by 2070, providing firm, dispatchable, low-carbon power that is essential for
maintaining system reliability in a renewables-dominated grid.
Beyond large conventional reactors, newer nuclear solutions, particularly Small Modular
Reactors (SMRs), assume a critical role by enabling flexible and modular deployment,
enhancing safety and cost scalability, and supporting decarbonisation in hard-to-abate
sectors.
Resources Footprint: Land requirements rise with the build up of Variable Renewable
Energy (VRE), but remain a modest share of national wasteland - nearly 7.2% in Current
Policy Scenario and 12% in Net Zero Scenario of current wasteland by 2070. Nuclear has
compact direct land use but requires safety buffers. Water intensity declines over time as
fossil-fuel powered thermal shares fall, as solar/wind are minimal water users.
Investment Imperative: The scale of transformation implied by India’s power sector transition
is unprecedented and fundamentally capital-intensive. Cumulative investment requirements
reach approximately USD 8.79 trillion in Current Policy Scenario and USD 14.23 trillion in Net
Zero Scenario by 2070. These investment needs extend well beyond generation capacity
alone and encompass the rapid deployment of storage systems and large-scale expansion
of transmission and distribution networks.
Key Policy Suggestions/Levers
1) Generation & Portfolio Design
Scale solar-wind-storage hybrids: These hybrids must be the default utility product
to improve land-use efficiency, reduce curtailment, lower transmission stress, and Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Power xxiv
Executive Summary
deliver firmer clean power. This should be operationalised through identification of
priority hybrid zones, streamlined land aggregation, single-window clearances and
assured transmission build-out.
Nuclear as clean firm power: Implement the SHANTI Act to enable rapid scale-up
of nuclear capacity, targeting 100 GW by 2047 and 200-300 GW by 2070, coupled
with enabling reforms to support flexible operation while ensuring cost recovery.
Operational flexibility in new nuclear plants is required to enable load-following,
grid balancing, and better integration with variable renewable energy. Dedicated
budgetary support should be ensured for the development and deployment of Small
Modular Reactors (SMRs) to accelerate clean firm power and enable decarbonisation
of hard-to-abate sectors.
Mainstream decentralised and land-neutral renewable energy: Institutionalise
decentralised and land-neutral renewable energy as a core pillar of India’s transition,
particularly rooftop solar, agrivoltaics, floating solar, and building-integrated PV, to
reduce land pressure, T&D losses, and geographic concentration risks. This requires a
dedicated Viability Gap Funding (VGF) mechanism for such solutions, standardised
Renewable Energy Service Company (RESCO) and utility-led aggregation models.
Hydro & pumped storage plants: Fast track siting, clearances, and viability support
for long-duration storage (project preparation facilities; standardised risk allocation
in contracts).
2) Transmission & Distribution
Transmission build-out: Expand Green Energy Corridors (GEC) and inter-regional
High Voltage DC (HVDC) lines; institute rolling, bankable multi-year Tariff-Based
Competitive Bidding (TBCB) pipelines; pre-approve corridors/land banks.
Transmission pricing to ensure economic transmission costs: Transmission tariffs
should be designed to recover the actual cost of building and operating the network
and to guide efficient system expansion. Avoiding cross-subsidies will prevent
distorted generation siting and efficient power flows, leading to better location
decisions and lower overall system costs.
Distribution transformation: establish Distribution System Operator (DSO) functions
for real-time operations; granular loss reduction targets at feeder level; universal
smart metering; Time-of-Day/Time-of-Use (ToD/ToU) tariffs with demand response
and dynamic procurement by DISCOMs.
Viability Gap Funding (VGF) approach instead of waiver of transmission charges:
VGF should be provided to specific technologies/projects which are temporarily
unviable, instead of waiving transmission charges for all users (which hides the real
cost of the network).
Digitise and automate the grid for high-renewable operations: Enable end-to-
end digitalisation of the electricity system, including universal rollout of smart and
prepaid meters, SCADA/ADMS/OMS platforms, feeder automation, and predictive
maintenance systems. This should be complemented by deployment of distribution
digital twins, operationalisation of the Unified Energy Interface (UEI) for consent- Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Power xxv
Executive Summary
based data sharing, and standardised protocols for demand response, prosumer
settlement, and dynamic tariffs.
3) Policy and Regulatory
Deepen power markets: Expand day-ahead/intraday liquidity; introduce flexibility/
ancillary/capacity products; develop electricity derivatives for hedging; scale Local
Energy Markets (LEMs) for trading of Distributed Energy Resources (DERs) and
congestion relief.
A strong policy thrust is required to bring captive consumption within the grid
supply framework, ensuring fair cost sharing, optimal grid utilisation, and long-term
system sustainability.
4) Cross-Cutting
Build domestic manufacturing and circular clean energy supply chains: Strengthen
domestic manufacturing depth across solar, wind, storage and electrolyser value
chains by expanding PLI schemes beyond modules to batteries, inverters and critical
equipment, while closing the loop on PV and battery waste through enforceable
recycling and traceability standards. Complement this with VGF and Output Linked
Incentive frameworks for large-scale recycling and high-purity material recovery.
Research and Development (R&D) and workforce: Set up clean tech R&D hubs;
industry–academia consortia; align national skilling programmes with emerging
clean energy industries by reskilling coal and thermal power workers for renewable,
storage, and grid-service roles, expanding vocational certification for installers,
Operation and Maintenance (O&M) technicians, and digital grid specialists.
Land & permitting: Create state centre land banks and single-window clearances
for RE, storage, and transmission; digitise land records; promote leasing/pooling
and community benefit sharing; scale floating PV and agrivoltaics to ease land
pressure.
5) Finance & Investment Enablement
Concessional finance is critical to absorb the impact of higher upfront capital
expenditure, particularly for emerging and capital-intensive technologies, and to
improve overall project bankability. This can be supported through credit enhancement
mechanisms, such as sovereign or DFI guarantees, revenue securitisation, and state-
backed bonds for DISCOMs and T&D programmes. In parallel, enabling Virtual Power
Purchase Agreements (VPPAs) and large-scale corporate procurement through
stable and predictable open access rules will help mobilise private investment and
lower the cost of capital across the sector.
Economic and Social Co-benefits:
Energy security and price stability via diversified, domestic resources and moderated
exposure to volatile fossil imports.
Industrial development through "Make in India", clean tech manufacturing (modules,
nacelles, towers, cells, electrolysers), creating deep value chains. Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Power xxvi
Executive Summary
Jobs and entrepreneurship across Engineering, Procurement, and Construction
(EPC), Operation & Maintenance (O&M), logistics, digital grid services, recycling,
and R&D.
Regional development through renewable-rich investments, Pumped Storage
Projects (PSPs), and associated MSME clusters.
India’s power transition is feasible at scale with a storage-backed, digital and market-
enabled grid. The Net Zero pathway requires significantly larger clean capacity and
storage deployment, stronger nuclear and hydro complements, deep market reforms,
and substantially higher investment mobilisation. With deliberate and coordinated policy,
financing, and institutional reforms over the coming decade, India can deliver a reliable,
affordable, and low-carbon power system that underwrites sustained economic growth, job
creation, and climate leadership through 2070. Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Power xxvii
Background
Background
India stands at a defining juncture in its development journey. As the world’s fastest-growing
major economy, the nation has set an aspirational target of becoming a developed nation (Viksit
Bharat) by 2047. Achieving these goals demands sustained, inclusive economic growth that is
tightly aligned with India’s long-term climate and sustainability objectives. Electricity lies at the
heart of India’s transformation. Reliable, affordable, and clean electricity will underpin progress
in every sector of the energy economy, including industry, transport, agriculture, and services,
while enabling a higher quality of life for citizens across both urban and rural India.
Over the past two decades, India has achieved remarkable progress in expanding access and
improving the reliability of electricity supply. Universal household electrification, large-scale
renewable energy deployment, and rapid grid expansion have transformed the sector. As of July
2025, non-fossil electricity sources already account for more than 50% (PIB, 2025) of India’s
installed utility-scale electricity capacity, achieving the revised NDC target five years ahead of
schedule. India’s renewable capacity is the fourth largest in the world today, with a capacity of
220 GW as of March 2025.
As the economy grows and urbanisation deepens, electricity demand is projected to rise
sharply, driven by increased use of air conditioning, digital services, electric mobility, and
industrial electrification. This surge in demand without a transition to low-carbon electricity
generation will lead to higher emissions. In 2020, the power sector contributed to roughly
52.07% of energy-related emissions and nearly 39.4% of total national Greenhouse Gas (GHG)
emissions (MoEFCC, 2024). Low-carbon transition in the power sector is not only crucial for
meeting India’s climate targets but also for enabling other sectors to cut their own emissions
by accessing cleaner electricity. The challenge, however, is multifaceted. India must carefully
balance the three imperatives of the energy trilemma: ensuring energy security amid rising
demand; maintaining affordability and reliability for consumers and industry; and advancing
sustainability through rapid expansion of low-carbon generation. Achieving this balance will
require coordinated policy action, substantial investments, and systemic transformation across
generation, transmission, distribution, and power markets. This transformation from a fossil-
dominant power system to a non-fossil will require large-scale integration of renewable energy,
flexible generation, advanced storage systems, and strong transmission networks to maintain
grid stability.
Inter-Ministerial Working Group on Power Sector
Recognising the pivotal role of electricity in India’s Net Zero ambition, NITI Aayog constituted
multiple Inter-Ministerial Working Groups (IMWGs) to chart sectoral pathways for a 2070 Net Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Power xxviii
Background
Zero economy. The Working Group on Power Sector has been tasked with examining strategies
and developing a roadmap for low-carbon transition of the power sector while ensuring reliability,
flexibility, and financial viability.
Chaired by: Sh. Alok Kumar, Chairperson, Former Secretary, Ministry of Power
The broad terms of reference of this WG include:
(i) Assess electricity demand in Net Zero and other scenarios;
(ii) Examine the optimal capacity mix in different scenarios for power sector
decarbonisation;
(iii) Assess scenarios for unabated coal use and coal phase-down;
(iv) Examine grid stability considering increasing penetration of intermittent renewable
energy and propose measures for ensuring resource adequacy and grid reliability;
(v) Examine transmission infrastructure requirements for future supply mix scenarios;
(vi) Examine the role of advanced technologies such as green hydrogen, Advanced
Ultra Supercritical Technology (AUSC), Small Modular Reactors (SMRs), offshore
wind, and alternative battery chemistry, etc., in the power sector transition and their
competitiveness;
(vii) Examine changes in load pattern considering demand electrification in the transport/
building sector and new emerging loads such as data centres;
(viii) Examine reforms (including regulatory) required in electricity distribution companies
(DISCOMs) to facilitate power sector transition and uptake of clean technologies;
(ix) Estimate the total capital investment required for the transition of the power sector.
This study explores how the power sector can enable India’s transition to a low-carbon energy
system that supports both economic growth and environmental stewardship. It analyses key
drivers, challenges, and policy measures to ensure that India’s electricity system remains resilient,
affordable, and clean, powering the nation’s journey toward Viksit Bharat 2047 and Net Zero
2070. 1
INTRODUCTION 2Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Power
Introduction
India’s power sector is central to the nation’s economic growth and development. As the world’s
third-largest producer and consumer of electricity, India has witnessed a remarkable transformation
in its power sector landscape over the past few decades (IBEF). From facing chronic power
shortages to becoming one of the fastest-growing and most dynamic sectors globally, the
evolution of India’s electricity sector reflects broader changes in policy, rapid advancement
in technologies, and a shift in demand patterns. Reforms such as the vertical unbundling of
State Electricity Boards (SEBs) into Generation Companies (GENCOs), Transmission Companies
(TRANSCOs) and Distribution Companies (DISCOMs) (Ministry of Power); the creation of a
unified national grid by synchronising all regional grids (Ministry of Power); and the introduction
of market-based mechanisms have significantly reshaped the structure and performance of the
power sector.
The next phase of this evolution will be even more consequential. As India moves toward a low-
carbon future, the power sector will transition from a system historically dominated by fossil
fuels to one increasingly powered by low-carbon electricity. This transformation will require
not only the rapid expansion of Renewable Energy (RE) but also substantial enhancements
in system reliability, flexibility, and resilience. Integrating large volumes of Variable RE (VRE),
strengthening transmission networks, deploying advanced storage solutions, and modernising
grid operations will be essential to ensure that low-carbon electricity remains both reliable
and affordable. Together, these changes will define the next era of India’s power sector, where
sustainability, reliability, and security stand at the forefront of national electricity planning.
However, understanding how the sector has evolved to this point is essential for assessing the
scale and nature of the transformation that lies ahead.
Accordingly, this chapter begins by examining the relationship between electricity consumption
and economic growth, drawing comparisons with developed countries to illustrate how
industrialisation, technological innovation, and strategic policy interventions have historically
influenced the electricity system globally. It then traces the evolution of India’s power sector,
highlighting key milestones from early electrification efforts to recent surge in RE deployment.
The chapter provides a detailed assessment of India’s current electricity landscape, including
generation capacity, transmission infrastructure, and sector-wise consumption patterns, for
a clear understanding of its operational and infrastructural foundation. By establishing this
historical and structural context, this chapter lays the foundation for analysing India’s future
energy trajectory and the implications for power sector decarbonisation in subsequent sections.
1 Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Power 3
Introduction
1.1 ELECTRICITY CONSUMPTION AND ECONOMIC GROWTH
As an economy grows, driven by industrialisation, urbanisation and rising living standards,
so does the need for electricity, thus fuelling sectors such as manufacturing, services and
infrastructure. In developed nations such as the United States of America (USA), Germany
and the United Kingdom (UK), electricity consumption increased during their industrialisation
phases, facilitating their economic growth. However, in recent years, these countries have
managed to decouple electricity demand from Gross Domestic Product (GDP) growth. This
is because of energy efficiency improvements, technological advancements, or sectoral shifts
(from manufacturing to services).
For example, electricity consumption in the USA increased consistently from ~300 TWh in 1950
to 3,811 TWh in 2005 (Ritchie, n.d.). It saturated at 3,700-3,900 TWh during 2010-23 even as
nominal GDP grew by 82% during this period (World Bank, n.d.). The UK, Germany and France
had similar long-term trends of stabilising electricity consumption alongside rising GDP, with
some fluctuations in the economic growth over the years, as shown in Figure 1.1.
0
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USA
GDP Electricity Consumption
Nominal GDP (Trillion USD)
Figure 1.1: Trends of electricity consumption and GDP: USA, UK, France, Germany, highlighting
that GDP growth & electricity are decoupled after certain level
Source: Our World in Data
The trajectory of developing countries like China and India mirrors that of developed nations during
their earlier growth stages. China’s nominal GDP increased 93 times (from 191 billion USD in 1980
to 17,795 billion USD in 2023) (World Bank) and had a massive increase in electricity consumption
(nearly 35 times) during the same period, reflecting its manufacturing-heavy and energy-intensive Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Power 4
Introduction
economy. India’s nominal GDP has grown nearly 19 times (Our World in Data) while electricity
consumption has grown nearly 15 times from 1980 to 2023 (as shown in Figure 1.2).
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Nominal GDP (Trillion USD)
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GDP Electricity Consumption
Figure 1.2: Trends of electricity consumption and GDP: India and China
Though India’s per capita electricity consumption has increased over the years, it still remains
considerably below that of developed nations (as seen in Figure 1.3). India’s per-capita electricity
consumption stands at 1/10th of the USA’s per-capita electricity consumption and remains
under half the world average as of 2023.
0
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6,000
8,000
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Per Capita Electricity Consum ption
USA
China
France
Germany
UK
India
Figure 1.3: Per Capita electricity consumption trend (in kWh per capita) (Ritchie et al, 2023)
(For China and India, electricity consumption is shown from 1980 onwards)
A fair comparison would be to examine the electricity consumption of developed nations when
their per capita GDP was equivalent to India’s current level (2,485 USD in 2023). For Germany,
France and the UK, their GDP per capita was in the range of 2,000-3,000 USD between 1965
and 1975 (World Bank). During these years, per capita electricity consumption reported in these
countries was in the range of 2,000-5,000 kWh, far exceeding India’s per capita electricity
consumption of 1,400 kWh in 2024 (Ritchie et al, 2023; CEA, 2025).
India’s lower electricity use, which halved from 6.5 kWh/USD in 1980 to 3.1 kWh/USD in 2022,
relative to comparable economies reflects falling energy intensity rather than lower levels of Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Power 5
Introduction
development (as seen in Figure 1.4). This means that the Indian economy required less energy
to produce a unit of GDP. Energy intensity, however, remains higher than that of developed
nations like the USA, indicating potential for improvement. India’s electricity intensity has
remained relatively stable over the last few years, indicating that the country is still in a phase
of industrial expansion.
0
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(kWh/USD)
Energy Intensity
India China US
0.00
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0.75
1.00
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1.75
(kWh/USD)
Electricity Intensity
India China US
Figure 1.4: Energy and electricity intensity to GDP: USA, China, and India
(GDP is taken as current value)
1.2 EVOLUTION OF THE INDIAN POWER SECTOR
The evolution of India’s power sector began with the establishment of vertically integrated State
Electricity Boards (SEBs) under the Electricity (Supply) Act, 1948. These SEBs were responsible
for the entire bundle of services covering generation, transmission, distribution, and retail supply,
to expand access to electricity across the country. The establishment of SEBs in the early 1950s
drove rapid expansion of the power sector to meet growing demand. This period also saw the
implementation of large-scale hydroelectric projects, as well as the construction of thermal and
nuclear power stations. The establishment of key organisations such as the National Thermal
Power Corporation (NTPC) and the National Hydroelectric Power Corporation (NHPC) in 1975,
along with the Nuclear Power Corporation of India (NPCIL) in 1987, further strengthened India’s
generation capacity.
By the 1990s, the performance of SEBs, especially on the distribution front, started to decline
due to multiple reasons. This included high Aggregate Technical & Commercial Losses (AT&C)
losses; tariffs that did not adequately reflect the cost of supply; free or underpriced power,
limited metering coverage; and low revenue recovery rates. It became evident that the sector
needed a complete overhaul. The introduction of the Electricity Regulatory Commissions Act in
1998 was a first step, leading to the creation of independent regulators: the Central Electricity
Regulatory Commission (CERC) and State Electricity Regulatory Commissions (SERCs) - to
bring transparency in tariff setting and promote consumer interests. This was followed by
the landmark Electricity Act of 2003, which mandated the unbundling of SEBs into separate
Generation Companies (GENCOs), Transmission Companies (TRANSCOs) and Distribution
Companies (DISCOMs), and encouraged competition, open access, and private participation
in distribution. Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Power 6
Introduction
Odisha and Delhi undertook early reforms to address severe financial and operational
inefficiencies, with Odisha becoming the first state to unbundle its electricity sector in the mid-
1990s and Delhi successfully transitioning to private distribution under a regulated framework
in 2002.
To improve service delivery and attract investment in the struggling distribution sector, the
government began experimenting with Public-Private Partnership (PPP) models, particularly in
urban areas. Odisha and Delhi undertook early reforms to address severe financial and operational
inefficiencies, with Odisha becoming the first state to unbundle its electricity sector in the mid-
1990s and Delhi successfully transitioning to private distribution under a regulated framework in
2022. Following this, states like Maharashtra, Madhya Pradesh, and Uttar Pradesh implemented
Input-Based Distribution Franchisee (IBDF) models, where private players managed day-to-day
operations, loss reduction, and customer service, while ownership remained with the government.
In recent years, the privatisation of DISCOMs in Union Territories (such as Chandigarh and Dadra
& Nagar Haveli) reflects a policy push toward more structured PPP.
Today, while challenges like cross-subsidies, regulatory delays, and DISCOM financial health
persist, India’s distribution sector is gradually evolving into a more decentralised, technology-
driven, and service-focused segment. The growing role of PPP models and regulatory reforms is
paving the way for greater consumer empowerment, efficiency, and reliability in power delivery.
The total installed capacity (utility and non-utility) has increased exponentially from 1,362 MW in
1947 to an impressive 523 GW in 2023-24 (CEA, 2025). Similarly, electricity generation in India
has grown remarkably over the decades from a modest 4 TWh in the year 1947, to around 1,958
TWh (including 224 TWh generation from captive plants) in 2023-24 (CEA, 2025).
Over the past decade, India’s electricity sector has undergone a profound transformation,
anchored in its ambition to ensure universal access, energy security, and a low-carbon transition.
First, the country added nearly 193 GW of installed power capacity, with cumulative capacity
increasing from 249 GW by March 2014 to 442 GW (utilities only) by March 2024 (CEA, 2025).
When including captive power plants, the total installed capacity reaches 523 GW by March
2024, placing India among the top power systems globally.
Second, India made significant strides in electrification, transitioning from limited rural access
to near-universal coverage through the effective roll-out of Deen Dayal Upadhyaya Gram Jyoti
Yojana (DDUGJY) and Pradhan Mantri Sahaj Bijli Har Ghar Yojana (SAUBHAGYA schemes).
Electrification increased from a meagre 3,061 villages in 1947 to over 597,000 villages, including
remote and border regions, by 2018 (CEA, 2025).
Third, beyond generation, India’s transmission and distribution infrastructure scaled impressively.
The length of Transmission and Distribution (T&D) lines has increased from approximately 11.2
million circuit kilometres (ckms) in 2014 to nearly 14.9 million ckms by 2024, ensuring reliable
evacuation of growing RE and regional interconnections (CEA, 2025). This included significant
capacity additions in 765 kV high-voltage corridors and the development of Green Energy
Corridors (GECs). Crucially, transmission system availability was maintained at >99%, while inter-
regional transmission capacity increased to almost 119 GW (Ministry of Power, 2024), enabling
real-time balancing and “one-grid-one-nation-one-frequency” operations. Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Power 7
Introduction
“In 2013, India achieved “One Nation, One Grid, One Frequency,” showing the country’s
strong commitment to providing reliable and efficient electricity to every part of the nation.”
1.3 ELECTRICITY SUPPLY-DEMAND POSITION IN INDIA
Over the last few decades, India transitioned from a power-deficient to a power-surplus nation.
This transition is underscored by steady improvements in supply capacity and grid integration.
From supply deficits of 11.1% in energy and 11.9% in peak seen in 2008-09, it declined to 0.1%
in energy and 0% in peak by 2024-25 (see Figure 1.5), indicating improvements in energy
generation, supported by growth in T&D infrastructure, bringing energy availability closer to
meeting the growing demand.
7.1%
11.1%
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Electric ity Supply-Demand Position
Energy Requirement Energy Availability
Energy Deﬁcit (%)
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Peak Deﬁcit
Peak Demand/ Availa bility (GW)
Peak Supply-Demand Position
Peak DemandPeak Availability
Peak Deﬁcit (%)
Figure 1.5: Peak and energy requirement, availability, and deficit
This reliable supply position reflects a stronger base-load fleet, adequate reserve margins, and
significantly expanded inter-regional and intra-regional transfer capacity. It also underpins India’s
readiness to meet growing future demand while maintaining high levels of supply reliability.
“In urban areas, the average daily electricity supply has gone up from 22.1 hours in FY14 to
23.4 hours in FY24. Rural areas have seen an even more remarkable progress from 12.5 hours
a day to 21.9 hours (PIB, 2025).”
1.4 ELECTRICITY CAPACITY, GENERATION, TRANSMISSION, AND
CONSUMPTION IN INDIA
As of December 2025, India’s total utility-scale installed capacity stands at 514 GW (CEA 2026),
with fossil-based capacity accounting for 48%, RES
1
accounting for 50%, and balance 2% from
nuclear (see Figure 1.6). Renewables have registered spectacular growth with overall share
increasing from 29% in 2014-15 to 50% by Dec. 2025 (see Figure 1.7), and solar power capacity
alone has grown by over 36 times (see Figure 1.8) during this period, positioning the country
as the third largest globally in solar capacity (IRENA, 2025).
1 RES - Comprising of solar, wind, small hydro, large hydro, and bio-power Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Power 8
Introduction
Coal,
226GW, 44%
Gas & Oil,
20.7GW, 4%
Nuclear,
8.8GW, 2%
Hydro,
51GW, 10%
Solar,
135.8GW, 26%
Wind,
55GW, 11%
Bio Power,
12GW, 2%
Small Hydro,
5GW, 1%
Other,
258 GW, 50%
Figure 1.6: India’s installed capacity (utility) of electricity generation as of December 2025
Source: CEA
32%
52%
68%
48%
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60%
70%
80%
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% Shar e
Capacity (GW)
Coal/Lignite Gas Nuclear RES Non-fossil Share Fossil Share
Figure 1.7: Installed capacity/ share of different resource category (utility) shows
that Renewable Energy Share (RES) has increased in both absolute numbers and share of capacity
Source: CEA
“In 2024–25, 87% of India’s new capacity additions came from renewable sources, reflecting
a strong shift towards clean energy.”
“By July 2025, India had already achieved 50% non-fossil fuel–based installed power capacity,
fulfilling one of its key Nationally Determined Contribution (NDC) commitments well ahead
of schedule.” Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Power 9
Introduction
0
50
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Installed Capacity (GW)
Large Hydr o Solar Wind Small Hydro Bio-Pow er
Figure 1.8: Installed capacity of different Renewable Energy resources (utility)
Source: CEA
However, despite this impressive growth on the capacity side, the contribution of RE to actual
electricity generation has remained modest, with the share increasing from 19.6% in 2013-14
to 22% in 2024-25, as shown in Figure 1.9 (CEA, 2025). Solar and wind have a lower Capacity
Utilisation Factor (CUF) than coal, face intermittency and variability related curtailments, and
are constrained by grid, flexibility and dispatch limitations. Therefore, rapid expansion of RE
capacity has not yet translated into a commensurate rise in its share of generation. Bridging this
capacity-generation gap will require investments in storage, flexible resources and transmission,
alongside reforms to dispatch and contracting frameworks.
As for India’s electricity generation (utilities), it grew from 1,027 BU in 2013-14 to an estimated
1,824 BU in 2024-25 (see Figure 1.9), representing a compounded annual growth rate (CAGR)
of 5.36%. The share of captive generation accounted for nearly 11% of the total electricity
generation (utility + non-utility) in 2024 (CEA, 2025).
17.3%
22.1%
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74.8%
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2014-15 2016-17 2018-19 2020-21 2022-23 2024-25
Electricity Generation (TWh)
Thermal RES Nuclear RE Share Fossil Share
% Share
Figure 1.9: Electricity generation by different sources
LHS: Electricity generation from different sources; RHS: % Share of RE and fossil-fuel in total generation
Source: CEA Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Power 10
Introduction
India’s nuclear power sector has grown steadily over the past few decades, playing an important
role in the country’s push for clean and reliable energy. Starting with just one reactor in the
1960s, India now operates 25 nuclear reactors with a total capacity of around 8.78 GW by
December 2025. In 2024–25, nuclear power plants generated 56,681 million units (MU) of
electricity, achieving an impressive average capacity factor of 87% (NPCIL), which reflects high
operational efficiency. An additional 13.6 GW of nuclear capacity is under implementation (PIB,
2025) at various stages, signalling the government’s strong commitment to expanding this
sector. While nuclear power currently makes up a small portion of India’s overall energy mix,
it offers a dependable complement to Variable Renewable Energy Sources (VRES) like solar
and wind.
“India aims to achieve 100 GW of nuclear power capacity by 2047.”
Alongside the expansion of generation capacity, India’s power transmission network has
significantly evolved to accommodate rising electricity demand (see Figure 1.10). The development
of high-capacity infrastructure, including Ultra High Voltage (UHV) lines and Green Energy
Corridors (GECs), has enabled efficient inter-regional power transfer. On the distribution front,
modernisation efforts have gained momentum, with over 4.95 crore smart meters deployed by
December 2025 to improve monitoring and billing efficiency (National Smart Grid Mission). There
has been a marked reduction in Transmission and Distribution (T&D) losses, which declined from
23% in 2012-13 to 17.63% in 2023–24 (CEA, 2025), reflecting stronger operational performance
and reduced leakages in the system.
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12000
14000
2002 2007 2012 2017 2024
(000') ckms
Length of Transmission &
Distribution Lines (Below 66 kV)
0
100
200
300
400
500
600
700
800
900
2002 2007 2012 2017 2024
(000') ckms
Length of Transmission Lines
(66 kV and Abov e)
Figure 1.10: Growth of transmission lines in India
2
With improved efficiency and access, electricity consumption rose from 874 TWh in 2013-
14 to 1,540 TWh in 2023-24 at a CAGR of 5.8% (CEA, 2020) (see Figure 1.11). The industrial
sector remains the largest consumer, accounting for nearly 42% of total electricity use, and the
household (domestic) sector has become the second largest consumer with a share of 24% of
total consumption in 2023-24. A significant portion of industrial consumption, around 30%, is
met through captive generation rather than supply from DISCOMs.
2 ckms - Circuit Kilometres Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Power 11
Introduction
0
200
400
600
800
1000
1200
1400
1600
Electricity Consumption (TWh)
Others
Agriculture
Traction
Industrial
Commercial
Domestic
Figure 1.11: Growth of electricity consumption
1.5 ELECTRICITY MARKET: FROM BILATERAL DOMINANCE TO
EXCHANGE-LED COMPETITION
The introduction of non-discriminatory Open Access under Section 42(2) of the Electricity
Act and the enactment of Power Market Regulations 2010 led to the establishment of Power
Exchanges in India.
9%
13%
3%
7%
0%
2%
4%
6%
8%
10%
12%
14%
0
25
50
75
100
125
150
175
200
225
250
Share of ST Market/Exchange
Power Traded on ST & DSM (TWh)
Traders Direct bilateral Exchanges DSM
Share of ST&D SM Share of exchange
Figure 1.12: Overview of India’s short-term power market
3
3 BU - Billion Units; DSM - Deviation Settlement Mechanism; ST – Short Term Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Power 12
Introduction
India’s Power Market is dominated by long-term PPAs, which constitute around 87.5% of the
power generation in FY 2023-24. The short-term market, which constitutes delivery up to
one year, met 12.5% of the country’s generation in FY 2023-24, as shown in Figure 1.12. Over
the last decade, the share of short-term market has remained between 10% to 13% of India’s
power generation. However, within the short-term market, the share of power exchanges in
the overall short-term market has grown from 16% in FY 2011-12 to 56% in FY 2023-24, led by
several product innovations discussed subsequently (CERC, 2024). Consequently, the share of
exchange-traded electricity in India’s total power generation has increased from 2% in FY12 to
7% in FY 2023-24.
To serve the evolving market needs and increase the liquidity in the Spot market, Power
exchanges have introduced various products over last 15 years: Term Ahead Market (TAM), Day
Ahead Market (DAM), Green Term Ahead Market (G-TAM), Green Day Ahead Market (G-DAM),
Real Time Market (RTM) and the Ancillary Services Market (see Figure 1.13). The dedicated
green market has incentivised RE-rich states to develop RE capacity beyond their Renewable
Purchase Obligations (RPOs), and the same was purchased by RE deficit states and open access
consumers to buy green power at competitive prices. Further, recognising the growing share
of VRE generation and increased weather-related events impacting the accuracy of demand
forecasts, Real Time Market was introduced from 1st June 2020. Through Real Time Market,
any variability triggered by RE generation or demand variation can be corrected as close as an
hour ahead of actual delivery of power.
Electricity Act (2003)
led to unbundling of
the sector and
promoted competition
National
Electricity Policy
was formulated
to provide
overall guidance
on sector
development
Day ahead
market was
launched by
Power
exchanges
Trading in REC
commenced
Ancillary
services (RRAS)
Regulations to
procure slow
tertiary services
RTM launched
for trading
electricity
closer to real
time
Ancillary services Regulation
formulated for market-based
procurement of secondary and
tertiary regulation
Guidelines on
Over-the-counter
platforms formulated
HP-DAM introduced
Green DAM
introduced
2003
2005
2007
2009
2011
2013
2015
2017
2019
2021
2022
2023
Term ahead market
was launched to allow
trading till 11 days prior
to physical delivery
Tertiary reserves ancillary
services introduced in
Power exchanges
Green TAM
introduced
Longer duration Term Ahead
Contracts and Green Term
Ahead Contracts for trading till
90 days ahead launched
Figure 1.13: Journey of the Indian power market
4
4 Day Ahead Market; TAM – Term Ahead Market; RTM – Real Time Market; GTAM- Green Term Ahead Market; GDAM
– Green Day Ahead Market; RRAS - Reserves Regulation Ancillary Services;
HP-DAM - High Price Day Ahead Market Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Power 13
Introduction
The Day-Ahead Market (DAM) dominated exchange-based electricity trading in India from its
inception until FY19, accounting for over 90% of total exchange volumes, largely due to superior
price discovery and liquidity. During this period, the share of power exchanges in the short-term
electricity market rose significantly, increasing from about 17% in FY12 to around 56% in FY24
(CERC, 2024).
Following the introduction of the Real-Time Market (RTM), market participation diversified
rapidly. Within three to four years of its launch, RTM gained substantial traction, leading to a
gradual decline in the share of Day Ahead Market (DAM). By FY 2023–24, DAM’s contribution
had reduced to about 44% of total exchange-traded electricity, while the shares of RTM and the
Term-Ahead Market (TAM) increased to approximately 25% and 28%, respectively. This evolution
reflects a maturing market structure in India, broadly aligned with global power market trends,
where multiple trading segments coexist to meet varied scheduling and balancing needs.
Further, Green Day Ahead Market (G-DAM), a unique market segment first of its kind in the
global power market, was launched in FY22, and this segment is dedicated to the trade of only
green power. The G-DAM received a good response; however, with the limited market-based RE
capacities in India, the share of G-DAM is just 2% of the total electricity traded by all Exchanges
in FY24. Thus, the rising share of new products indicates a healthy trend of product innovation,
which has helped to meet the evolving needs of the market participants. Figure 1.15 below
shows the trends of Indian Energy Exchange - Day Ahead Market (IEX DAM) prices vis-à-vis
the weighted average price in bilateral market. This demonstrates that power exchanges have
played a significant role in promoting competition and transparency in power procurement.
30
54
1
34
30
0
20
40
60
80
100
120
140
2013-142014-152015-162016-172017-182018-192019-202020-212021-222022-232023-24
TWh
DAM TAM RTM GTAM GDAM DAM Avg Price
Figure 1.14: Overview of power traded on exchanges
5
5 Day Ahead Market; TAM – Term Ahead Market; RTM – Real Time Market; GTAM- Green Term Ahead Market; GDAM
– Green Day Ahead Market; RRAS - Reserves Regulation Ancillary Services;
HP-DAM - High Price Day Ahead Market Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Power 14
Introduction
5.17
7.33
0
1
2
3
4
5
6
7
8
2013-142014-152015-162016-172017-182018-192019-202020-212021-222022-232023-24
INR/kWh
Weighted Avg DAM Price Weighted Avg Price of Traders
Figure 1.15: Average price of electricity (exchange vs bilateral trading)
This detailed review of India’s power sector expansion shows how developments in generation,
transmission and market design have created the physical backbone for a more reliable and
diversified system. The next chapter turns to the evolving policy and regulatory architecture and
examines how successive policies, regulations and programmes have shaped and will continue
to shape the way this infrastructure is planned, operated and supports the transition to a low-
carbon power system. 2
CURRENT POLICY
LANDSCAPE Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Power 16
Current Policy Landscape
2
Current Policy
Landscape
Within this evolving framework (discussed in the previous chapter), the Indian power sector is
transforming to meet the twin objectives of meeting growing electricity demand reliably and
progressively shifting the generation mix towards cleaner sources. India is working towards reducing
carbon emissions from the power sector as part of its broader development strategy, recognising
that electricity is both a major source of GHG emissions and a key lever for economy-wide mitigation.
In pursuit of these objectives, the government has introduced several policies and programmes
to scale RE, reduce dependence on coal and promote energy efficiency. These efforts include
modernising the grid and power markets, developing energy storage solutions and encouraging the
use of green hydrogen. At the same time, policies are being designed to ensure that this transition
is fair, affordable, and benefits all sections of society. This chapter discusses the major policies and
initiatives India has adopted to move towards a cleaner power sector.
Figure 2.1 presents a year-wise overview of key policies shaping India’s power sector since 2003,
highlighting the evolution from access and distribution reforms to large-scale renewable energy
deployment, grid modernisation, market reforms, energy storage, and emerging technologies such as
green hydrogen. Building on this evolution, the following sections discuss key policies and initiatives
in detail, grouped by their focus areas, and examine their role in facilitating India’s transition towards
a cleaner, more reliable, and resilient power sector.
2.1 POLICY INITIATIVES FOR LOW-CARBON TRANSITION OF POWER
SECTOR
India has implemented significant initiatives to boost electricity generation and ensure clean
and reliable power. The Electricity Act of 2003 paved the way for private participation
and encouraged competition in the power sector, from generation to distribution. This was
complemented by the National Electricity Policy (NEP), providing a roadmap for affordable
electricity access and sustainable development. The National Electricity Tariff Policy (2006,
amended in 2016) further promoted renewable energy integration by requiring distribution
utilities to source a portion of their power from renewable sources.
One of the most significant outcomes of India's renewable energy policies has been the drastic
reduction in solar tariff, making clean energy economically competitive with conventional
sources. Solar tariff in India has fallen from about INR 12.16/kWh in the early 2010s to around
INR 2-3/kWh following policies such as the National Solar Mission (NSM) and competitive
reverse auction (Economic Times, 2020), representing a decline of 70-80%. In case of wind,
reverse auctions commenced in 2017, and since then, the tariffs have seen a consistent trend
revolving around INR 3-4/kWh. Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Power 17
Current Policy Landscape
2003
2005
2006
2008
2010
2014
2015
2017
2018
2019
2020
2021
2022
2023
2024
2025
National Tarif Policy
2006 (Amended in 2016)
• Power procurement
through tariff-based
bids
• Ensure electricity
availability to
consumers at
competitive rates
Electricity Act 2003
• Unbundled SEBs
• Introduced power
trading & Open Access
• Introduction of
multi-year tariff
NEP 2005
• Electricity access
to all with reliable,
affordable, and
quality power
RGGVY 2005
• Free electricity to
rural and poor
households
• Capital subsidy for
rural distribution
backbone
RDSS 2021
• Reduce AT&C losses to
12 -15% by 2024-25
• Reduce ACS -ARR gap
to zero by 2024 -25
• Push for smart
metering
National Green
Hydrogen Mission
2023
• Target of 5 million
metric tonnes of
green hydrogen
production by
2030
Nuclear Energy
Mission
• 100 GW of nuclear
power by 2047
• 5 indigenously
developed SMRs to
be operationalized
by 2033.
Guidelines for Resource
Adequacy Planning
Framework for India
2023
• Ensure Long-Term
Power Supply Security
• Optimize Resource
Planning
• PM Surya Ghar Muft
Bijli Yojana 2024
• 1 crore households to
install rooftop solar
systems
IPDS 2014
• Metering at
multiple levels
• Strengthen sub -
• transmission
networks
DDUGJY 2014
• Improving rural
electricity access
• Feeder
separation
• Metering in rural
areas
Scheme for Viability
Gap Funding (VGF)
for development of
BESS 2023
• Development of
4,000 MWh of BESS
projects by 2030-31
Saubhagya 2017
• Universal
electricity access
• 24x7 power to
rural and urban
households
PM -KUSUM 2019
• Target- 10 GW of
distributed grid
connected solar
• Installation of 17.5L
solar pumps
• Solarization of grid
connected pumps
Hydro Policy Notiﬁcation 2019
• Large hydropower projects
declared as RE source
• Hydro purchase obligation
(HPO) as a separate entity
within non-solar renewable
purchase
Guidelines for Procurement and
Utilization of Battery Energy Storage
Systems as part of Generation,
Transmission and Distribution assets,
along with Ancillary Services 2022
• Enable deployment of BESS as part
of generation, transmission, and
distribution infrastructure.
NSM 2010
• Promotion of large
grid connected
wind-solar PV
hybrid system
• Reducing the
variability in
renewable power
generation
R-APDRP 2008
• Aimed at reducing
AT&C losses
• Enabling accurate
baseline data
• IT enabled energy
accounting
Ofshore Wind Energy
Policy 2015
• Promote offshore wind
farms in India’s Exclusive
Economic Zone (EEZ),
including those under
Public-Private Partnerships
National Policy on Biofuels 2018
(Amended in 2022)
• Promote biofuels to reduce
dependency on fossil fuel imports
and enhance energy security.
• Boost rural economy by using
agricultural waste and non-food
feedstocks for biofuel production.
Guidelines for Tarif Based Competitive
Bidding Process for Procurement of
Round-The Clock Power from Grid
Connected Renewable Energy Power
Projects, complemented with Power
from any other source or storage 2020
• Promoting RE power and to provide
Round The-Clock (RTC) power
UDAY 2015
• States to take over
75% DISCOM debt
• States push
DISCOMs towards
efﬁciency
improvements
National Wind-Solar
Hybrid Policy 2018
• Promotion of large
grid connected
wind-solar PV hybrid
system
• Reducing the
variability in
renewable power
generation
Guidelines for Tarif Based Competitive
Bidding Process for Procurement of
Power from Grid Connected RE Power
Projects for utilisation under scheme for
ﬂexibility in Generation and Scheduling
of Thermal/ Hydro Power Stations
through bundling with Renewable
Energy and Storage power 2020
• Promote competitive procurement of
electricity from RE power plants
Draft Electricity
(Amendment) Bill
2020
• DBT of consumer
subsidy
• Encourages
reduction of
cross subsidies
• National
Renewable Policy
and stricter RPOs
• Electricity
Contract
Enforcement
Authority (ECEA)
NSGM 2015
• Accelerate
smart grid
development
Figure 2.1: Key policies and schemes in India’s power sector
NEP: National Electricity Policy; IPDS: Integrated Power Development Scheme; RGGVY: Rajiv Gandhi Grameen Vidyutikaran Yojana; DDUGJY: Deen Dayal Upadhyaya Gram Jyoti Yojana; Saubhagya: Sahaj Bijli Har Ghar
Yojana; PM-KUSUM: Pradhan Mantri Kisan Urja Suraksha evam Utthaan Mahabhiyan; RDSS: Revamped Distribution Sector Scheme; NSM: National Solar Mission; UDAY: Ujwal DISCOM Assurance Yojana; NSGM: National
Smart Grid Mission; R-APDRP: Restructured-Accelerated Power Development and Reforms Programme Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Power 18
Current Policy Landscape
The transition from Feed-in Tariffs (FiTs) to standard guidelines for tariff-based competitive
bidding played a crucial role in this cost reduction, along with declining equipment prices
and lower financing costs. A major step towards clean energy adoption in the agriculture
sector was the launch of Pradhan Mantri Kisan Urja Suraksha Evam Utthaan Mahabhiyan (PM-
KUSUM) Scheme in 2019. The scheme aims to de-dieselise the farming operations, expand RE
deployment, and enhance farmers’ incomes. This scheme targets the addition of 34,800 MW of
solar capacity by 2026 and with financial support of INR 34,422 crore. As of December 2025,
the scheme has recorded progress as summarised in Table 2.1 (MNRE).
Table 2.1: PM-KUSUM achievements as on 30.12.2025
Component A Component BComponent C
Solar capacity
(MW)
Standalone Pumps
(Nos.)
Individual Pump Solar-
IPS (Nos)
Feeder Level Solar -
FLS (Nos.)
SanctionedInstalledSanctionedInstalledSanctioned SolarisedSanctioned Solarised
10,000 720.91 13,15,1909,75,277 55,392 11,781 35,27,492 11,89,787
Complementing these supply and agriculture-focused interventions, the PM Surya Ghar: Muft
Bijli Yojana (2024) was launched to accelerate residential rooftop solar adoption (MNRE). The
scheme aims to provide subsidy support to empower one crore households by March 2027. It
seeks to make RE more affordable and accessible through the addition of 30 GW of rooftop
solar capacity in the residential sector. It is estimated that the scheme will reduce approximately
720 million tonnes of carbon emissions over the 25-year lifetime of these rooftop systems (PIB,
2024). As of December 3, 2024, the programme has seen significant participation, with 1.45
crore registrations and 26.38 lakh applications recorded on the National Portal.
Further, the Model Solar Village component under this scheme focuses on establishing one
Model Solar Village per district throughout India, supporting rural energy self-reliance and
setting India on a path toward a greener and more sustainable future.
Reinforcing the deployment-focused Renewable Purchase Obligation (RPO) scheme, Renewable
Consumption Obligation (RCO) has also been notified, placing onus on major consumers rather
than just distribution utilities. RCO mandates DISCOMs, open access consumers, and captive
generators to obtain a defined share of their electricity from renewable sources. RCO also
includes a specified quantum of consumption from Decentralised Renewable Energy Sources.
Under these, targets are specified for each year, with values increasing incrementally through
2030. Supporting these mandates, Renewable Energy Certificates (RECs) are issued to verify
and trade RE generation, allowing obligated entities to meet their targets or to reduce carbon
footprints voluntarily. Together, these frameworks provide market-based instruments to
complement PM-KUSUM and PM Surya Ghar schemes and advance India’s climate objectives
.
In addition to the above, several other national-level policies and initiatives have been introduced
by the Government of India to promote and accelerate RE capacity addition in the country and
support the low-carbon transition across different segments:
The National Offshore Wind Energy Policy (2016) focuses on exploring and
developing offshore wind energy potential within India’s Exclusive Economic Zone.
It lays down a framework for resource assessment, leasing of offshore areas, and Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Power 19
Current Policy Landscape
project development, contributing to India’s target of expanding its non-fossil fuel
capacity (MNRE, 2015).
The National Wind-Solar Hybrid Policy (2018) aims to promote large-scale hybrid
renewable energy projects by combining wind and solar technologies at a single site.
This helps in better utilisation of land and transmission infrastructure while ensuring a
more stable power supply (MNRE, 2018).
The National Policy on Biofuels (2018) promotes the use of biofuels like ethanol,
biodiesel, and advanced biofuels to reduce dependence on fossil fuels and cut
greenhouse gas emissions. It sets ambitious targets for blending ethanol with petrol and
encourages the production of biofuels from various feedstocks, including agricultural
waste and used cooking oil (MoPNG, 2018).
National Programme on Advanced Chemistry Cell (ACC) Battery Storage (2021) was
launched to support domestic manufacturing and reduce reliance on imports. With
a Production Linked Incentive (PLI) outlay of INR 18,100 crore, the scheme aims to
establish a manufacturing capacity of 50 GWh of ACCs and an additional 5 GWh for
niche ACC technologies. The objective is to encourage private sector investment in
large-scale battery manufacturing for electric vehicles, grid storage, and consumer
electronics. The scheme mandates a minimum 60% domestic value addition within five
years and requires firms to set up an integrated facility, from cell to pack (Ministry of
Heavy Industries).
National programme on High Efficiency Solar PV Modules (2022) aims to build
an ecosystem for manufacturing of high-efficiency solar PV modules in India, and
thus reduce import dependence on imported solar equipment. Under Tranche-
II of the scheme, with an outlay of INR 19,500 crore, the programme targets the
establishment of around 65 GW per annum of fully and partially integrated solar PV
module manufacturing capacity. By offering performance-based incentives over five
years, the PLI scheme is expected to encourage vertically integrated, gigawatt-scale
manufacturing, boost domestic production, strengthen energy security, and support
India’s target of 500 GW of non-fossil fuel capacity by 2030 (MNRE).
Scheme for setting up Solar Parks and Ultra Mega Solar Power Projects (2023) is
being implemented to provide land and transmission infrastructure to RE developers
for the installation of RE projects at a large scale. Under this scheme, the GoI has
sanctioned 55 Solar Parks with an aggregate capacity of over 39 GW across 13 States
with implementation timelines extending until 31 March 2029.
National Repowering and Life Extension Policy for Wind Power Projects (2023) aims
to boost RE by replacing old, inefficient wind turbines with modern, higher-capacity
machines or by refurbishing existing turbines to extend their operating life. This will
maximise energy generation per unit of land area, with a repowering potential of
25,406 MW identified for turbines below 2 MW (MNRE).
The National Green Hydrogen Mission (2023) is a recent and strategic initiative to
promote the production and use of green hydrogen as a clean fuel alternative, especially
in sectors like refinery, fertilisers, steel, and heavy-duty transport. The mission targets
the development of 5 Mt (million tonnes) of green hydrogen production capacity
annually by 2030, supported by policy incentives, R&D, and international cooperation
(MNRE). Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Power 20
Current Policy Landscape
National Framework for promoting & developing Energy Storage Systems (ESS)
(2023) will encourage and create an ecosystem for development of Energy Storage
based on requirements and financial feasibility. ESS facilitates transition from fossil fuel
to RE by making RE dispatchable and available round the clock (MoP, 2023).
Viability Gap Funding for development of Battery Energy Storage Systems (2023):
With an initial outlay of INR 9,400 crore, including a budgetary support of INR 3,760
crore, the scheme envisages the development of 4,000 MWh of Battery Energy Storage
System (BESS) projects by 2030-31, with financial support of up to 40% of the capital
cost provided as budgetary assistance in the form of VGF.
New Solar Power Scheme (for Tribal and PVTG Habitations/Villages) under PM
JANMAN and PM JUGA (2024) aims to provide reliable and clean electricity access
to tribal and Particularly Vulnerable Tribal Group (PVTG) habitations and villages.
It focuses on deploying decentralised solar solutions, including off-grid and mini-
grid systems, to address last-mile energy access challenges. This initiative seeks to
reduce dependence on diesel, support local livelihoods, and enable socio-economic
development in remote and underserved areas, aligning with India’s clean energy and
inclusive growth objectives (MNRE, 2024).
Viability Gap Funding (VGF) Scheme for Offshore Wind Energy Projects (2024) is a
major step towards the implementation of the National Offshore Wind Energy Policy,
notified in 2015. With an outlay of INR 7,453 crore, the scheme supports 1 GW of
offshore wind projects off the coasts of Gujarat and Tamil Nadu and port upgrades to
reduce power costs and make such projects viable for DISCOM procurement (MNRE,
2024).
In addition to these initiatives, a Nuclear Energy Mission was announced in the Union Budget
2025-26, as part of India’s clean energy agenda and the vision of Viksit Bharat. The mission
sets an ambitious target of 100 GW nuclear power capacity by 2047, making it a key part of
India’s future energy mix. This will help reduce dependence on fossil fuels and ensure reliable,
low-carbon electricity. To facilitate this expansion, the Sustainable Harnessing and Advancement
of Nuclear Energy for Transforming India (SHANTI) Act, 2025, has been enacted. This Act allows
significant private participation in the nuclear sector under regulatory oversight. In addition
to this, Mission focuses on the research and development of Small Modular Reactors (SMRs)
with a financial outlay of INR 20,000 crore, targeting the operationalisation of at least five
indigenously designed and operational SMRs by 2033 (PIB, 2025). These smaller, advanced
reactors are safer, easier to build, and can be used in industries or remote areas.
2.2 POLICY INITIATIVES FOR INFRASTRUCTURE DEVELOPMENT AND
GRID MODERNISATION
Modernising the power sector’s infrastructure is critical to accommodate the growing share of RE
and ensure a reliable, efficient, and resilient electricity supply. India has launched several flagship
programmes to upgrade its transmission and distribution networks and make the grid smarter and
more responsive to evolving energy needs.
One of the key initiatives in this regard is the National Smart Grid Mission (NSGM), launched
in 2015. The mission focuses on planning and implementing smart grid projects in India to Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Power 21
Current Policy Landscape
modernise the electricity network. It promotes the use of advanced technologies such as smart
meters, automated demand response, and real-time grid monitoring systems to make the grid
more responsive, resilient, and consumer-friendly.
Under NSGM, pilot projects have been implemented across various states to demonstrate smart
metering, outage management, and integration of distributed energy resources. The mission
also supports capacity building, policy formulation, and collaboration between public utilities
and technology providers to foster innovation in grid management.
Complementing this, the Green Energy Corridor (GEC) project is a major initiative to strengthen
the transmission infrastructure required to evacuate power from RE-rich states to load centres
across the country.
Launched in two phases, the project covers both intra-state and inter-state
transmission systems (Ministry of Power, 2025). The GEC ensures grid stability by deploying
technologies like reactive power management and battery storage, paving the way for large-
scale RE integration.
In addition to these flagship programmes, several policy and planning measures have been
undertaken to further strengthen transmission infrastructure and facilitate renewable energy
integration. Inter-State Transmission System (ISTS) charges have been waived for the inter-state
sale of solar and wind power projects commissioned up to 30 June 2025, for green hydrogen
projects till December 2030, and for offshore wind projects till December 2032, helping in
improving the commercial viability of these projects. Further, a comprehensive transmission
expansion plan has been prepared up to 2030 to ensure the timely augmentation of network
capacity and grid reliability.
To address the challenges in the distribution segment, Revamped Distribution Sector Scheme
(RDSS) was launched in 2021 (Ministry of Power, 2024). The scheme focuses on improving
the operational efficiency and financial sustainability of DISCOMs through infrastructure
upgrades, feeder separation, smart metering, and reducing AT&C losses to 12-15%. As of March
17, 2025, projects worth over INR 2.78 lakh crore have been sanctioned for 32 States/UTs for
loss reduction and smart metering works, with early results showing improved reliability and
consumer satisfaction in several states (Ministry of Power).
Carbon Credit Trading Scheme (CCTS): CCTS is a market-based mechanism that places a price
on carbon to encourage a reduction in greenhouse gas (GHG) emissions. The scheme consists of
two main components: a compliance mechanism for the obligated entities to meet mandatory
emission targets, and an offset mechanism that allows voluntary participation by businesses
and institutions aiming to lower their carbon footprint. Initially, it started with nine energy-
intensive sectors, including steel, cement, aluminium, refining, fertilisers, and petrochemicals, by
assigning emission intensity targets, measured in CO₂ equivalent per unit of output. Companies
that emit less than their assigned target can earn Carbon Credit Certificates (CCCs), which can
be traded with those exceeding their limits, encouraging low-carbon production. The Bureau of
Energy Efficiency (BEE) is tasked with implementing this system under the amended Energy
Conservation Act, 2022.
Together, these infrastructure initiatives are transforming India’s power system into a future-
ready grid which will be capable of handling higher renewable penetration, reducing losses,
and delivering quality power to all
. Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Power 22
Current Policy Landscape
2.3 STATE-LEVEL POLICIES AND INITIATIVES
While national-level policies have played a foundational role in India’s renewable energy
transition, several states have taken proactive steps in formulating their own targeted policies
to accelerate clean energy deployment. These state-level policies are tailored to local resource
availability, investor needs, and socio-economic priorities, making them key enablers of India’s
clean energy journey.
Gujarat has emerged as a frontrunner in RE, with several forward-looking policies. The Gujarat
RE Policy (2023) aims to harness the state’s vast RE potential and includes provisions for solar
parks, distributed solar, offshore wind, wind-solar hybrid and repowering of old RE projects with
investments of around INR 5 lakh crore (Government of Gujarat, 2023). To address urban waste
challenges, the Gujarat Waste-to-Energy Policy (2022) promotes the generation of energy
from solid and liquid waste, offering financial incentives and support for project developers
(Government of Gujarat, 2023). Gujarat also implemented the Surya Gujarat Scheme, aimed at
promoting rooftop solar (RTS) in the residential sector with subsidies and simplified procedures.
Rajasthan, being rich in solar and wind resources, has announced ambitious targets under the
Rajasthan Integrated Clean Energy Policy (2024). The policy aims to develop 125 GW of RE
capacity by 2030, including 90 GW solar, 25 GW wind & hybrid, and 10 GW from hydro and
storage systems (Government of Rajasthan, 2024). It includes a holistic framework designed
to consolidate various clean energy segments, including solar, wind, biomass, waste-to-energy,
and green hydrogen under one comprehensive umbrella. The policy aims to maximise resource
utilisation, promote integrated project development, and encourage sectoral convergence
between energy generation, transmission, and storage.
Karnataka has consistently ranked among the top states for installed RE capacity. Its Renewable
Energy Policy (2022-2027) promotes a diverse energy mix including wind, solar, small hydro, and
biomass, to achieve an additional 10 GW of installed RE capacity with or without energy storage
systems in the State, including up to 1 GW of RTS PV projects. The policy also emphasises ease
of doing business, land availability, and grid connectivity (Government of Karnataka, 2022).
Andhra Pradesh has launched the Andhra Pradesh Integrated Clean Energy Policy (2024)
aimed at developing about 160 GW of renewable and pumped storage capacity, positioning
the state as a clean energy hub. The policy focuses on decarbonisation, decentralisation,
digitalisation, and democratisation of the power sector, promoting solar, wind, PSP, energy
storage, and green hydrogen. It also supports distributed generation through rooftop solar
and solar pumps, encourages RE exports, and enables EV charging infrastructure. Andhra
Pradesh aspires to become the storage capital and a leader in green hydrogen production,
while boosting investments, local manufacturing, and job creation. The policy also envisions
setting up a University for Green Energy & Circular Economy to drive research, skilling, and
entrepreneurship. Earlier initiatives like the Wind-Solar Hybrid Policy (2018), PSP Promotion
Policy (2022), and RE Export Policy (2020) continue to complement the state’s clean energy
growth (Andhra Pradesh Electricity Regulatory Commission, 2024).
Madhya Pradesh launched its Renewable Energy Policy (2022) with a focus on scaling up clean
energy deployment and manufacturing. The state targets an investment of INR 15,000 crore by
2024 and INR 50,000 crore by 2027 in the RE generation sector, along with an investment of
INR 4,000 crore by 2024 and INR 10,000 crore by 2027 in the RE equipment manufacturing Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Power 23
Current Policy Landscape
sector. The policy sets progressive targets to increase the share of renewables in the state’s
energy mix, aiming for 20% by FY 2024, 30% by FY 2027, and 50% by FY 2030. Madhya
Pradesh is already known for innovative projects like the Rewa Ultra Mega Solar Park, which
set benchmarks in cost-effective solar power and public-private partnerships (Government of
Madhya Pradesh, 2022).
Overall, these policies reflect India’s commitment to reducing its reliance on fossil fuels, fostering
renewable energy integration, and ensuring inclusive and reliable energy access. Additional
initiatives supporting the clean energy transition in the power sector, not explicitly discussed
here, are summarised in Annexure A. 3
METHODOLOGY
FOR POWER SECTOR
MODELLING 26Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Power
3
Methodology for
Power Sector Modelling
As the country advances towards becoming Viksit Bharat by 2047, the electricity system will play
a central role in driving economic growth, industrial competitiveness, improved living standards,
and the transition to a low-carbon economy. Rapid electrification across end-use sectors,
expanding renewable energy deployment, and the growing role of storage and flexibility solutions
are reshaping the power system. In this context, robust power sector modelling is essential
to assess future demand trajectories, capacity expansion pathways, emissions outcomes, and
implications for investment costs, land requirements, and water use under different scenarios.
This chapter presents the methodological framework and scenario analysis used to evaluate
India’s future electricity landscape, providing an integrated and consistent basis for assessing
pathways towards a secure, affordable, and sustainable power system.
3.1 METHODOLOGY DESCRIPTION
The analysis of the power sector in this study is based on a comprehensive, integrated modelling
framework that captures economy-wide demand dynamics and translates them into detailed
capacity and generation outcomes. This integrated framework employs soft-linking of three
modelling components: 1) demand assessment tools that project activity demand across different
energy end-use sectors; 2) an energy system model that estimates final energy consumption
for each end-use sector; and 3) detailed power sector models that translate electricity demand
into capacity expansion and generation outcomes.
Activity demand in physical units for each energy sector, such as Transport, Industry, Buildings
(Residential & Commercial), Cooking, and Agriculture, is first projected using a range of
approaches, including historical analysis, regression, elasticity analysis and per capita saturation
trends in major economies. Detailed demand projections can be found in the respective sectoral
reports.
These estimated demands serve as input to NITI Aayog’s in-house Energy Models (IESS
6
and
TIMES
7
). Based on assumptions regarding technology mix, specific energy consumption, efficiency,
appliance use, penetration of clean technologies/fuels, and relevant policy considerations, these
models estimate the final energy demand and fuel mix for each sector. The resulting fuel mix
is then used to derive sector-wise electricity consumption, capturing both industrial captive
generation and utility-supplied electricity requirements.
These sectoral consumptions are aggregated to obtain total electricity demand at the consumer
level. The resulting electricity demand is then provided as input to detailed Power Sector
6 IESS – India Energy Security Scenario
7 The Integrated MARKAL-EFOM System Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Power 27
Methodology for Power Sector Modelling
Models developed by NITI Aayog (TIMES Power Model) and the model being used by Central
Electricity Authority (ORDENA), see Figure 3.1. Detailed power sector modelling is carried out
on these platforms, considering the same electricity demand, and the results are aligned to
ensure consistency in both Capacity and Generation Mix.
Electricity
Consumption (TWh):
• Transport Sector
• Industry Sector
• Agriculture Sector
• Commercial Buildings
• Residential Buildings
• Cooking Sector
Generation Technologies
Penetration, PLF &
Auxiliary Consumption:
• Coal, Gas
• Nuclear
• Solar, Wind, Hydro
• Biomass, Waste to Energy
• Energy Storage Systems
Total
Electricity
Demand
Total
Electricity
Supplied
Efﬁciency
and Emission
Factors
T&D
Losses
Installed Capacity of
each Generation
Technologies
Fuel
Consumption
and Emissions
from Power
Sector
Figure 3.1: Methodology for power sector modelling
Since not all generated electricity reaches end users due to transmission and distribution (T&D)
losses, these losses are added to the total demand to determine the total electricity that must
be supplied by the power system.
The required electricity supply is then met through an optimisation framework that allocates
generation across available technologies subject to installed capacity and system constraints.
The model determines electricity generation from technologies such as coal, gas, nuclear, solar,
wind, hydro, and biomass by minimising total system cost, while accounting for technology-
specific costs, availability, plant load factors (capacity utilisation), auxiliary consumption, and
policy constraints. Once generation by each technology is determined, technology-specific
efficiency and emission factors are applied to estimate corresponding fuel consumption and
emissions. The final outputs of the model include the capacity mix, generation mix, total fuel
use and emissions from the power sector, which inform energy planning, policy analysis, and
climate impact assessments.
3.2 SCENARIO DESCRIPTION
For exploring India’s net-zero pathways, NITI Aayog has developed its own integrated energy
sector model that maps out future energy demand, fuel consumption, and emissions across
the entire energy economy. The model covers all energy-economy sectors such as Agriculture,
Buildings, Transport, Industry, and Power, to provide a holistic view of India’s energy transition.
Using this framework, two key scenarios have been developed: the Current Policy Scenario and
the Net Zero Scenario. These scenarios were developed through extensive consultations with
inter-ministerial working groups and sectoral experts. Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Power 28
Methodology for Power Sector Modelling
Current Policy Scenario (CPS): This scenario represents a level of effort that is
realistically achievable based on historical trends and recent progress. It assumes that
current policies (as of 2023) and past trends will continue, leading to a slow adoption
of low-carbon technologies in each sector.
Net Zero Scenario (NZS): This scenario reflects an ambitious pathway aligned with
India’s commitment to achieve net-zero GHG emissions by 2070. It incorporates
both existing and additional policy measures to accelerate technology deployment
and significant behavioural and structural shifts across sectors. Key strategies include
rapid electrification of end-use sectors, substantial gains in energy efficiency, adoption
of circular economy practices, and high penetration of renewable and clean energy
technologies.
The subsequent sections first present the detailed methodology for sectoral electricity
demand estimation adopted within the integrated energy sector model, followed by an
in-depth discussion of the capacity expansion planning methodology and underlying
assumptions that constitute the power sector modelling framework.
3.3 ELECTRICITY DEMAND PROJECTIONS: METHODOLOGY AND KEY
ASSUMPTIONS
There could be multiple approaches to estimating future electricity demand, with the two most
used being the top-down and bottom-up methodologies. A top-down approach projects future
electricity demand based on macroeconomic and system-level drivers, and then, if needed,
disaggregates into sectors, regions, or end uses. While the bottom-up approach is a method
where total electricity demand is built up from detailed end-use, sectoral, and technology-level
consumption, rather than starting from aggregate economic indicators.
The Electric Power Survey (EPS) conducted by the Central Electricity Authority (CEA) uses
the Partial End Use Method (PEUM), which is a bottom-up approach that combines time series
analysis and end-use methods to forecast electricity demand at the consumer category level.
This method works out demand projections by grouping end-users under various categories
of electricity consumers, such as Domestic, Commercial, Public Lighting, Public Water Works,
Irrigation, Industrial, Railway Traction, and Bulk (Non-Industrial HT) Supply. The time series
component derives growth indicators by giving higher weightage to recent trends. Apart from
general growth trends assessed from the past data, the likely impacts of various emerging
aspects and governmental initiatives/ policies such as Energy Efficiency Measures, penetration
of Electric Vehicles, Solar Roof-top, National Hydrogen Mission, PM-KUSUM Yojna, etc., have
also been factored in while assessing the electricity demand in future.
This study also adopts a bottom-up approach, building electricity demand projections from the
ground up by assessing the expected consumption within individual sectors, namely agriculture,
buildings (including cooking), transport and industry. A bottom-up, technology-rich, partial
equilibrium, optimisation tool is employed to develop an integrated energy sector model. In this
framework, the end-user demand for each sector is driven by the macroeconomic parameters:
GDP, urbanisation, and population. To meet the projected demand, the study determines an
optimal energy mix separately for each scenario based on different choices/assumptions such
as energy efficiency improvements, electrification trends, and emerging demand drivers such as Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Power 29
Methodology for Power Sector Modelling
electric vehicles, data centres, and green hydrogen production. Detailed information is available
in the sectoral reports. The total electricity demand is then derived by aggregating the electricity
consumption across all sectors.
3.3.1 Agriculture Sector
The agriculture sector, especially water pumping operations in FY 2024 accounted for nearly
18% of the total electricity consumption, with overall electricity demand in agriculture growing
at a compound annual growth rate (CAGR) of 5.24% between 2018-19 and 2023-24 (CEA,
2025). Several factors influence electricity use in agriculture, including groundwater depletion,
shifting crop patterns, pump set efficiency, and the growing penetration of electric vehicles in
tractor/ tiller sales. For a detailed analysis of the agricultural sector energy transition, Working
Group Report on Agriculture Sector, Vol. 6 can be referred to. However, the broad assumptions
that are driving the electricity demand growth are listed here (see Table 3.1):
Table 3.1: Assumptions for projecting electricity consumption in Agriculture SectorLeversCurrent Policy ScenarioNet Zero Scenario
Diesel pumps (Currently,
28%)
Phased out by 2040Phased out by 2035
Electric pump efficiency
(Currently 36%)
Improves to 40% by 2070 Improves to 50% by 2070
Share of electric (grid)
pumps (Currently, 70%)
60% by 207040% by 2070
Share of electric tractors
and tillers
50% (2050) and 85% (2070) 65% (2050) and 100% (2070)
3.3.2 Transport Sector
The transport sector is one of the key energy-consuming sectors in the country. It is responsible
for consuming the largest amount of petroleum products (petrol and diesel mainly). In 2020,
road transport contributed to 9.13% of India's total GHG emissions (MoEFCC, 2024). In FY 2023-
24, the transport sector accounted for 2.20% of India's total electricity demand (CEA, 2025),
mainly due to the load of railways and metros.
As seen in the recent trends in the transport sector globally, India’s market is also signalling the
beginning of a new era of mobility. The central and state governments have introduced various
policies and initiatives to accelerate the adoption of electric vehicles.
Transport sector demand is measured in billion passenger-kilometres (bpkms) for passenger
transport and billion tonne-kilometres (btkms) for freight transport. Passenger transport is
categorised into road, metro, rail, and air, while freight transport is divided into road, rail, air,
water, and pipeline modes. In the Net Zero Scenario, total transport demand in both passenger-
kilometres (btkms) and tonne-kilometres (btkms) is lower than in the Current Policy Scenario,
primarily due to the consideration of transit-oriented development planning, which reduces
overall travel demand. Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Power 30
Methodology for Power Sector Modelling
The electricity demand in the transport sector will be driven by changes in modal shift, share
of public/private transport modes within passenger road and electrification share in passenger
and freight segments. For a detailed analysis of the transport sector energy transition, Working
Group Report on Transport Sector, Vol. 3 can be referred to. However, the broad assumptions
that are driving the electricity demand growth in this sector are listed here (see Table 3.2):
Table 3.2: Assumptions for projecting electricity consumption in the Transport Sector
Levers2024 Current Policy Scenario Net Zero Scenario
2050 2070 2050 2070
Modal Share of Rail
Passenger17%19% 20% 22% 25%
Freight22%24% 25% 27% 30%
Modal Share of Metro
Metro1%2% 2% 2% 3%
EV Penetration in New Sales
2W6%100% 100% 100% 100%
3W57%90% 90% 100% 100%
4W-Car3%60% 80% 70% 85%
4W-Taxi60% 80% 95% 95%
Bus3.50%80% 80% 90% 90%
Vehicles payload
upto 3.5 tonnes
1%60% 80% 90% 95%
Vehicles payload
from 3.5-12
tonnes
- 15% 60% 50% 95%
Vehicles payload
above 12 tonnes
0.10%4% 50% 25% 80%
3.3.3 Building Sector
Energy demand in the building sector includes demand in Commercial Buildings, Residential
Buildings, and the Cooking Sector. In 2023-24, the residential sector accounted for nearly 23.96%
of the country’s electricity consumption, while the commercial sector contributed around 8.35%
(CEA, 2025). The cooking sector primarily relies on traditional biomass in rural areas, as well as
LPG and PNG in urban and semi-urban areas.
Between FY 2018-19 and FY 2023-24, electricity consumption in the residential and commercial
sectors grew at a compound annual growth rate (CAGR) of 5.1% and 5.5%, respectively
(CEA, 2025). This growth is primarily driven by rising population and rapid urbanisation. In
the Commercial Sector, the expansion of built floor space and the increasing share of air- Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Power 31
Methodology for Power Sector Modelling
conditioned buildings are the key drivers of rising electricity demand. In the residential sector,
increasing ownership and use of appliances such as air conditioners, refrigerators, and electric
water or space heaters, reflecting an improving standard of living, contributes to electricity
consumption. In the Cooking Sector, the gradual shift towards electric cooking is expected to
contribute to electricity consumption. For a detailed analysis of the building sector’s energy
transition, Working Group Report on Building Sector, Vol. 5 can be referred to. While energy
use in residential and commercial buildings is predominantly electric, the difference across
scenarios stems from changes in efficiency improvement considered and the penetration rate
of smart buildings. Table 3.3 summarises the key differences across sectors and two scenarios.
Table 3.3: Assumptions for projecting electricity consumption in the Building Sector
LeversCurrent Policy Scenario Net Zero Scenario
Penetration of smart buildings
in commercial (<1% current)
Improves to 35%Improves to 60%
Appliance efficiency standards
for Residential buildings
Average efficiency standards to
reach India’s best by 2050 and
global best by 2070
Average efficiency standards
to reach global best by 2050
Electrification share of cooking
(<1% current)
Improves to 30% by 2070 Improves to 60% by 2070
3.3.4 Industry Sector
The energy transition in the industrial sector will be driven by efficiency improvements,
demand electrification, adoption of cleaner technologies, increased use of clean fuels such
as green hydrogen and biofuels, and enhanced material circularity. In 2020, the industrial
sector accounted for 24.4% (excluding emissions from electricity use) of the country’s total
greenhouse gas (GHG) emissions (MoEFCC, 2024). Also, the sector accounted for 41.6% of total
electricity consumption in 2023-24 (CEA, 2025). Of this, about 70.26% was sourced from the
grid, while the remaining 29.74% came from captive power generation (CEA, 2025). Electricity
consumption in the industrial sector grew at a CAGR of 4.3% over the last five years (FY 2018–19
to FY 2023–24) (CEA, 2025). Since electricity is one of the most efficient forms of energy,
the industrial sector is likely to witness a continued increase in electricity consumption as it
transitions toward cleaner and more efficient energy systems. With improving grid reliability and
the Government of India’s increasing focus on decarbonising grid electricity, there is a strong
possibility of a shift from captive power to grid-based electricity.
For energy demand estimation, the industrial sector is classified into nine sub-sectors:
steel, cement, aluminium, fertilisers, textiles, paper & pulp, chlor-alkali, chemicals, and other
industries. This classification is based on segregating energy-intensive industries, designated
under the Perform, Achieve and Trade (PAT) scheme, while grouping all other industries
under the single category of "other industries." For a detailed analysis of the industry sector’s
energy transition, Working Group Report on Industry Sector, Vol. 4 can be referred to.
However, the key assumptions driving the electricity demand growth in this sector are
summarised in Table 3.4. Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Power 32
Methodology for Power Sector Modelling
Table 3.4: Assumptions for projecting electricity consumption in the Industry Sector
LeversCurrent Policy Scenario (2070) Net Zero Scenario (2070)
Industry Sector Electrification:
16%
29%55%
Share of Captive (in selected sectors)
Steel: 63%50%35%
Cement: 58%50%20%
Aluminium: 88%70%40%
Share of Scrap (in selected sectors)
Steel: 20%
Remains same at the current
level
Increases to 40%
Aluminium: 30%
Remains same at the current
level
Increases to 40%
With these assumptions, Industrial sector electrification is projected to reach about 29% under
the Current Policy Scenario and 55% under the Net Zero Scenario by 2070, compared to 16%
at present.
3.3.5 Electricity Required for Green Hydrogen
Hydrogen is emerging as a key pillar in India’s transition to a low-carbon economy. Recognised
for its versatility and clean-burning properties, hydrogen can play a crucial role in decarbonising
hard-to-abate sectors such as refining, fertilisers, steel, and heavy transport.
India is among the largest producers and consumers of grey hydrogen, primarily used in refineries,
fertiliser and ammonia production. However, under the National Green Hydrogen Mission (NGHM),
the focus is shifting toward green hydrogen, produced using renewable electricity, biomass and
water. Under this mission, the country aims to produce 5 million metric tonnes (MMT) of green
hydrogen annually by 2030. With this ambitious goal, India aims to position itself as a global
hub for green hydrogen production and exports. The detailed consumption trajectories of green
hydrogen in industrial and transport sectors can be found in their respective Working Group
Reports. A broad assumption for green hydrogen production growth is summarised below:
Current Policy Scenario: In this Scenario, the high cost of green hydrogen compared to grey
hydrogen makes achieving the 5 million tonnes production target by 2030 unlikely. Most of
the hydrogen produced during this period is expected to be exported, with limited domestic
adoption until production costs decline after 2035. By 2050, green hydrogen production is
projected to reach around 8.5 million tonnes, primarily serving refineries, fertiliser production,
steel manufacturing, and export markets. However, as costs continue to fall, production is
expected to increase significantly, reaching approximately 24 million tonnes annually by 2070.
Net Zero Scenario: In this scenario, India is closer to achieving its Green Hydrogen Mission
target of 5 million tonne per annum production capacity, although with a modest delay of 1-2
years. In this scenario, green hydrogen is assumed to be used across fertiliser, refinery, steel and
transport (buses, HCVs). Its role in producing green methanol and ammonia for the shipping Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Power 33
Methodology for Power Sector Modelling
sector is also explored. Under this scenario, India is assumed to capture around 5% of the IEA-
projected global low-emission hydrogen production of 520 million tonne per year by 2050 (IEA,
2021), implying domestic green hydrogen production of roughly 26 million tonnes by 2050,
rising to nearly 50 million tonnes by 2070.
3.3.6 Miscellaneous and Data Centres
The miscellaneous category includes electricity consumption for public lighting, public water
works and sewage pumping, and other miscellaneous uses. It accounted for 6.03% of India's
total electricity consumption in 2023-24. Within this category, the share of electricity use is
approximately 10% for public lighting, 34.7% for public water works & sewage pumping, and
55.3% for other miscellaneous uses (CEA, 2025).
As India continues to urbanise and expand its infrastructure, electricity demand from these
sectors is expected to increase significantly.
Further, in the case of data centres, the estimated power load in 2024 was around 1.4 GW
(Statista, 2024). Data centres form the backbone of the digital economy, supporting a wide
range of services including cloud computing, social media, e-commerce, AI, and government
platforms. With the rapid digitalisation of the country, driven by initiatives such as Digital India,
and the growth of 5G and AI applications, the demand for high-performance, always-on data
infrastructure is accelerating.
It is projected that the electricity load from data centres will reach approximately 45 GW by
2050 and 80 GW by 2070. For a detailed analysis, the Working Group Report on Building
Sector, Vol. 5 can be referred to.
3.4 CAPACITY EXPANSION PLANNING: METHODOLOGY AND KEY
ASSUMPTIONS
For power sector capacity expansion planning, ORDENA
8
and TIMES
9
are leveraged to assess
the impact of different policy choices, technological developments, and economic assumptions
on the energy system.
3.4.1 Model Description
Models used for power sector capacity expansion planning are technology-rich, bottom-
up models with high temporal resolution. These models utilise unit-level information of the
existing thermal fleet (coal, gas, and nuclear) in India, including capacity, efficiency, and year
of commissioning. These parameters are leveraged to simulate unit commitment and dispatch
operations within the model. For variable renewable energy sources like solar and wind, the model
adopts a more granular approach by representing Capacity Utilisation Factors (CUFs) across
different timeslices. This approach effectively captures the temporal variability of renewable
generation. Similarly, the electricity demand (load curve) is also modelled on a timeslice basis.
8 ORDENA is a mixed-integer linear optimisation program that minimises the Net Present Value (NPV) of investment
and operating costs, subject to various technical and operational constraints
9 TIMES (The Integrated MARKAL-EFOM System) model employs linear programming to determine the least-cost
energy system over a given time horizon, considering a wide range of technological and resource options Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Power 34
Methodology for Power Sector Modelling
Temporal resolution of the model: Each model year is divided into inter-annual timeslices.
Specifically, the model employs a stylised temporal resolution of 288 sub-annual timeslices,
capturing seasonal and hourly variations in solar generation, wind generation, and electricity
demand. This structure enables realistic simulation of the dispatchable thermal plant operation,
hourly renewable generation profiles and the performance of energy storage systems.
The 288 timeslices are formed by considering 24 hours of a representative day for each month
of the year, resulting in 24 x 12 = 288 timeslices (see Figure 3.2). Here, the months are referred
to as "seasonal timeslices" and the hours of the representative days are termed "day-night
timeslices."
288 Timeslices
Seasonal
Timeslices
12 Months24 Hours
Day-Night
Timeslices
Figure 3.2: Description of timeslices considered in this study
Figure 3.3 shows the schematic structure of the models (TIMES/ORDENA) used. It provides the
information on all input-output entities, associated techno-economic parameters and constraints
considered in the model.
Output Results
Capacity
Mix
Generation
Mix
Storage
Activity
Emissions
Dispatch
Pattern
System cost
TIMES/ORDENA
Technology-rich, Capacity
Expansion Planning Model for
Indian Power Sector
(Minimising discounted system
cost)
Scenario
Current Policy Scenario (CPS)
Net-zero Scenario (NZS)
Annual
electricity
consumption
projections
and load curve
Unit-wise
detailing of
existing coal, gas,
hydro and nuclear
power plants
Capacities of
existing solar and
wind plants and
their
timeslice-wise
CUF
Deﬁnition of new
units of
generation
technologies
Techno-economic
parameters of generating
units; installed capacity,
efciency, availability, life,
investment and operating
cost, emission factor
Input Data
Figure 3.3: Schematic structure of the power sector models Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Power 35
Methodology for Power Sector Modelling
3.4.2 Technoeconomic Assumptions
This study considers all ten major generation technologies currently operating in the Indian
power sector: coal, lignite, natural gas, diesel, large hydro, small hydro, nuclear, biomass, solar,
and wind. It encompasses both the existing fleet and all prospective capacity additions within
these technologies.
Coal and Lignite Power
As of March 2025, India’s utility-scale coal-based installed capacity stands at 215.2 GW, of which
about 65.3 GW is supercritical, around 4.2 GW is ultra-supercritical, and the remaining roughly
145.7 GW comprises of subcritical units. As per the latest available data for March 2024, captive
coal-based installed capacity is estimated at about 46 GW (CEA, 2025). Subcritical plants,
being less efficient and more greenhouse gas intensive, are assumed to be retired at the end
of their technical life, with no new subcritical capacity additions planned. Future coal capacity
expansion is limited to advanced ultra-supercritical (AUSC), ultra-supercritical and supercritical
technologies. The operational lifetime for new coal-based generation capacity is assumed to
be 40 years. The current installed capacity of lignite-based power plants stands at 6.62 GW;
however, no further capacity additions are planned due to their comparatively low efficiency
and higher emissions profile.
Nuclear
As of March 2025, India’s installed nuclear power capacity is 8.18 GW, comprising 0.32 GW of
Boiling Water Reactors (BWR), 5.86 GW of Pressurised Heavy Water Reactors (PHWR), and
2 GW of Pressurised Water Reactors (PWR). For future projections, this study also considers
advancements in nuclear technologies and therefore an increase in their efficiency in future.
The average plant load factor of the nuclear fleet is assumed to rise from about 78% at present
to 80% by 2070. The operational lifetime for a nuclear power plant is assumed to be 60 years.
Solar & Wind
As of March 2025, India has a total installed solar power capacity of 105.6 GW, of which
approximately 16 GW is rooftop solar, and the remaining is ground-mounted. In the case of
wind energy, the country has an installed onshore wind capacity of around 50 GW. According
to the National Institute of Solar Energy (NISE), India’s ground-mounted solar photovoltaic (PV)
potential is estimated at 3,343 GW. Similarly, the National Institute of Wind Energy (NIWE)
estimates the total onshore wind potential at 1,164 GW, based on a hub height of 150 metres
Above Ground Level (AGL).
Tables 3.5 and 3.6 present the region-wise potential and the annual maximum capacity expansion
constraints considered in this study (for state-wise RE potential, see Annexure B). It is assumed
that with incremental improvements in solar PV technology, including the adoption of tracking
systems, the capacity utilisation factor (CUF) can reach up to 25% by 2070. For wind energy, it
is assumed that all new installations will use turbines with a hub height of 150 metres, enabling
CUFs in the range of 25–30%, depending on the region of deployment. Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Power 36
Methodology for Power Sector Modelling
Table 3.5: Technology potential constraints
10,11
Region
Solar
(GW)
Onshore
Wind
(GW)
Offshore
Wind
(GW)
Large
Hydro
(GW)
Small
Hydro
(GW)
Pumped
Hydro
(GW)
NR 4,047 286 0 52 8 23
WR 3,573 413 35 8 3 60
SR 2,404 444 35 15 5 53
ER 691 20 0 10 2 18
NER 158 0.5 0 58 3 28
All India 10,872 1,164 70 145 21 181
Table 3.6: Technology expansion constraints (maximum annually)
Year
Solar
(GW/Year)
Hydro
(GW/Year)
Onshore
Wind
(GW/Year)
Offshore
Wind
(GW/Year)
Pumped
Hydro
(GW/Year)
Battery
(GW/Year)
2030-40 50 2 15 1 6 40
2040-50 90 2.5 30 2 6 60
2050-60 120 3 45 3 6 90
2060-70 160 3 55 4 6 125
Hydropower Plants
The existing installed capacity of utility-based large and small hydro power plants in India is
47.73 GW and 5.10 GW, respectively. Over the past five years, the average Plant Load Factor
(PLF) for large hydro plants has ranged between 32%-40%, while for small hydro plants, it has
varied between 22% to 26%.
Energy Storage
The Battery Energy Storage Systems (BESSs) of 4 hours and 6 hours storage duration with
a useful life span of 10-15 years have been considered. The Pumped Storage Plants (PSP) are
assumed to have 6-hour storage duration. The PSPs are assumed to have a useful lifespan of
40 years. The round-trip efficiency is taken as 88% for BESS and 80% for PSP.
Technology Cost Assumption
Since most technologies have already reached a mature stage in terms of innovation, no
significant reduction in cost estimates has been assumed, except for BESS. Further, investment
cost declines are projected based on learning cost curves. Table 3.7 presents the cost estimates
for the various technologies considered in the study.
10 ER – Eastern Region; NER- North-Eastern Region; NR – Northern Region; SR – Southern Region; WR – Western
Region; PSP – Pumped Storage Plant
11 Note: The solar potential is provided by stakeholder consultations conducted by the Working Group on the Power Sector Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Power 37
Methodology for Power Sector Modelling
Table 3.7: Cost estimates for various generating technologies
in INR Crore/MW (2025 Price)
Technology 2030 2040 2050 2070
Coal (Supercritical) 11.5 11.5 11.5 11.5
Gas6666
Biomass Plant65.95.85.7
Onshore Wind7.676.66.4
Offshore Wind15.4 14.81413.7
Solar PV4.243.753.5
Hydro RoR11.3 11.1 11.1 11.5
Hydro RoR (P)12.3 12.2 12.2 12.5
Hydro Storage1413.9 13.9 14.5
Nuclear14141414
Pumped Storage
Projects (PSP) (on
river)
6.46.36.36.7
PSP (closed loop) 6.26.16.16.5
Battery Energy
Storage
7.26.65.64.9
Source: CEA
The modelling architecture, demand estimation approaches, and techno-economic assumptions
outlined in this chapter provide a consistent and transparent basis for analysing India’s future
power system evolution. Building on this framework, the next chapter presents the results of the
power sector modelling, comparing outcomes across scenarios in terms of electricity demand
growth, capacity additions, generation mix, system costs, and emissions trajectories. Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Power 39
Methodology for Power Sector Modelling
4
SCENARIO RESULTS 40Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Power
4
Scenario Results
Building on the integrated modelling framework and scenario assumptions outlined earlier,
this chapter presents the key results of the power sector analysis. The results highlight how
different scenarios influence electricity demand growth, capacity and generation mix, per-capita
electricity consumption, investment needs, land and water requirements, and emission intensity
of grid electricity. The comparison across scenarios offers insights into the scale, pace, and
resource implications of India’s power sector transition.
4.1 TOTAL ELECTRICITY CONSUMPTION
Based on the assumptions outlined in the previous chapter, sector-wise electricity consumption
is estimated for all end-use sectors, and total electricity demand is derived by aggregating
these sectoral demands. Under the Current Policy Scenario, total electricity consumption is
projected to reach 6,544 TWh by 2050 and 9,718 TWh by 2070. This represents an increase of
more than six times by 2070 compared to 2024 levels, corresponding to a compound annual
growth rate (CAGR) of 4.1% over the period 2024–2070.
In the Net Zero Scenario, electricity consumption increases at a faster pace, reaching 8,070
TWh by 2050 and 12,997 TWh by 2070. This represents an increase of more than eight times by
2070 relative to 2024 levels (a CAGR of 4.8% during 2024–2070). Driven by higher electrification
across end-use sectors, total electricity consumption in 2070 under the Net Zero Scenario is
around 34% higher than in the Current Policy Scenario.
Figure 4.1 presents the sectoral electricity demand projections under the Current Policy Scenario
and Net Zero Scenarios. In the Current Policy Scenario, the share of the industrial sector in
total electricity consumption remains broadly stable, declining marginally from 41.6% in 2024
to 40.5% by 2070. In contrast, under the Net Zero Scenario, the industrial share increases
significantly to 48.3% by 2070. This increase in share is driven by electrification of industrial
processes and low-temperature heat, including deployment of heat pumps and community
electric boilers, to support industrial sector low-carbon transition.
In absolute terms, electricity demand in the industrial sector is projected to reach around 3,930
TWh by 2070 under the Current Policy Scenario, compared to approximately 6,270 TWh under
the Net Zero Scenario. This indicates that industrial electricity consumption in the Net Zero
Scenario is more than 1.5 times higher than that in the Current Policy Scenario by 2070.
Electricity demand in the agriculture sector is projected to reach 385 TWh by 2070 under
the Current Policy Scenario, compared to 194 TWh under the Net Zero Scenario. The lower
electricity demand in the Net Zero Scenario is primarily driven by improvements in pump
efficiency and the increasing shift from grid-based electricity for irrigation to solar-powered Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Power 41
Scenario Results
pumping systems, which are not accounted for in the electricity demand presented here.
21%
13%
40%
48%
9%
8%
14%
21%
12%
9%
1,248 1,541
2,268
2,478
6,544
8,070
9,718
12,997
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
CPS NZS CPS NZS CPS NZS
2020 2024 203020502070
Consumption (TWh)
Sectoral Electricity Consum ption
Miscellaneous+
Data Centre
Electricity for
GH
2
Transport
Industry
Buidlings
Agriculture
Total
Figure 4.1: Sectoral electricity consumption in Current Policy Scenario (CPS)
and Net Zero Scenario (NZS)
Electricity demand in the transport sector is projected to reach approximately 550 TWh by
2050 and 870 TWh by 2070 under the Current Policy Scenario. In contrast, under the Net
Zero Scenario, electricity consumption rises further to around 1,000 TWh by 2070, despite
lower overall transport activity levels. This higher electricity demand is primarily driven by
the significantly greater penetration of electric vehicles (EVs). Consequently, the share of the
transport sector in total electricity consumption increases from 2.2% in 2024 to nearly 9% under
the Current Policy Scenario and about 7.7% under the Net Zero Scenario by 2070.
The buildings sector, which accounts for nearly one-third of total electricity consumption in
2024, is projected to see a declining share by 2070, falling to 20.7% under the Current Policy
Scenario and further to 12.5% under the Net Zero Scenario. This reduction in share is primarily
driven by the widespread adoption of energy-efficient appliances and improved building
performance. In absolute terms, electricity demand in the buildings sector is projected to reach
approximately 2,015 TWh under the Current Policy Scenario and about 1,627 TWh under the
Net Zero Scenario by 2070.
The miscellaneous sector is projected to witness a substantial increase in its share of electricity
consumption, largely driven by the rapid expansion of digital infrastructure and other emerging
loads, particularly data centres. Electricity demand from data centres alone is estimated to
reach approximately 400 TWh by 2050 and about 700 TWh by 2070.
In addition, electricity demand for green hydrogen production is projected to grow significantly
over the long term, reaching around 1,330 TWh under the Current Policy Scenario and
approximately 2,770 TWh under the Net Zero Scenario by 2070.
With this, the total electricity required for green hydrogen production is projected to reach
approximately 1,350 TWh under Current Policy Scenario and around 2,750 TWh under Net Zero
Scenario by 2070. Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Power 42
Scenario Results
It is projected that this load will increase four folds by 2050 and five folds by by 2070 compared
to current levels.
The electricity required for the data centre is projected to reach approximately 400 TWh by
2050 and 700 TWh by 2070.
Box-1 Cross-Validation of Electricity Demand Projections
The electricity consumption projected in this study is broadly comparable with the
projections of India’s 20
th
Electric Power Survey (EPS) report, published by the Central
Electricity Authority (CEA). The EPS report provides estimates for both utility-based
electricity consumption and self-consumption from Captive Power Plants (CPPs). For
2029-30, this study projects combined utility and captive electricity consumptionof
2,478 TWh under the Net Zero Scenario, which aligns closely with the EPS estimate
of 2,516 TWh (1,949 TWh utility and 567 TWh CPP). Similarly, for 2040, this study
projects 3,477-3,966 TWh of utility-only electricity consumption, compared with 3,422
TWh projected for 2042 in the EPS report.
4.2 LOAD CURVE AND PEAK DEMAND
The demand profile plays a critical role in the study, as it will substantially impact the capacity
mix considering the variability of solar and wind generation, alongside the projected increase
in electricity demand from emerging sectors. Figures 4.2a and 4.2b show the load profiles
for a representative day for the years 2024 and 2070, respectively. The representative day is
constructed by averaging the load for each hour across all days in the month.
The comparison of 2024 and 2070 load profiles shows that India’s power system will not only
grow several-fold but also shift toward a mid-day, sector-driven demand shape. It is important
that capacity addition, storage, and grid investments be planned around these evolving load
signatures to keep the transition reliable, affordable, and aligned with climate goals. Recognising
and modelling this diversity is essential because it directly informs what kind of capacity India
should build (firm, variable or storage) and how much flexibility the grid must accommodate.
While carrying out this study, an in-depth analysis of India’s electricity demand profile for
2023-24 and 2024-25 was carried out. This analysis served as the baseline for projecting the
future demand profile over the coming decades. Future demand profile projections consider
the expected surge in electricity demand from emerging sectors, including:
1) Data Centres: With the rapid growth of digital infrastructure and cloud computing, data
centres are anticipated to become major consumers of electricity in the coming years. Power
demand from data centres is assumed relatively steady across all hours, as these facilities
typically operate 24/7.
2) Electric Vehicles (EVs): As India aims for large-scale electrification of its transport sector,
the charging infrastructure and increased adoption of EVs are expected to add significant new
demand to the grid. Power demand from EVs is assumed to have noticeable peaks during late
evening and early morning hours when most EVs are likely charged, and a slight increase in
demand during afternoon hours.
3) Green Hydrogen Production: Recognised as a key future clean energy source, green hydrogen
production using renewable electricity will contribute to additional energy demand, especially in Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Power 43
Scenario Results
industrial applications like steel, fertilisers, refineries and heavy transport. Power demand from
Green Hydrogen is likely to spike during mid-day hours.
By factoring in these new and evolving demand sectors, the study provided realistic and dynamic
projections of future electricity profiles, ensuring that India’s generation capacity planning, grid
stability, and clean energy transition strategies remain aligned with both environmental goals
and economic growth.
0
50
100
150
200
250
300
350
123456789101112131415161718192021222324
Load (GW)
Hours
Load Curve: Representative Day (2024)
Total
Base
Captive
Figure 4.2a: Demand profile for a representative day, 2024
0
200
400
600
800
1000
1200
1400
1600
123456789101112131415161718192021222324
Load (GW)
Hours
Load Curve: Representative Day (2070)
Total
Base
EV
Captive
GH2
Data
Centre
Figure 4.2b: Demand profile for a representative day, 2070
4.3 TRANSMISSION AND DISTRIBUTION (T&D) LOSSES
Transmission and Distribution (T&D) Losses refer to the electricity lost during its transmission
and distribution from power plants to consumers. These losses can be technical (primarily
due to conductor resistance, equipment inefficiencies) or some non-technical losses (due
to theft, meter tampering). Although the T&D losses have improved from a high of 22.84.% Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Power 44
Scenario Results
in FY 2013-14 to 17.63% in FY 2023-2024 (CEA, 2025) but it is still higher than the global
average of 8%.
The Indian government launched the Revamped Distribution Sector Scheme (RDSS) in July,
2021, to reduce AT&C losses which will lead to a reduction in T&D losses. The scheme focuses
on upgrading infrastructure, installing smart meters, strengthening distribution networks, and
adopting advanced technologies. The AT&C losses are targeted to be reduced to 12-15% by
2028. Considering the overall initiatives/measures taken by the GoI for AT&C loss reduction
in India, this study aims to reduce T&D losses to around 12% by 2030 and gradually decline
further to 8% by 2050 and saturate thereafter.
4.4 SCENARIO RESULTS
This section presents the evolution of India’s power sector in future under different transition
pathways. As India advances toward a more sustainable and increasingly electrified economy,
the structure of its power generation mix will undergo rapid change. Rising electricity
demand combined with greater daily and seasonal variability and a rising share of variable
renewables such as solar and wind, is adding complexity to system operation and planning.
In this context, projecting future generation mix requirements becomes not only a technical
exercise but a strategic necessity for ensuring long-term reliability, affordability, and climate
compatibility.
The key indicators examined are generation mix, capacity mix, GHG emissions, grid
emission factors, land and water requirements, investment needs, and per capita electricity
consumption. The analysis will also examine implications for grid flexibility, transmission
infrastructure, and fossil fuel dependency to provide clear insights to support a sustainable
and reliable power system.
4.4.1 Capacity Mix
Meeting India’s future electricity needs under different energy transition pathways will
require a substantial expansion and transformation of its installed capacity. The capacity
mix will not only need to grow to meet rising demand but also shift toward cleaner and
more flexible technologies to align with sustainability goals.
In this study, the ORDENA model incorporates both captive and utility-based electricity
demand within a single framework by considering two separate nodes. Consequently, the
resulting capacity mix reflects the combined requirements for industrial captive power and
utility-supplied electricity. In contrast, TIMES power model operates with a single national
node to determine utility-based capacity expansion, while the capacity needed to meet
industrial captive electricity demand is derived separately from the TIMES energy model.
However, for comparability, the results shown here represent the combined capacity for
both utility and non-utility (captive) electricity supply.
Figures 4.3a and 4.3b present the outlook for India’s installed power capacity by technology,
highlighting both absolute capacity and shifts in the technology composition of the overall
mix. Models result indicate a significant scale-up in total installed capacity, rising from 535
GW in 2024-25 to 4,650 - 4,750 GW (~9 times) in the Current Policy Scenario (CPS) and
6,800 - 7,350 GW (~14 times) in Net Zero Scenario (NZS) by 2070. A pronounced transition
toward variable RE, primarily solar PV and wind, is evident across both the scenarios seen Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Power 45
Scenario Results
from ORDENA and TIMES models driven by falling technology costs and competitive
Battery Energy Storage Systems (BESS) post-2040, which enable large-scale integration
of intermittent renewables into the grid. In terms of the contribution of solar and wind, their
share in capacity increases from 26% in 2023-24 to 88% and 91% in Current Policy Scenario
and Net Zero scenarios, respectively. However, in terms of total RE (including Hydro and
Biomass), the share is expected to rise sharply from 38% in 2023-24 to 91-93% by 2070.
Delving resource-wise:
Massive rise in solar PV capacities from 110 GW in 2024-25 to 4,900-5,650 GW by
2070 in Net Zero Scenario (NZS) compared to 3,150-3,250 GW in Current Policy
Scenario (CPS). This more than 50 times increase in solar capacity also has huge
land implications, which are discussed separately in the social aspects of transition
report.
Wind energy also expands strongly from 54 GW in 2024-25 to 1,050-1,300 GW
in Net Zero Scenario vs 900-1,050 GW in Current Policy Scenario, within which
offshore wind potential is largely from the coasts of Gujarat and Tamil Nadu by
2070.
Biomass grows modestly from 11.6 GW in 2024-25 to 30–34 GW by 2070.
Hydropower (including small hydro) also see a modest increase, constrained by
potential, from 53 GW to 140-155 GW by 2070.
This rising share of Variable Renewable Energy (VRE) requires a corresponding expansion of
energy storage to maintain system reliability and flexibility. Battery Energy Storage Systems
(BESS) are projected to grow from less than 50 GW in 2030 to around 1,300–1,400 GW in
the Current Policy Scenario (CPS) and 2,500–3,000 GW in the Net Zero Scenario (NZS) by
2070. Pumped Storage Plants (PSPs) are also expected to play a crucial role in providing
long-duration storage and grid stability, increasing from 13–19 GW in 2030 to about 110 GW
in CPS and 150–165 GW in NZS by 2070.
Power sector capacity choices are primarily shaped by relative fuel costs, domestic resource
availability, and reliability requirements. Unlike the EU and the United States, where natural
gas is relatively abundant and affordable, India faces structural constraints due to limited
domestic gas supply and the high cost of imported LNG. Consequently, natural gas plays
only a limited role in both scenarios over the long term. The modelling results do not
indicate new investment in gas-based generation, as available domestic gas is prioritised for
non-power uses. Existing gas plants will be gradually retired by 2050, leaving no gas-based
capacity in the generation mix thereafter.
India is making good progress in adding renewable generation capacity, with energy
storage of up to 4 hours. However, large-scale up of renewables depends on long-duration
energy storage technologies. These remain expensive and not yet available at scale. India
has ambitious nuclear power targets. However, nuclear has high capital costs and long
gestation periods. Consequently, coal-based generation is expected to play a key role in
the near to medium term to meet rising electricity demand, provide baseload supply, and
ensure grid reliability during the transition. In the Current Policy Scenario, coal capacity
rises from 268 GW (utility and non-utility) in 2025 to a peak of 450–470 GW by 2050. In
the Net Zero Scenario, coal peaks earlier at 420–435 GW by 2045 before declining as long-
duration storage and clean alternatives become more cost-competitive. These estimates Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Power 46
Scenario Results
could change if long-duration energy storage technologies become commercially viable
and if nuclear energy, in particular small and modular reactors become cheaper, enabling
faster capacity addition.
Nuclear power assumes a critical role alongside accelerated renewable deployment. In the
Current Policy Scenario, nuclear capacity increases from 8.18 GW in 2024–25 to 87–135 GW
by 2070. The Net Zero Scenario reflects the achievement of India’s nuclear mission target of
100 GW by 2047, as announced in the Union Budget 2025–26, with total nuclear capacity
projected to reach around 295–320 GW by 2070.
The net-zero pathway envisages a substantially higher share of renewables and nuclear
over the long term, contingent on major reductions in technology costs, rapid deployment
of long-duration storage, timely addition of nuclear capacity, and significant grid flexibility
enhancements. If these conditions do not materialise within expected timelines, coal is likely
to remain a key fuel for meeting growing electricity demand.
Over time, as technologies enabling large-scale renewable integration mature, coal capacity
additions decline and a portion of the existing fleet is retired based on plant lifetimes.
By 2070, remaining coal capacity in the Net Zero Scenario is projected at 145–160 GW,
significantly lower than 225–270 GW in the Current Policy Scenario. A substantial share of
this residual capacity in the Net Zero Scenario is expected to operate at low utilisation and
may remain as reserve capacity.

1654
3248
1438
3139
490
872
409
994
0
1000
2000
3000
4000
5000
2050 2070 2050 2070
2020 2025
Capacity (GW)
Installed Capac ity (GW): Current Policy Scenario
Coal Gas Nuclear Biomass Hydro Solar Wind Offshore Wind Onshore
TIMESORDENA
Figure 4.3a: Projected capacity mix in Current Policy Scenario (2050 and 2070) using two models Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Power 47
Scenario Results
104
323
95
294
2497
4840
2390
5659684
1225
750
995
0
1000
2000
3000
4000
5000
6000
7000
2050 2070 2050 2070
2020 2025
Capacity (GW)
Installed Capacity (GW): Net Zero Scenario
Coal Gas Nuclear Biomass Hydro SolarWind Offshore Wind Onshore
TIMESORDENA
Figure 4.3b: Projected capacity mix in Net Zero Scenario (2050 and 2070) using two models
The capacity share of each technology under Current Policy Scenario and Net Zero Scenario
across two power sector models is presented in Table 4.1.
Table 4.1: Capacity mix across two models in Current Policy Scenario (CPS)
and Net Zero Scenario (NZS)
Generation
Technologies
2020 2025
20502070
CPS NZS CPS NZS
Coal58% 50% 17%-18% 10% 5%-6% 2%
Gas10% 6% 0%-1% 0% 0% 0%
Nuclear 2% 2% 2% 3% 2%-3% 4%-5%
Biomass 2% 2% 1% 1% 1% 1%
Hydro11% 10% 4% 3% 3% 2%
Solar8% 21% 57%-59% 63%-65% 67%-69% 72%-77%
Wind9% 10% 16%-17% 18%-21% 17%-22% 15%-18% Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Power 48
Scenario Results
Box-2 Alternate Scenarios to achieve Power Sector Net Zero
There could be multiple pathways to achieve net-zero in the power sector. One scenario
retains a sizeable coal fleet in the generation mix even in 2070. However, realising full
power sector decarbonisation in such a Net Zero (NZ) pathway would hinge on large-scale
deployment of carbon capture, utilisation, and storage (CCUS) technologies on coal plants.
This situation becomes relevant if the growth of renewable energy (RE) and nuclear power
is slower than anticipated. In case of nuclear, there could be delays because of higher capital
costs, challenges in land-acquisition, public perception issues and long gestation periods.
In case of Renewables, there could be delays because of land constraints, grid integration
challenges. In this coal-plus-CCUS pathway, firm coal capacity partially substitutes for long-
duration storage, reducing the BESS requirement significantly.
Another scenario is where the rise in nuclear capacity remains limited, which would
necessitate even higher RE capacity, especially solar, surpassing 5,500 GW. This pathway,
however, would further increase the requirement for energy storage capacity to ensure
reliability and flexibility of the grid.
This shift reflects a broader structural transformation in India's capacity planning toward a more
flexible, storage-integrated, and low-carbon power system capable of meeting the country’s
growing electricity demand while aligning with long-term sustainability goals.
4.4.2 Generation Mix
Figures 4.4a and 4.4b show the trend and share of electricity generation from different sources
until 2070. First, the total electricity generation grows from ~2,000 TWh in 2025 to 7,350-7,700
TWh in 2050 and 11,100-11,200 TWh in 2070 under Current Policy Scenario (CPS), and 9,700-
10,200 TWh in 2050 and ~16,000 TWh in 2070 under Net Zero Scenario (NZS). Second, RE share
in generation increases from 20% in 2024-25 to over 80% in Current Policy Scenario and over
85% in Net Zero Scenario by 2070, reflecting the dominance of renewables in future electricity
generation. Third, the contribution of nuclear increases many-fold, with the contribution
increasing from 3% to 13-14% in Net Zero Scenario vs 5-8% in Current Policy Scenario, reflecting
its growing role in displacing coal-based generation and providing carbon-free baseload power.
Lastly, coal's share in overall electricity generation remains 6-10% by 2070 in Current Policy
Scenario, while in Net Zero Scenario, there is almost no generation from coal capacity. While
both scenarios see a significant decline in coal capacities, PLF during the intermediate period,
however, hovers around 62-65% indicating high utilisation. Any ramifications of decreasing this
will also have implications for grid stability. A significant coal capacity in Net Zero Scenario
(145-160 GW) may be reserve capacity rather than actively generating. Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Power 49
Scenario Results
0
2000
4000
6000
8000
10000
12000
14000
2050 2070 2050 2070
2020 2025TIMESORDENA
TWh
Electricity Generation (TWh): Current Policy Scenario
Coal Gas Nuclear Biomass Hydro Solar Wind Offshore Wind Onshore
Figure 4.4a: Projected generation mix in Current Policy Scenario (2050 and 2070) using two models
0
3000
6000
9000
12000
15000
18000
2050 2070 2050 2070
2020 2025TIMESORDENA
TWh
Electricity Generation (TWh): Net Zero Scenario
Coal Gas Nuclear Biomass Hydro SolarWind Offshore Wind Onshore
Figure 4.4b: Projected generation mix in Net Zero Scenario (2050 and 2070) using two models
Table 4.2: Generation mix across two models in Current Policy Scenario
and Net Zero Scenario
Generation
Technologies
2020 2025
20502070
CPS NZS CPS NZS
Coal74% 74% 33%-34% 21%-23% 6%-12% 0%
Gas5% 3% 0% 0% 0% 0%
Nuclear 3% 3% 5% 7%-8% 5%-8% 13%-14%
Biomass1% 1% 0.4% 0.4% 0.4% 0.3%
Hydro10% 8% 4%-6% 4% 4%-5% 2%-3%
Solar3% 7% 42% 50%-51% 58%-62% 64%-67%
Wind4% 4% 14% 15%-18% 18%-21% 16%-19% Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Power 50
Scenario Results
4.4.3 Per Capita Electricity
In FY 2023-24, India’s per capita electricity consumption stood at approximately 1,400 kWh,
representing a nearly 46% rise from about 957 kWh in FY 2013-14. This growth reflects improved
access, rising industrial and residential demand, and wider grid reliability across urban and rural
households.
India’s per capita electricity consumption is projected to increase steadily as economic growth,
urbanisation, and electrification of households and industries continue, as shown in Figure 4.5.
Under Current Policy Scenario, the per-capita electricity consumption increases by ~3.4 times
by 2050 and ~5 times by 2070 (over 2024 levels). This trajectory assumes continued reliance
on a mixed energy basket with moderate energy efficiency improvements and rising demand
from sectors like manufacturing, transport (especially electric vehicles), and residential cooling
and green Hydrogen.
In Net Zero Scenario, electricity consumption per capita would rise even more sharply. This is
driven by large-scale electrification of sectors like transport, cooking, and industry, replacing
fossil fuels with low-carbon electricity. The per capita electricity use reaches ~4.5 times by
2050 and ~7 times by 2070, with faster growth especially post-2030 as low-carbon energy
infrastructure scales up. However, this path also assumes significant gains in energy efficiency,
which again reduces the electricity consumption.
By 2050, India’s per-capita electricity consumption is expected to reach 4,800 kWh in Current
Policy Scenario and 6,400 kWh in Net Zero Scenario. By 2070, the per capita electricity
consumption is projected to reach 7,400 kWh in Current policy scenario and 10,000 kWh in
Net zero scenario. This puts us in the league of average per-capita electricity consumption seen
in other economies such as Germany (~6316 kWh in 2022) and France (~6,649 kWh in 2022)
(World Bank). However, it remains below the standards seen in other developed economies
such as the United States (~12,968 kWh in 2022) and South Korea (~11,706 kWh in 2022).
2020 2024 2030 2035 2040 2045 2050 2060 2070
kWh
Per Capita Electricity Consumption
CPS-TIMES CPS-ORDENANZS-TIMES NZS-ORDENA
0
2000
4000
6000
8000
10000
12000
Figure 4.5: Projections of per capita electricity consumption under Current Policy Scenario (CPS)
and Net Zero Scenario (NZS) Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Power 51
Scenario Results
4.4.4 Land and Water Requirement
As India aims to meet its growing electricity demand while transitioning to a low-carbon
economy, understanding the future land and water footprint of various energy technologies
is critical. Each power generation source, like solar, wind, thermal, and nuclear, has distinct
resource requirements that will shape infrastructure planning, environmental impact, and policy
decisions.
Land Requirement
Thermal power, which remains a major component of India’s energy mix, has a substantial land
footprint. Coal-based plants require land for the main plant area, coal handling and storage, ash
disposal facilities, and often dedicated water reservoirs. Nuclear power plants occupy a relatively
compact land footprint compared to solar or wind, but require stringent site selection to meet
safety, seismic, and water availability criteria. In addition to the plant infrastructure, a safety
(exclusion) zone of approximately 1-1.5 km radius is mandated around each facility where no
public habitation is allowed. Beyond this, a sterilised zone (up to 5 km) and emergency planning
zone (10–16 km) are also defined around large nuclear reactors for contingency planning. These
safety buffers significantly increase the effective land area influenced by a nuclear installation,
even if not directly used.
Utility-scale solar PV installations typically require about 3 acres (~1.22 hectare) of land per MW
of capacity. Wind energy generally has a lower direct land-use intensity, since turbines occupy
relatively small footprints within large tracts of land that can often continue to be used for
agriculture or grazing. However, turbine spacing requirements imply that large geographical areas
are needed to accommodate high levels of future capacity. The specific land-use assumptions
adopted in this study for the land requirement estimation for different generating sources are
provided in Annexure C.
2.35
4.18
3.26
5.92
0
1
2
3
4
5
6
7
20502070
Milli on Hectare
Land Requirement (Mha)
Current Policy Scenario Net Zero Scenario
Figure 4.6: Projected Land requirement for electricity generation under
Current Policy Scenario (CPS) and Net Zero Scenario (NZS) Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Power 52
Scenario Results
Based on the assumed land requirements for installing 1 MW of capacity across different
generation technologies, and the planned capacity mix derived from modelling results,
the estimated land requirements under various scenarios are illustrated in Figure 4.6. Land
requirements show a steady rise across all scenarios as renewable energy expands. In Current
Policy Scenario, land use grows from 0.68 Mha in 2030 to 2.35 Mha in 2050, reaching 4.18 Mha
by 2070 (7.5% of the total wasteland area of 55.76 Mha identified in Wastelands Atlas of India
2019). In contrast, the Net Zero Scenario sees a much higher land demand, increasing from
0.82 Mha in 2030 to 3.26 Mha in 2050, reaching 5.92 Mha by 2070 (11% of the total wasteland
under Net Zero Scenario).
Water Requirement
Thermal power plants are highly water-intensive, with consumption typically ranging from 3 to
7 m³/MWh, primarily for cooling systems and boiler feed. A significant portion of this water is
recycled internally. For instance, older plants using cooling towers see their consumptive water
use drop from approximately 7 m³/MWh without wash water recirculation to around 5 m³/
MWh when recirculation is implemented. Most of the water (typically 1 or more m³/MWh) for
boiling operations is fresh makeup water, needed to compensate for losses like evaporation,
blowdown, and steam leaks. In nuclear power generation, water consumption remains high due
to the need for continuous cooling, particularly in Pressurised Heavy Water Reactors (PHWRs)
and Light Water Reactors (LWRs).
In contrast, solar plants have minimal water needs, limited to occasional panel cleaning, though
in arid zones, this may become a stress factor requiring innovative dry-cleaning or water-efficient
technologies. Water usage in the case of wind power is negligible, making it one of the least
water-intensive energy sources.
The production of green hydrogen through electrolysis requires approximately 9 litres of purified
water per kilogram of hydrogen for the electrochemical reaction. Including additional needs for
cooling and pre-treatment, total water consumption rises to about 18–25 litres per kilogram.
However, cooling water can typically be recycled in closed-loop systems, which helps reduce
net water usage and enhances the sustainability of green hydrogen production.
The assumptions for the water-factor adopted in this study for the water requirement estimation
for electricity and hydrogen generation are provided in Annexure D.
The water requirements of the power sector will vary across different scenarios as India transitions
towards a cleaner capacity mix, as shown in Figure 4.7. In the Current Policy Scenario, water
consumption is projected to rise from 6.46 billion cubic meter/yr per year in 2030 to 10.90 bcm/
yr in 2050, before slightly decreasing to 9.13 bcm/yr by 2070 due to improvements in efficiency
and a gradual shift away from thermal (coal-based plants) generation to RE generation. In the
Net Zero Scenario, water demand is slightly higher than Current Policy Scenario in 2030 (6.63
bcm/yr) but increases significantly by 2050 (11.07 bcm/yr) and further drops to 9.90 bcm/yr
by 2070, due to the large-scale adoption of renewables, which require minimal water. However,
it is higher than Current Policy Scenario due to higher nuclear installation and green hydrogen
production in Net Zero Scenario by 2070. The increase is concerning, especially in the context
where per-capita water per capita annual availability has fallen sharply from 5,177 m³ in 1951 to
1,486 m³ in 2021, already breaching the “water-stressed” threshold of 1,700 m³ defined by the
United Nations. Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Power 53
Scenario Results
10.90
9.13
11.07
9.90
0
2
4
6
8
10
12
20502070
Billi on Cubic Metre
Water Requirement (BCM)
Current Policy Scenario Net Zero Scenario
Figure 4.7: Water requirement under Current Policy Scenario (CPS)
and Net Zero Scenario (NZS)
4.4.5 Investment Requirement
To meet future electricity requirements, substantial investments are required to expand
generation capacity alongside transmission and distribution infrastructure. Moreover, the capacity
expansion driven by increasing penetration of variable renewable energy (VRE) sources such
as solar and wind must be supported by investments in flexibility resources, including Battery
Energy Storage Systems (BESS) and Pumped Hydro Storage (PHS). These technologies will
play a critical role in managing the intermittency of VRE, ensuring grid stability, and meeting
peak load requirements. Without adequate storage integration, the reliability and efficiency of
renewable generation expansion could be significantly compromised.
In parallel, investments must prioritise the development of transmission and distribution (T&D)
networks to connect high-potential renewable energy zones, often located in remote areas with
limited or no grid access. Constructing new transmission corridors and substations, along with
integrating smart grid technologies, is essential for evacuating power from these regions and
ensuring system reliability. In many regions, the current grid is also outdated and ill-equipped to
manage the variability of renewable energy sources or the increasing number of decentralised
generation points. A well-coordinated investment strategy across generation, storage, and T&D
infrastructure will form the backbone of a reliable, efficient, and future-ready power sector.
This study considers the capital cost requirements for power sector expansion across three key areas:
(1) Capital expenditure (Capex) for various electricity generation technologies
(2) Capex for stationary energy storage systems
(3) Capex for Transmission and Distribution (T&D) infrastructure
The investment required for capacity expansion is estimated based on the unit capital cost per
MW of plant installation for different generation technologies. Assumptions for unit capital cost
considered for various generating sources in this study are provided in Table 3.7. However, for
transmission expansion, a rule-of-thumb approach based on a standard cost per MW of added
generation capacity is considered.
For estimating transmission expansion costs, this study applies a simplified rule of thumb Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Power 54
Scenario Results
based on proportional cost allocation. Under typical conditions in a conventional power
system, transmission expansion costs are assumed to be half of the total generation cost, while
distribution expansion costs are taken as one-fourth of the generation cost. This results in a
cost ratio of Generation: Transmission: Distribution to be 4:2:1. The same assumption is applied
for infrastructure planning for future coal, nuclear, and hydropower generation.
0.00
0.50
1.00
1.50
2.00
2.50
3.00
3.50
4.00
CPSNZSCPSNZS
2025-20502051-2070
Trillion USD
Investment Required in Power Sector (Trillion USD)
Generation Capacity Storage T&D
Figure 4.8: Projected investment requirements under Current Policy Scenario (CPS)
and Net Zero Scenario (NZS)
In contrast, power systems with VREs require significantly higher transmission costs. This is
mainly due to the need for additional infrastructure such as Flexible AC Transmission Systems
(FACTS), DC-to-AC conversion equipment, harmonic filters, and advanced systems for smart
grid operation and management. To capture this added complexity and cost, the ratio is adjusted
to 4:3:1 for infrastructure expansion in solar and wind power generation. This approach offers a
practical estimation method for planning purposes, particularly when detailed project-specific
transmission routing and costing data are unavailable.
Figure 4.8 and Table 4.3 present the estimated cumulative investment requirements in India’s
power sector, across generation, storage, and transmission & distribution, under the Current
Policy Scenario (CPS) and Net Zero Scenario (NZS) over the periods, highlighting significantly
higher investment needs under the net-zero pathway.
The investment requirement in Current Policy Scenario will primarily focus on meeting
incremental demand growth with a mix of conventional and renewable sources alongside
essential expansion of transmission and distribution infrastructure. The total investment needed
in Current Policy Scenario is USD 8.79 trillion. Out of that 69% is for capacity expansion (including
both generation capacity and storage capacity), and 31% is for transmission and distribution
infrastructure expansion
12
.
In contrast, Net Zero Scenario demands a far more ambitious investment strategy aimed at the
complete transformation of the power sector by 2070. This requires accelerated deployment
of renewable energy, widespread adoption of flexibility resources like battery storage and
12 Exchange rate is assumed to be 1 USD = 80 INR. Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Power 55
Scenario Results
pumped hydro, and extensive electrification across end-use sectors. Transmission and distribution
infrastructure must be significantly scaled up and modernised to accommodate variable generation
and distributed energy resources. The total investment needed in Net Zero Scenario is USD 14.23
trillion, out of which 74% is for capacity expansion, (including both generation capacity and
storage capacity), and 26% is for transmission expansion. The capacity expansion includes both
generation capacity and storage capacity. Achieving net zero will necessitate a coordinated, high-
investment approach across generation, storage, grid infrastructure, and digital systems.
Table 4.3: Investment requirements under Current Policy Scenario (CPS)
and Net Zero Scenario (NZS)
2025-20502025-2070
CPSNZSCPSNZS
Generation Capacity
(Trillion USD)
1.772.40 3.90 5.78
Storage (Trillion USD) 0.601.32 2.17 4.80
T&D (Trillion USD)1.211.43 2.72 3.65
Total (Trillion USD)3.585.15 8.79 14.23
Recognising that the feasibility of power sector low-carbon transition hinges as much on financial
architecture as on technological readiness, NITI Aayog constituted a Working Group (WG)
which examines how the power sector transition can be financed and the structural constraints
that shape capital mobilisation. WG addresses the critical issues, including the availability and
cost of capital, risk allocation across public and private actors, the role of concessional and
blended finance, domestic financial sector preparedness, and the alignment of regulatory and
institutional frameworks. For detailed information about this, the WG report on Financing Needs
(Vol. 9) can be referred.
13

4.4.6 Grid Emission Factor
The grid emission factor represents the average amount of carbon dioxide (CO₂) emitted per
unit of electricity generated and supplied to the power grid, usually expressed in kg CO₂ per
kWh. It reflects the carbon intensity of the electricity mix, depending on the share of fossil fuels
and renewables in the grid. It serves as a key indicator of the carbon intensity of a country’s
power mix and plays a vital role in India’s efforts toward low-carbon transition.
The grid emission factor is also crucial in assessing the effectiveness of electrification in
transport and industry sectors, such as penetration of electric vehicles, industrial electrification
and green hydrogen production in reducing overall emissions. A high emission factor limits
the climate benefits of these technologies, whereas a declining grid emission factor, driven
by increased renewable integration, enhances the climate advantage of electrification across
sectors, supporting India's transition to a low-carbon economy.
As per the report from CEA, India’s grid emission factor (the average CO₂ emitted per unit
13 The estimate presented in this study includes the investment requirements from both captive and non-captive
expansion under power. However, the report on Financing Needs (Vol. 9) treats the investment need for captive
under industrial sector needs, Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Power 56
Scenario Results
of electricity supplied to the grid) in 2025 is approximately 0.71 kgCO₂/kWh
14
. Under Current
Policy Scenario, where renewable scaling is at a moderate pace, and almost 240 GW of new
coal addition is envisaged by 2045, India’s grid emission factor declines but at a slow pace from
0.71 in 2025 to 0.328 by 2050 and 0.067 kg CO
2
/kWh by 2070 (see Figure 4.9).
In contrast, under Net Zero Scenario, which features massive solar and wind deployment
coupled with grid-scale storage, phased coal retirements, and strategic retrofitting, the grid
emission factor declines sharply to ~0.25 to 0.27 kg CO₂/kWh by 2050, representing a ~65%
reduction from current levels of ~0.71 kg CO₂/kWh. This steep decline is contingent on meeting
India’s non-fossil capacity targets and deploying flexible systems to handle seasonal variability
in renewable generation.
0.713
0.710
0.328
0.257
0.067
0.000
0.00
0.10
0.20
0.30
0.40
0.50
0.60
0.70
0.80
CPS NZS CPS NZS
2020 2025 20502070
kgCO
2
/kWh
Gird Emission Factor
Figure 4.9: Grid emission factors under Current Policy Scenario (CPS) and Net Zero Scenario (NZS)
4.5 LIMITATIONS
The results presented in this report are derived from a scenario-based power sector modelling
framework. As with all long-term system models, the findings are subject to underlying
assumptions and methodological constraints. This section briefly summarises the key limitations
of the analysis and clarifies how these should be considered when interpreting the results.
1. Deterministic Modelling Approach: The current analysis is deterministic and relies on a
transparently defined set of assumptions on demand growth, load curves, technology
costs, fuel prices, technology performance trends, and the evolution of clean energy
systems. While these assumptions are grounded in the best available evidence at the
time of analysis, actual future outcomes may diverge from these estimates.
Accordingly, the results should be interpreted as one plausible scenario or estimate
of the future, rather than a prediction. The findings are indicative and contingent on
specific modelling choices, rather than definitive or exhaustive. However, given the
multiple exercises taken, including by NITI Aayog and CEA separately, with reasonable
14 The table for weighted average emission factor of the Grid as published by CEA in CO
2
baseline database report
from 2013-14 onwards is given in Annexure E. Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Power 57
Scenario Results
overlap, there is high confidence in the directionality and insights indicated. Readers
should not focus on specific numbers but rather the trends, e.g., that the power sector
will continue to grow fossil fuels for some years before peaking emissions.
2. Demand Modelling and Economy-Energy Linkages: In this study, the electricity
demand used in power sector model is estimated through a soft-coupled framework
(energy sector model) with the rest of the economy. While this allows for transparent
scenario design and tractable computation, it does not constitute an equilibrium
analysis guiding an “optimal” shift of energy from other fuels to electricity; such shifts
are treated as exogenous inputs informed by broader pathways.
3. Demand Response and Distributed Energy Resources: A potentially significant source
of divergence arises from the growth of behind-the-meter and distributed energy
technologies, such as on-site storage, electric vehicles acting as flexible loads or
suppliers, and digitally enabled demand response. While the model considers India’s
existing and future captive power capacity expansion along with rooftop solar, the
future scale and system interaction of these new technologies remain highly uncertain.
Their evolution will depend critically on policy and regulatory design, including tariff
structures and net-metering rules. This will influence electricity consumption and load
profile.
4. Scenario Coverage and Sensitivity Analysis: The study presents a single reference
trajectory for each scenario, and hence does not explicitly conduct sensitivity analysis
across key uncertain parameters such as solar and wind generation profiles, load
curves, cost trends, and plant outages. While uncertainty around these parameters
can be substantial, the pathway presented is intended to represent a plausible mid-
range trajectory, and not envisaged as risky or extreme.
5. Temporal Resolution and Extreme Events: For computational and tractability reasons,
the model relies on representative demand profiles and uses hourly matching to
determine a least-cost capacity mix. This approach does not explicitly capture tail-
risk conditions or extreme system stress events, such as coincident periods of low
renewable output, extreme heat-driven demand, drought-related hydro constraints, or
fuel supply disruptions. Climate change may further increase both short-term volatility
and long-term shifts in demand and resource availability. Though the model considers
planning reserve margins, addressing these risks could require additional reserve
margins, storage, or firm capacity, potentially increasing system costs.
6. Spatial Granularity: The study is conducted at a limited spatial resolution, using
aggregated national representations rather than a fully regional/state-level
disaggregation. As a result, localised constraints related to RE potential, resource
availability, and sub-regional demand growth may not be fully reflected.
7. Transmission Representation: In this study, transmission expansion is not endogenously
optimised within the model. Though transmission cost is exogenously calculated for
the projected capacity expansion, the timing and feasibility of network expansion,
especially for integrating high shares of variable RE, could materially affect system
outcomes.
8. Load Shape Evolution: Future electricity load curves are based on projected demand growth and known electrification trends, but structural changes in load shapes, arising
from widespread EV adoption, air-conditioning penetration, industrial electrification,
and digital demand response, are only partially captured.
9. Cross-Border Interactions: In this study, cross-border electricity trade is not explicitly
modelled. While current levels of interconnection are modest, deeper regional power
integration could alter capacity requirements, flexibility needs, and system costs over
time.
10. Scaling Constraints and Implementation Risks: The last uncertainty not explicitly varied
across scenarios relates to barriers to scaling. This includes issues of (1) land availability,
which is quantified as being feasible in the study in terms of total square kilometres
required, but it may lead to logistical delays and cost increases, (2) availability and
terms of finance for capital-intensive technologies, (3) global supply chains, and (4)
skilled human capacity.
4.6 FUTURE ENHANCEMENTS
Future iterations of this work will seek to address identified limitations by expanding sensitivity
analysis, incorporating multi-year weather datasets and full 8,760-hour modelling for production
cost modelling, representing a broader portfolio of storage and flexibility options, refining
cost and performance assumptions, improving the treatment of captive and behind-the-meter
behaviour, and bringing scaling constraints directly into the modelling framework. These
enhancements will benefit from richer datasets and increased computational capacity, which
remains a binding constraint given the vast number of possible future pathways.
Overall, this analysis is intended as a living document, to be periodically revisited and refined
as new data, policies, and technologies emerge. Continuous improvement of the modelling
framework will support more adaptive, resilient, and realistic power-sector planning as India
advances toward its Net Zero objectives. Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Power 59
Scenario Results
5
CHALLENGES AND
OPPORTUNITIES 60Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Power
5
Challenges and
Opportunities
India has the dual challenge of sustaining high economic growth while limiting or reducing
emissions. Realising the development objective will entail a major transformation in power
infrastructure, the ability to leverage India’s demographic dividend, robust, low-carbon
manufacturing competitiveness, and the affordability of power. This chapter first examines
power-sector challenges across the value chain: technical, financial and regulatory, and then
discusses opportunities that must be leveraged to build Viksit Bharat by 2047.
5.1 CHALLENGES
The broad themes under which the challenges discussed in the next section are organised are
as follows:
(i) Generation Sector
(ii) Transmission and Distribution Sector
(iii) Cross-cutting Innovation and Sustainability
(iv) Project Financing
(v) Policy and Regulatory
5.1.1 Generation Sector Challenges
a. Rising Need for Grid Stability and Reserves: Solar and wind power have expanded
rapidly in India, but their inherent intermittency poses growing challenges for grid
stability. The Indian power system operates within a narrow frequency band, and
even small imbalances between supply and demand can lead to disruptions. Sudden
variations, such as a surge in wind generation or cloud cover reducing solar output,
require near-instantaneous adjustments by grid operators. Currently, grid stability is
largely maintained through coal- and hydro-based generation.
As the share of coal in the generation mix declines over time, maintaining system
stability with higher renewable penetration and reduced conventional capacity presents
a significant challenge. Energy storage, therefore, emerges as a critical requirement for
managing the variability associated with RE integration. Beyond a limited number of
pumped hydro storage projects, India does not yet have a robust, large-scale storage
network. Battery technologies, including lithium-ion and other battery energy storage
systems (BESS), are starting to roll out, but their deployment remains far below what is
required to support a renewables-dominated grid. Until storage solutions are deployed Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Power 61
Challenges and Opportunities
at scale, managing variability and ensuring system reliability will remain among the
most significant obstacles in India’s energy transition.
b. Coal Dependence: Despite significant progress in RE, coal continues to contribute
nearly 73% of India’s utility electricity generation in 2024-25. Coal-based plants offer
technical benefits such as grid stability, reliability, while providing baseload power.
While India is rapidly scaling up RE capacity, the intermittency of solar and wind power
continues to pose challenges for round-the-clock electricity supply. As a result, coal-
fired generation remains essential in the near to medium-term to ensure grid stability
and meet rapidly growing electricity demand.
The low-carbon transition in the power sector raises three key issues. First, higher
capital costs associated with new coal capacity: new coal installations, based on
advanced ultra-supercritical (AUSC) or ultra-supercritical (USC) technologies, involve
significantly higher upfront capital costs compared to older subcritical plants. Second,
the cost and performance implications of flexible coal operations: as RE penetration
increases, coal plants will be increasingly required to operate at partial loads to balance
supply and demand. This can lead to reduced efficiency. Third, the risk of stranded
assets: over the long term, a significant share of newly built or upgraded coal plants
may face early retirement before completing their planned operational life.
c. New Technology Limits: Integrating higher shares of solar and wind power is not
only a question of adding generation capacity but also of the power system’s ability
to absorb variable renewable energy safely and reliably. Various studies show that
with existing T&D infrastructure, India can handle increasing shares of renewables up
to a point (IEEFA, 2023). But beyond that, there is a need to upgrade the existing
system, such as building stronger transmission networks, deploying advanced grid
management tools, and enhancing flexibility through modern technologies.
5.1.2 Transmission and Distribution Sector Challenges
a. Transmission Expansion and Modernisation of Ageing Grid Infrastructure: One of the
critical challenges in India’s clean energy transition is the geographic mismatch between
RE sources. These range from offshore wind to large-scale solar parks in desert regions
and major load centres. Evacuating this power will require substantial investments in
high-voltage transmission infrastructure to avoid grid congestion, transmission losses,
and the under-utilisation of clean energy potential.
India’s power grid was originally designed around centralised generation from coal and
hydro-based plants. As RE grows, particularly distributed resources such as rooftop
solar (RTS), the grid must evolve to accommodate decentralised and bi-directional
power flows.
b. High AT&C Losses: India’s distribution networks continue to experience high levels of
AT&C losses. AT&C losses stood at 16.12% in FY 2023-24 (Ministry of Power), implying
that nearly one out of every six units of electricity generated is either lost within the
system or remains unpaid due to factors such as electricity theft, faulty metering, and
billing inefficiencies. These losses place significant strain on the financial health of
DISCOMs, reducing their ability to invest in system maintenance, modernisation, and
network expansion. While distribution-sector reforms are underway and several states Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Power 62
Challenges and Opportunities
have made progress, fixing distribution inefficiencies remains a slow and complex
process.
c. DISCOM Financial Stress: The financial health of DISCOMs remains one of the
most pressing challenges facing India’s power sector. Persistent financial stress has
significantly constrained DISCOM’s capacity to invest in infrastructure upgrades and
reforms essential for the clean energy transition. This, in turn, limits their ability to
reliably procure and integrate RE.
At the end of FY 2023, DISCOMs had accumulated losses of INR 6.48 lakh crore,
while the total revenue of the electricity sector stood at INR 9.57 lakh crore. A
significant portion of this revenue, INR 1.69 lakh crore (17.7%) was given as subsidies
to agriculture and small domestic consumers. These subsidies are expected to exceed
INR 2 lakh crore in FY 2024, adding further financial strain on the sector. In this
context, at least in the medium term, India must prioritise low-carbon development
pathways that are techno-economically viable and place limited additional strain
on an already fragile distribution segment.
Improving DISCOM performance will require a combination of tariff rationalisation
and targeted financial support (Ministry of Power, 2024).
d. Slow Modernisation of Distribution Grid: While India has made significant progress
in expanding power generation and transmission capacity and modernisation
thereof, the pace of modernisation of distribution grid through the adoption of
digital technologies has been considerably slower.
An example of this is the RDSS Scheme, approximately 20.33 crore smart meters
have been sanctioned for installation. However, as of January, 2026, about 5.44
crore meters have been installed nationwide (National Smart Grid Mission).
5.1.3 Cross-Cutting Innovation and Sustainability Challenges
a. Domestic Manufacturing: India’s clean energy ambitions are growing rapidly, but
the domestic supply chains required to support this growth are still developing.
Manufacturing capacity for key technologies such as solar cells, PV modules, wind
turbines and electrolysers has begun to scale up but remains below projected
demand. Until this gap is bridged, India will continue to rely heavily on imports
for critical components. This dependence increases project costs and exposes
developers to risks arising from trade disruptions, foreign exchange volatility, and
geopolitical uncertainty.
The battery sector faces similar constraints. Key elements such as battery precursors,
cells, and advanced chemistries are still predominantly sourced from other countries.
While the government’s PLI schemes and the National Critical Mineral Mission are
steps in the right direction, building a robust and self-reliant clean energy supply
chain should be a priority.
b. Low R&D and Innovation Spending: A critical but less visible challenge in India’s
clean energy transition is the relatively low level of investment in research and
development (R&D), especially by the private sector. As of FY 2020-21, India’s total
R&D expenditure stood at 0.64% of GDP (Department of Science and Technology, Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Power 63
Challenges and Opportunities
2023), significantly lower than the 2-3% observed in most advanced economies.
In the clean energy domain, many Indian firms continue to operate with modest
research budgets, resulting in greater reliance on adapting imported technologies
rather than developing disruptive innovations domestically.
Although India has emerged as one of the world’s largest solar markets, domestic
innovation in areas such as solar cell and module design remains limited. Similarly,
advanced battery chemistries and control systems are mostly imported. This
weak R&D ecosystem constrains long-term competitiveness and slows progress in
emerging areas such as long-duration energy storage, AI-enabled grid management,
and next-generation hydrogen technologies. Strengthening R&D investment across
both public and private sectors will be essential if India is to move beyond technology
adoption and play a pro-active role in shaping the global clean energy innovation
frontier. Schemes such as the Anusandhan National Research Foundation (ANRF)
and Research, Development and Innovation (RDI) schemes should be leveraged to
scale up domestic R&D.
c. Cybersecurity Risks: As digitalisation increases, the power sector becomes more
exposed to cybersecurity risks. It has already emerged as a high-value target and is
witnessing a gradual increase in cybersecurity threats. Recent global conflicts have
involved nation/state sponsored threat actors and have highlighted the importance
of ensuring adequate cybersecurity preparedness of power infrastructure.
With growing reliance on digital control and communication systems, strict
compliance with cybersecurity protocols and good cyber hygiene practices is
essential to safeguard grid integrity. In this context, in India, the establishment
of a structured cybersecurity governance framework, followed by its continuous
strengthening through an appropriate legal framework, will be essential to
systematically safeguard the power sector from cybersecurity threats.
Therefore, a comprehensive Cybersecurity Framework for building and sustaining
cyber resilience in the power sector, encompassing minimum cybersecurity
requirements, a system of periodic cybersecurity assessments and compliance
mechanisms, cybersecurity capacity building, and measures to address supply
chain cybersecurity risks, needs to be adopted to build and sustain cyber resilience
in the power sector.
5.1.4 Project Financing Challenges
a. Capital-Intensive Nature of Clean Energy Projects: Clean energy projects such as
solar parks, wind farms, energy storage systems, and supporting grid infrastructure
are inherently capital-intensive and require large upfront investments. While long-
term returns are generally stable, the initial capital requirements can be significant,
even for a large economy such as India. Domestic financing costs remain relatively
high, and exposure to foreign exchange risk can further increase borrowing costs
for projects with imported components.
Emerging technologies like offshore wind or green hydrogen are perceived as high-
risk by lenders, resulting in conservative financing assumptions and a higher cost of
capital. In this context, even modest project delays or policy changes can materially Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Power 64
Challenges and Opportunities
affect project viability. Unlocking the full potential of clean energy deployment
will therefore require not only increased investment volumes but also a financing
ecosystem that effectively de-risks new technologies and supports long-term,
sustainable infrastructure investment.
b. Inclusive Energy Transition: Energy transition entails financing requirements
beyond renewable energy deployment, including support for communities and
regions dependent on coal-related activities. Investments are needed for job
creation, reskilling, infrastructure development, and ecological restoration in coal-
dependent regions. These challenges are compounded by potential revenue losses
for governments arising from reduced coal-related taxes and royalties. In 2020-21,
the central government derived approximately 34% of its revenues from the energy
sector, while states’ dependence on the energy sector stood at around 14%.
c. Payment Delays: Persistent payment delays by several state-owned DISCOMs
continue to pose a major challenge for power sector financing (Ministry of Power).
These delays increase revenue uncertainty for developers and reduce lender
confidence, even in cases where long-term power purchase agreements (PPAs)
are in place.
While some states have introduced risk-mitigation mechanisms such as letters of
credit and escrow arrangements, these measures are not yet uniformly implemented
across the country.
5.1.5 Policy and Regulatory Challenges
a. Policy Certainty: The Central Government has taken significant steps to promote
the renewable energy sector and enhance investor confidence. While variations
in implementation across states such as tariff renegotiation and changes in
auction guidelines have occasionally affected predictability, continued emphasis
on prospective policy application will further strengthen confidence and support
sustained investment in the sector.
b. Institutional and Regulatory Landscape:
Fragmented regulatory landscape and weak enforcement: Regulatory mandates
in the power sector are spread across multiple institutions, including the Bureau
of Energy Efficiency (BEE), the Central Electricity Regulatory Commission
(CERC), and State Electricity Regulatory Commissions (SERCs). For example,
co-existence of multiple instruments such as Renewable Purchase Obligations
(RPOs) and Renewable Consumption Obligations (RCOs) under different
administrative bodies dilutes regulatory effectiveness. Weak enforcement
further undermines regulatory effectiveness. In practice, many SERCs do not
enforce penalties for non-compliance.
Uneven reform process among the states: Implementation of reforms remains
uneven across states. For example, while the Indian Electricity Grid Code
(IEGC) and CEA’s 2023 regulations
15
prescribe a Minimum Technical Load
(MTL) of 55% or such other MTL for thermal units to support renewable energy
15 Flexible Operation of Coal-based Thermal Power Generating Units Regulations 2023 Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Power 65
Challenges and Opportunities
integration, most State Grid Codes continue to mandate higher thresholds,
constraining system flexibility. There is therefore a need for uniform adoption
and operationalisation of CEA’s flexible operation regulations, including
associated compensation and incentive mechanisms, by CERC, SERCs, and
JERCs. Similar implementation gaps persist in the rollout of time-of-day tariffs,
which, despite notification in several states, remain limited in practice.
c. Technological and Market Uncertainties: India’s energy transition strategy relies on the
deployment of multiple emerging technologies, including CCUS, coal gasification, green
hydrogen, offshore wind, and battery energy storage systems (BESS). Many of these
technologies remain costly or are still at an early stage of commercial development.
These uncertainties are compounded by geopolitical risks, foreign exchange volatility,
and continued dependence on imports for several critical technologies and components.
d. Rigid Power Purchase Agreements: India’s power market is dominated by long-term
Power Purchase Agreements (PPAs), which offer limited operational and contractual
flexibility. These rigidities constrain the integration of renewable energy, particularly
given the variable and intermittent nature of solar and wind generation.
e. Regulatory conflicts in Carbon Pricing: India is introducing carbon pricing through
the Carbon Credit Trading Scheme (CCTS); however, the power sector is currently
excluded from its scope. If the power sector is brought under the carbon market in
the future, overlaps with existing instruments such as RPOs could create regulatory
conflicts and compliance complexities. Any inclusion of the power sector will therefore
need to carefully account for cost implications, particularly for end consumers.
f. Divergent Union-State Priorities: Differences in priorities between the Union and
state governments also pose challenges for the energy transition. While the Union
government emphasises energy security and international climate commitments, state
governments often prioritise local employment generation and revenue stability.
5.2 OPPORTUNITIES FOR A CLEAN ENERGY FUTURE
5.2.1 Generation Sector Opportunities
a. Unleashing India’s Solar and Wind Potential: India’s geography provides a strong
foundation for scaling clean energy. Abundant solar resources and long, windy coastlines
position the country to become a global renewable energy leader. With over 133 GW of
solar capacity and 54 GW of wind capacity installed as of Nov 2025, India has already
made substantial progress and retains significant headroom for further expansion.
Hybrid renewable energy projects that combine solar and wind on the same site present
a particularly promising opportunity, as they help smooth generation variability. The
government is actively supporting the deployment of such hybrid projects through
dedicated guidelines and policy support.
b. Distributed Generation and Rooftop Solar Expansion: India is increasingly moving
towards a decentralised energy paradigm. Rooftop solar systems across homes, offices,
and factories are emerging as an effective solution to land acquisition constraints,
reducing pressure on transmission networks and enabling consumers to generate Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Power 66
Challenges and Opportunities
power closer to the point of use. Under the PM Surya Ghar scheme, more than 10
million households applied for rooftop solar systems within the first month of its launch.
Beyond households, programmes such as PM-KUSUM are supporting the solarisation
of agricultural pumps and feeders, improving the reliability of power supply for farmers
while reducing diesel and grid dependence. From the perspective of financially stressed
DISCOMs, distributed solar also offers a strategic benefit by lowering subsidy burdens,
particularly for agricultural and low-income domestic consumers.
c. India’s Global Leadership in Clean Energy: Through the International Solar Alliance
(ISA), India has positioned itself as a global leader in advancing solar energy adoption
and international cooperation. Building on this foundation, India is spearheading the
One Sun, One World, One Grid (OSOWOG) initiative, which aims to interconnect
solar-rich regions across countries to enable cross-border exchange of clean electricity
and enhance global energy security.
India is also strengthening regional electricity trade with neighbouring countries such
as Nepal, Bhutan, and Bangladesh, contributing to improved grid stability, optimal
resource utilisation, and deeper regional cooperation.
d. Scaling Domestic Clean-Technology Manufacturing: India’s Make in India initiative
is beginning to reshape the renewable energy landscape. Backed by targeted
manufacturing incentives like the PLI scheme, the country is rapidly expanding its
industrial base for clean energy components, including solar PV modules, wind turbine
blades, batteries and electrolysers. Solar module manufacturing capacity is projected
to increase significantly by 2030, with parallel momentum emerging in battery
manufacturing.
This scale-up is reducing import dependence, lowering equipment costs, and
generating employment across the value chain. At the same time, leading renewable
energy developers are increasingly entering strategic partnerships with manufacturers
to secure supply chains. The convergence of clean energy deployment and industrial
growth is contributing to the development of a more resilient and self-reliant low-
carbon power ecosystem.
5.2.2 Transmission and Distribution Sector Opportunities:
a. Grid Expansion and Green Energy Corridors: Transmission infrastructure remains
a critical enabler of India’s clean energy transition, and significant investments are
underway for reliable evacuation and utilisation of the clean energy. High-capacity
inter-state and inter-regional transmission systems are being implemented to evacuate
renewable power from resource-rich states such as Rajasthan, Gujarat, Karnataka,
Andhra Pradesh, Tamil Nadu, etc. to major demand centres across the country. Under
the Green Energy Corridor Scheme, a few important inter-state transmission corridors
are being implemented, and state utilities are implementing intra-state transmission
system for integration and reliable evacuation of renewable energy.
b. Smart Grid and Digitalisation: Grid modernisation efforts under the Revamped
Distribution Sector Scheme (RDSS) and the National Smart Grid Mission (NSGM) are Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Power 67
Challenges and Opportunities
strengthening system reliability through the deployment of smart meters, automation,
and digital technologies. Advanced analytics, improved forecasting tools, and the use
of artificial intelligence are enhancing the integration of variable renewable energy
while supporting more efficient grid operations.
c. Strengthening market mechanism:
Payment against electricity consumption
(INR/kWh)
Purchase of Physical Power by
Consumer
DISCOM
Power Exchange
Consumer
Settlement
transfer
based on
contracts for
difference
(INR/kWh)
Green
energy
attributes
(RECs)
Receives market price (INR/kWh)
Sale of energy generated (as brown
power) in the power market
Virtual
Power Purchase
Agreement
Figure 5.1: Schematic of Virtual Power Purchase Agreement (VPPA)
Virtual Power Purchase Agreements (VPPAs) are financial contracts between
renewable energy generators and corporate buyers, under which electricity is
sold into the grid while buyers receive renewable energy certificates and price
certainty without taking physical delivery of power (see Figure 5.1). VPPAs enable
RE adoption without disrupting existing power purchase structures, benefiting
corporates, generators, and DISCOMs. However, clear policies and regulatory
frameworks are essential for large-scale adoption in India.
Local Electricity Markets (LEMs) enable direct trading between local electricity
producers—such as rooftop solar generators—and nearby consumers. These
markets can improve the utilisation of surplus electricity, reduce grid congestion,
stabilise voltage, and support more efficient local balancing of supply and demand.
Electricity Derivatives Markets: Electricity derivatives can support advanced risk
hedging and forward contracting in the power sector. As India transitions towards
a renewables-heavy grid, such instruments can help manage price volatility and
improve financial planning across the value chain.
Virtual Energy Storage: Aggregating distributed and behind-the-meter resources,
such as electric vehicle batteries, stationary batteries, flexible loads, and thermal
storage, can deliver many of the grid-balancing and peak-shaving benefits of
physical storage at lower system cost. ToD, dynamic pricing, and appropriate grid Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Power 68
Challenges and Opportunities
codes can enable consumer participation, while aggregators and digital platforms
can coordinate these resources to provide ancillary services, integrate higher
shares of renewables, and enhance overall grid resilience.
5.2.3 Cross-Cutting Innovation and Sustainability Opportunities
a. Circular Economy: Recycling of Solar Panels and Batteries: Solar panels and batteries
contain valuable materials such as silicon, copper, lithium, and rare metals, which should
not be disposed of in landfills at their end of their useful life. Recognising this, the
government has amended e-waste rules to include solar PV modules and notified the
Battery Waste Management Rules, 2022. These regulations place extended producer
responsibility on manufacturers, requiring them to manage the full life cycle of their
products.
At the implementation level, recycling enterprises are beginning to emerge, with several
firms establishing facilities to recover materials such as silver, copper, and silicon from
end-of-life solar modules. In the case of batteries, particularly electric vehicle batteries,
the regulatory framework mandates collection and recycling rather than disposal. Over
time, effective recycling systems can reduce dependence on imported critical minerals,
minimise environmental impacts, and create new green employment opportunities.
In this context, NITI Aayog has played a key enabling role by releasing three reports
on enhancing the circular economy, covering End-of-Life Vehicles (ELVs), Waste Tyres,
E-waste, and Lithium-ion-Batteries. These reports identify key ecosystem challenges
and recommend measures for infrastructure development, sector formalisation,
strengthening the Extended Producer Responsibility (EPR) framework, and enhancing
revenue generation.
b. Skilling and Workforce Development: The clean energy transition is generating
opportunities across manufacturing, construction, transport, research, and services.
National initiatives such as Skill India and PM-KUSUM are supporting workforce
development, especially in rural areas, while reskilling programmes are facilitating the
transition of workers from traditional sectors such as coal.
With the growth of clean energy industries, startups, and government-led sustainability
missions, India has a strong opportunity to translate its energy transition into broad-
based employment generation, while building a workforce aligned with future energy
system needs.
c. Clean Tech Startup Boom: India’s startup ecosystem is increasingly contributing to clean
energy innovation. From battery-swapping networks and smart inverters to agrivoltaics
solutions that blend farming with solar generation, climate-tech entrepreneurs are
finding creative ways to tackle the energy transition.
d. International and Academic Partnerships: India’s clean energy transition is being
supported by international and academic collaboration. Bilateral partnerships with
countries such as the U.S., Japan, and members of the European Union are facilitating
joint research, technology development, and knowledge exchange in areas including
advanced battery chemistries and second-life energy storage. Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Power 69
Challenges and Opportunities
India’s participation in initiatives such as Mission Innovation further strengthens access
to global research networks and funding. These collaborations help reduce innovation
risks, shorten learning curves, and support the development of domestic capabilities
while ensuring alignment with global best practices.
5.2.4 Project Financing Opportunities
a. Green Finance and Investment Opportunities: India’s transition to a low-carbon
economy has unlocked significant investment opportunities. This shift is drawing
increasing interest from both domestic and international investors through instruments
such as green bonds, sustainability-linked loans, and climate-focused funds. This will
need to be leveraged through better project design and financing instruments.
5.2.5 Policy and Regulatory Opportunities
a. Stronger Centre-State Collaboration: Improved coordination between the Union
and state governments presents an important opportunity to accelerate India’s
energy transition. New institutional platforms are emerging to support more effective
collaboration. The Cabinet Committee on Economic Affairs (CCEA) has adopted a more
active role in reviewing renewable energy targets and inter-ministerial alignment. Annual
conferences of power ministers are increasingly focused on actionable outcomes.
At the operational level, renewable-rich states such as Gujarat and Tamil Nadu are
entering into power purchase arrangements with industrial states, generating mutual
benefits. The Central Electricity Authority (CEA) is also working more closely with
State Electricity Regulatory Commissions to improve coordination in transmission
planning across state boundaries. 6
KEY
SUGGESTIONS 72Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Power
6
Key
Suggestions
Achieving net-zero emissions by 2070 will require India to fundamentally transform its power
sector, which accounted for 39.4% of the country’s total GHG emissions in 2020 (MoEFCC,
2024). This transformation will require a gradual shift away from fossil fuel-based generation
towards cleaner sources such as solar, wind, nuclear, and other low-carbon alternatives.
The transition must be carefully planned and supported by robust policy frameworks to ensure
that it remains reliable, affordable, and inclusive. The following section presents key Suggestions
across various thematic areas:
(i) Generation Sector
(ii) Transmission and Distribution
(iii) Cross-Cutting
(iv) Policy and Regulatory
(v) Project Financing
Suggestions for Power Sector Low-Carbon Transition
6.1 GENERATION SECTOR
a. Promote Adoption of Clean and Flexible Nuclear Power
(i) Nuclear Captive Shift: Industrial and large captive consumers may be encouraged
to transition from coal-based captive power plants to Small Modular Reactors
(SMR), enabling cleaner baseload generation. This shift would support national
low-carbon transition goals while maximising the use of existing land, transmission
connectivity, and industrial infrastructure.
(ii) Enabling Legislative Framework to Encourage Private Investment in Nuclear
Power: Public-Private Partnership (PPP) models may be explored to attract private
investment into nuclear power generation. This can reduce the financial burden
on the government and accelerate the deployment of clean baseload power. In
this context, the Sustainable Harnessing and Advancement of Nuclear Energy for
Transforming India (SHANTI) Act 2025, which repeals existing legislations (Atomic
Energy Act, 1962 and Civil Liability for Nuclear Damage Act, 2010) and provides
a comprehensive legal framework aligned with India’s current and future energy
needs, is significant. The Act emphasises fuller utilisation of indigenous nuclear
resources, enables active participation of both public and private sectors, and
positions India as a credible contributor to the global nuclear energy ecosystem. Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Power 73
Key Suggestions
(iii) Green Bonds for Nuclear Projects: Nuclear energy may be made eligible for green
bond financing, given that it is a low-carbon source. This can help to attract global
climate finance and support funding for new nuclear projects.
b. Scale up Co-located Solar–Wind Hybrid Plants with Storage: India should accelerate
the development of co-located solar-wind parks integrated with battery storage to
improve land-use efficiency, enhance grid utilisation, reduce curtailment, and deliver a
firmer clean power supply. Solar generation during the day and stronger wind output
in the evening and early morning complement each other, resulting in a more stable
renewable energy profile. Battery storage further enhances reliability by storing surplus
generation and meeting peak demand.
To enable this transition, Ministry of New and Renewable Energy (MNRE), in coordination
with state nodal agencies, should identify priority hybrid zones, facilitate land
aggregation, and streamline single-window clearances. The Solar Energy Corporation
of India (SECI) and state DISCOMs may issue coordinated tenders supported by
standardised PPAs and robust payment security mechanisms.
c. Promote Distributed Energy Resources (DERs): India may prioritise decentralised
solar as a core DER to meet the Viksit Bharat 2047 and net-zero objectives. This
approach can reduce land pressures, T&D losses, and system vulnerabilities arising
from geographic concentration of generation. As land is likely to remain a binding
constraint, given its competing uses for livelihoods, grazing, and biodiversity, policy
should also emphasise land-neutral solutions such as agrivoltaics, floating solar, rooftop
solar and building-integrated PV, supported through operational VGF.
To scale deployment, MNRE, in collaboration with state DISCOMs, may expand
Renewable Energy Service Company (RESCO) and utility-led aggregation models
under PM Surya Ghar and PM-KUSUM through standardised guidelines, bankable
contracts, and robust payment security mechanisms. Similar approaches may be
extended to MSMEs and public buildings. In parallel, DERs, including community solar
paired with decentralised storage, may be formally integrated into distribution planning
and resource adequacy frameworks, enabled through regulatory mechanisms such as
virtual or group net metering and subscription-based models.
d. Improve Flexibility of Existing Thermal Fleets: To integrate higher shares of VRE, coal-
based power plants must operate more flexibly under a clearly defined framework for
flexible coal operation. This should include norms for Minimum Technical Load (MTL),
ramp rates, and start-up/shutdown procedures. Lower MTLs and higher ramping
capabilities enhance the system’s ability to absorb higher RE generation during solar
peak periods while maintaining grid stability. However, implementation of such a
requirement must account for unit-specific technical retrofits and operators’ training
for sustained low-load operation. Promotion of flexibility entails the following measures:
(i) CEA, in collaboration with relevant agencies, may implement and monitor a
phased flexibility programme to achieve lower minimum load operation. The CEA
has recently notified a flexibility plan for operating coal plants at 40% MTL (VGBE
PowerTech, 2023). This plan needs to be implemented by RLDCs/SLDCs following
a comprehensive analysis of the thermal fleet operating under their jurisdiction. Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Power 74
Key Suggestions
(ii) To incentivise flexible operation, CERC/SERCs need to operationalise and extend
compensation frameworks for flexible operation and enable market-based
monetisation of flexibility.
e. Repurposing Retired Coal Plants as Clean Energy Hubs: Ministry of Power (MoP), in
coordination with Central Electricity Authority (CEA), needs to prepare a structured
plan to retire old and inefficient thermal power plants, particularly units over 25 years
old with low efficiency and high emissions. Once retired, these sites can be repurposed
as clean energy hubs by leveraging existing land, water availability and transmission
infrastructure.
f. Repower Ageing Wind and Solar units: Many older wind turbines and solar installations
are based on outdated technologies and operate at lower efficiencies. Replacing these
assets with newer, more efficient ones, such as higher hub height wind turbines or
higher efficiency solar modules on the same land parcels can significantly increase clean
energy output while minimising incremental land and grid infrastructure requirements.
To enable this, MNRE, in collaboration with state DISCOMs, may identify potential
repowering assets. State DISCOMs in partnership with project developers should also
establish repowering-friendly PPA pathways and incentivise incremental generation
through clear metering and settlement mechanisms for upgraded capacity.
g. VGF Support for Promising Clean Energy and Storage Technologies: A dedicated
Viability Gap Funding (VGF) scheme may be developed to accelerate the deployment
of first-of-a-kind and emerging clean energy technologies, including advanced solar
such as Concentrated Solar Power (CSP), as well as long-duration storage solutions
like Pumped Storage Projects. CSP offers valuable system benefits, including inherent
thermal storage capability, dispatchable renewable generation, and improved evening
and peak-hour supply, thereby enhancing grid flexibility and reducing reliance on
fossil-based peaking power. Similarly, pumped storage provides critical services such
as flexibility, inertia, reactive power support, and Fault Ride Through (FRT) capability,
which are essential for large-scale integration of renewable energy.
The VGF framework should be technology-agnostic and targeted toward projects that
demonstrate strong potential for cost reduction, grid stability, and domestic value
creation. Such support would help de-risk early investments, enable commercialisation
of next-generation solutions, and strengthen India’s transition to a resilient, low-carbon
power system.
h. Promote Storage through Market-Based Incentives and Competitive Procurement
(Across Technologies): To enable a flexible and renewable-rich power system, India
should prioritise market-driven mechanisms that encourage cost-effective deployment
of energy storage. Appropriate price signals, such as time-of-day tariffs, ancillary
service markets, and capacity remuneration mechanisms, can incentivise investment in
both short-duration solutions like batteries and long-duration options such as pumped
hydro and emerging hydrogen-based storage.
Storage should be integrated into national and state resource adequacy planning and
procured through technology-agnostic, competitive tenders that value system services
including flexibility, peak support, and reliability. Strengthening domestic battery Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Power 75
Key Suggestions
manufacturing, streamlining regulatory approvals, and expediting pumped hydro
development will further support least-cost deployment. A market-oriented approach
will help deliver round-the-clock clean energy while enhancing grid resilience.
6.2 TRANSMISSION AND DISTRIBUTION SECTOR
a. Build Infrastructure for Renewable Power Evacuation: As India accelerates its RE
deployment, the timely development of supporting transmission infrastructure is
essential to ensure that generation capacity does not outpace evacuation readiness.
Renewable-rich states such as Rajasthan, Gujarat, Tamil Nadu, Andhra Pradesh,
Karnataka, etc., require robust intra-state and inter-state transmission systems to
efficiently deliver power to demand centres.
Transmission schemes associated with RE generation must be prioritised and fast-
tracked to align with the commissioning timelines of upcoming solar and wind
projects. In parallel, states should identify and allocate land for RE zones and
work closely with central agencies to plan shared transmission infrastructure. A
coordinated approach that aligns generation and transmission planning will be
critical to enabling the reliable, affordable, and large-scale integration of renewables
into the grid. Further, States should plan and implement intra-state transmission
network commensurate with load growth and expansion of Inter-State Transmission
System (ISTS).
b. Strengthen Cross-Border Transmission Networks: Strengthening cross-border
transmission infrastructure is critical for enhancing regional power system resilience
and advancing India’s clean energy goals. As domestic renewable capacity scales
up and electricity demand continues to grow, regional interconnections enable
the import of low-cost hydropower from Bhutan and Nepal, facilitate the export
of surplus solar and wind power during peak generation periods, and provide
additional flexibility through cross-border balancing.
These efforts align with India’s broader vision under the One Sun One World One
Grid (OSOWOG) initiative. To realise this potential, India should fast-track high-
capacity interconnection corridors, jointly harmonise grid codes and operating
procedures, streamline regulatory clearances, and promote planning and investment
in transmission infrastructure. A well-integrated regional grid can strengthen energy
security, unlock clean energy trade, and position India as a leader in South Asia’s
energy transition.
c. Accelerate Smart-Grid Digitalisation: To meet the growing power demand and
enable large-scale renewable integration, India must accelerate the digitalisation of
its grid. This includes upgrading existing infrastructure with real-time monitoring
systems, automating substation operations, and adopting centralised control
through Supervisory Control and Data Acquisition (SCADA) and remote monitoring
tools.
Utilities should implement predictive maintenance using AI-based tools, develop grid
“digital twins” to simulate network behaviour, strengthen cybersecurity protocols,
and train personnel in digital operations. Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Power 76
Key Suggestions
Special focus must be placed on building a grid that is not only smart but also
secure and resilient: capable of isolating faults, withstanding cyberattacks and
recovering quickly from disruptions. Fast-tracking these interventions will be key
to building a reliable, responsive, and future-ready grid.
d. Enable Peer-to-Peer Energy Trading: With the growing adoption of rooftop
solar and behind-the-meter storage, Peer-to-Peer (P2P) energy trading offers a
new opportunity to improve local energy access and system efficiency. Enabling
consumers to act as prosumers and trade surplus power within communities can
reduce grid stress and accelerate clean energy uptake.
This will require a supporting digital public infrastructure for energy, building on
India’s emerging Energy Stack, to enable interoperable smart meter data, consent-
based data sharing, and secure, low-cost transactional rails for P2P energy markets.
Regulatory sandboxes should be used to pilot new business models and digital
trading platforms in a controlled environment, with lessons from these pilots
informing the development of a national framework for distributed energy markets.
e. Reduce AT&C Losses: Reducing AT&C losses remains central to improving the
financial health of DISCOMs and ensuring a reliable power supply. This will require a
focused push on feeder segregation, distribution network upgrades, and a consumer-
centric rollout of smart metering. Smart and prepaid meters should be deployed
in a manner that delivers clear benefits to consumers, such as accurate billing,
better consumption insights and flexible payment options, thereby strengthening
acceptance and participation while reducing theft and billing inefficiencies.
f. Improving the Financial Viability of DISCOMs: Improving the financial viability
of DISCOMs is critical to unlocking sustained investment in grid modernisation
and enabling the power sector transition. MoP may consider designing a one-time
DISCOM debt takeover and restructuring scheme, with central support provided
on a conditional basis. Such support should be explicitly linked to the adoption of
credible and irreversible structural reforms. These measures should be supported by
clearly defined, time-bound milestones for governance improvements and efficiency
gains. DISCOMs may also explore additional revenue streams by monetising non-
core assets, such as leasing unused land and increasing participation in non-PPA
power markets.
g. Feeder Separation for 24x7 Reliable and Quality Power Supply: To ensure all
consumer categories receive, high quality reliable electricity supply, feeder
segregation is critical. Segregating agricultural and non-agricultural rural feeders
has already enabled several states to improve load management, enhance supply
to rural households and small industries, and achieve more accurate accounting
of agricultural subsidies announced by state governments (World Bank, 2013).
Each state may therefore adopt a feeder-segregation model best suited to its
network conditions and consumer mix, guided by rigorous cost-benefit analysis
and implemented within a clearly defined time frame.
h. Enable Competition and Active System Management in Distribution: This will
require amendments to the Electricity Act (2003), to allow multiple distribution Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Power 77
Key Suggestions
licensees to supply consumers over the incumbent utility’s network through
mandatory, non-discriminatory open access. This would separate the “wires” and
“supply” functions, expand consumer choice and avoid duplicative infrastructure.
In parallel, the introduction of Distribution System Operators (DSOs) for real-time
management of the distribution network may be considered. DSOs would be
responsible for actively managing the low-voltage networks, integrating distributed
energy resources, including virtual storage such as smart loads and vehicle-to-grid
systems, and procuring local flexibility.
6.3 CROSS-CUTTING SUSTAINABILITY AND INNOVATION
a. Forecasting and Scheduling: As India’s RE capacity grows, accurate forecasting
and scheduling will be critical to maintaining grid stability and ensuring efficient
dispatch. Advanced tools based on Artificial Intelligence (AI), machine learning, and
high-resolution weather models should be more widely deployed for both demand
and generation forecasting, particularly in RE-rich states. To strengthen forecasting
and scheduling, the following measures may be considered:
(i) Regulators may mandate high-accuracy forecasting for all grid-connected
RE plants, with clear performance benchmarks and penalties for persistent
deviations.
(ii) At the national level, MNRE may propose a standardised methodology and
dashboard to aggregate forecasts, enabling improved planning and real-time
system-level decision-making.
b. Strengthen Domestic Manufacturing & Circularity: To ensure long-term self-reliance
and global competitiveness in clean energy, a robust clean tech manufacturing
ecosystem needs to be developed. While the PLI schemes have successfully catalysed
initial investments, the next phase should focus on strengthening domestic value
chains, fostering collaborative R&D, and improving access to affordable, long-term
capital.
In this context, the National Manufacturing Mission offers a timely opportunity to
drive scale, innovation, and coordination across the sector (Council for International
Economic Understanding). Their effectiveness will depend on aligning manufacturing
targets with projected energy demand, supported by stable procurement pipelines
and clear, long-term policy signals.
In parallel, the MoEFCC, in collaboration with MNRE, may operationalise traceability
and recycling standards for solar PV modules and battery systems under the updated
waste management rules (PIB, 2023). This would help to create an assured end-of-
life feedstock pipeline and support the development of a circular cleantech economy.
c. Mandatory Cyber-Security framework for Power Sector: CEA, in coordination with
designated Government Agencies such as CERT-In & NCIIPC may mandate a uniform
minimum cybersecurity framework for utilities, grid operators and critical power
infrastructure. This framework should cover inter alia, regular third-party security
audits, incident reporting protocols, network segmentation, access controls, and
supply-chain security for both hardware and software. Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Power 78
Key Suggestions
Periodic compliance assessments should be instituted to ensure continuous
adherence to strengthen the resilience of the power system against evolving cyber
threats.
d. Streamlining Land Acquisition: Faster land acquisition is essential to meet India’s
growing renewable and transmission needs. This requires coordinated planning
between central and state governments to identify and pre-approve land parcels
for energy projects. Digitising land records and setting up single-window systems
for clearances can greatly reduce delays. At the same time, innovative models like
land leasing or pooling may be explored.
6.4 POLICY AND REGULATORY
a. Move Towards Cost-Reflective Tariffs: India’s electricity tariff structure is complex and
varies across states, marked by multiple slabs, non-uniform pricing, and heavy cross-
subsidisation. This results in inefficiencies, limited transparency, and financial stress for
DISCOMs. Tariffs should therefore be gradually rationalised to better reflect the true
cost of supply, while continuing to protect low-income households through targeted
subsidies.
b. Scaling out Time-Based Electricity Pricing (ToD/ToU): Dynamic pricing mechanisms
such as ToD and ToU tariffs encourage consumers to shift electricity consumption to
off-peak periods. This promotes demand response, reduces peak load stress on the
grid, and facilitates improved integration of VRE.
c. Set Feeder-Level Loss Reduction Targets: Regulators may encourage DISCOMs to
track and report technical and commercial losses separately at the feeder level. Clear
and time-bound targets, particularly for high-loss feeders, can be established to enable
targeted interventions and improve accountability in performance monitoring.
d. Strict Enforcement of Clean Energy Mandates: Effective implementation of Renewable
Consumption Obligations (RCOs) and other clean energy mandates should be ensured
by clearly defining compliance pathways, monitoring mechanisms, and penalties for
non-compliance across all obligated entities. Stronger Centre–State coordination will
be essential to harmonise targets, avoid overlapping or conflicting mandates, and
ensure consistent enforcement.
e. Shift Towards Market-Based Renewable Energy (RE) Models: At present, power
capacity is largely added through long-term Power Purchase Agreements (PPAs) or
Power Sale Agreements (PSAs). To facilitate sustainable scaling of power capacity,
greater reliance on market-based mechanisms such as green markets, power
exchanges, and short-term bilateral trading may be encouraged. These approaches
enhance flexibility, attract private participation, and reduce dependence on centralised
procurement. This shift can be supported through the following measures:
(i) Implement Ancillary Service and Capacity Markets: Accelerate the rollout of a
comprehensive ancillary service market and establish a formal capacity market
to ensure adequate reserves, system flexibility, and long-term resource adequacy.
These markets incentivise fast-response resources such as storage, demand
response, and flexible generation, while providing DISCOMs and investors with Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Power 79
Key Suggestions
clearer price signals and revenue streams.
(ii) Strengthen Open Access Rules: Open access enables large consumers to
competitively procure RE across states and regions. Simplifying the approval
process, ensuring non-discriminatory wheeling and surcharge structures and
providing long-term regulatory certainty can reduce transaction costs and
accelerate RE uptake.
f. Make Rooftop Solar Mandatory for Government Buildings: Decentralised Renewable
Energy (DRE) systems such as Rooftop Solar (RTS) offer significant benefits by
reducing grid dependence, minimising technical losses, and lowering infrastructure
costs. To accelerate deployment, installation of RTS systems may be made mandatory
for all public buildings, using models such as Renewable Energy Service Company
(RESCO) to minimise upfront investment. In addition, replacing diesel generators with
battery storage systems integrated with RTS should be strongly encouraged.
g. Capacity Building for a Future-Ready Power Sector: As India’s power sector evolves
with increasing RE integration, digitalisation, and advanced grid technologies,
continuous capacity building will be essential. There is a need to institutionalise regular
and specialised training and upskilling programmes for power sector professionals
including DISCOM personnel, grid operators, and regulatory staff, especially in areas
like smart grid operations, cybersecurity, RE and demand forecasting, and storage
integration. Collaborations with premier technical institutions, public-private training
partnerships, and the development of online modular courses can make capacity
building more accessible and scalable. Regulators may also encourage DISCOMs to
allocate dedicated funds and set annual targets for workforce training.
h. Establish a National Grid Resilience Task Force and Mandate State-Level IRP: A
National Grid Resilience Task Force may be established, comprising, CEA, Grid-India,
MNRE, and state utilities, to provide strategic direction on managing variability, reliability
and stability in a high-RE system. In parallel, states should carry out Resource Adequacy
Studies to holistically assess conventional capacity, RE capacity, storage requirements,
flexibility resources, including demand response, and associated transmission and
distribution build-out. Regularly updated Resource Adequacy Plans will help align
investments and minimise the risk of stranded assets.
6.5 PROJECT FINANCING
a. Mobilise Concessional and Blended Climate Finance: India’s clean energy transition will
require sustained access to affordable, long-term capital across the energy value chain.
To enable this, concessional finance from multilateral development banks and global
climate funds should be strategically leveraged to support large-scale infrastructure
investments, including transmission networks, energy storage, and RE projects.
Structuring integrated projects such as solar-plus-storage or grid-modernisation
bundles can help attract blended finance and reduce project risk. These efforts may
be complemented by financial innovations such as securitisation of future revenues
and the use of credit enhancement instruments to unlock private sector participation
and lower the overall cost of capital. Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Power 80
Key Suggestions
b. New Franchise Models in Power Distribution: Introducing alternative franchise models
(see Figure 6.1) for power distribution in cities and towns can improve operational
efficiency, service quality, and innovation, while ensuring consumer accountability.
Beneﬁt for DISCOMsBeneﬁt for private RESCOsBeneﬁt for Community
GDF is a PPP approach that allows DISCOMs to reduce ﬁnancial losses, allows
private RESCOs to service loss making areas by integrating renewables, and
enables 24/7 cleaner power for customers
High cost of extension/ High
T&D losses over long distances
to reach remote locations
Poor service and Low
recovery for DISCOMs
RESCO under mGDF, adds local
generation capacity and storage system
to supplement grid power
Inefﬁcient last mile operations
and low energy demand
Generation at Point of
Consumption to reduce losses
with grid interactivity
Smart Grid technologies,
efﬁcient billing & collection
system
Strong community connect to
support operational efﬁciency
and efforts for demand
generation
Central Generation
/Grid
220/33 kV
Substation
33/11 kV240 V
• Commercially viable business
model in rural/peri-urban areas
• Value added services to large
customer base
• Integrate DRE & smart grid
technologies
• 24/7 reliable power
• Better customer service
• Local Green Job creation
• No increase in tariff
• Improved quality of life
• Outsourcing of loss-making
areas
• 100% recovery of input power
• Enhanced grid decarbonisation
• Improved customer satisfaction
(C-SAT)
Figure 6.1: Generation and Distribution Franchisee (GDF) ANNEXURES 82Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Power
Annexure A:
Recent Interventions
to promote Renewable
Energy uptake
CategoryRecent Interventions
Solar
Under the PLI scheme, the GOI has announced INR 19,500 crores to incentivise
the manufacturing of domestic solar PV modules.
PM-Surya Ghar: Muft Bijli Yojana released with a total outlay of INR 75,021 Cr
for installing RTS for one crore households. The scheme provides a Central
Financial Assistance (CFA) of INR 30,000 for a 1 kW RTS system, INR 60,000
for a 2kW RTS system, and INR 78,000 for a 3kW RTS system.
The inter-state transmission charges are waived for 25 years for the projects
being commissioned before 30th June 2025, with graded transmission charges
thereafter.
The updated RPO compliance supports a specific other RE integration (which
includes solar) of up to 34.02% of the electricity purchased by DISCOMs/states
till the year 2029-30.
PM KUSUM scheme has been extended till March 2026 to install agriculture
pump sets with upto; 15 HP in selected areas.
Wind
Reverse auctions have been scrapped for wind projects. A traditional two-part
(technical and financial) bid system has been put in place.
To support offshore wind, SECI will invite bids for up to 4GW to set up
offshore wind plants off the coast of Tamil Nadu and Gujarat.
The ISTS charges are waived for 25 years for the onshore projects being
commissioned before 30th June 2025 and for offshore projects on or before
31st December 2032.
The updated RPO compliance supports wind integration of up to 3.48% of the
electricity purchased by DISCOMs/states till the year 2029-30.
The National Repowering & Life Extension Policy for Wind Power Projects-
2023, for wind power projects, is released for the optimum utilisation of wind
energy resources by maximising energy (kWh) yield per sq. km of the wind
project areas.
GoI has decided to invite bids for 50 GW of RE annually, which includes up to
10 GW of wind capacity. Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Power 83
Annexure A: Recent Interventions to promote Renewable Energy uptake
Energy
Storage
The Ministry of Power has released the guidelines for the development of PSP
with the target of 26.7 GW of PSP and 47.2 GW of BESS to integrate with RE
capacity till 2032.
PLI scheme unveiled for setting up 50 GWh ACC battery storage with an outlay
of INR 18,100 crores.
Under the Waste Management Rules 2022, the disposal of waste batteries in
landfills and incineration is prohibited and the recycling of waste batteries is
made mandatory.
CERC, under RRAS regulation, has allowed the use of energy storage in
secondary and tertiary ancillary support.
The Energy Storage Obligation of DISCOMs is pegged at 4.0% up to 2029-
30. This obligation shall be considered fulfilled only when at least 85% of the
total energy stored in the Energy Storage System (ESS), on an annual basis, is
procured from renewable energy sources.
Under the aegis of MNRE, SECI has successfully commissioned India's largest
BESS plant, featuring a 40 MW/120 MWh BESS alongside a solar PV plant of
152 MWh, located in Rajnandgaon, Chhattisgarh.
Green
Hydrogen
(H
2
)
The National Green Hydrogen Mission (NGHM) was approved by the Cabinet in
January 2023. The mission aims to meet the target of 5 million metric tonnes
of green hydrogen production by 2030. The initial outlay for the Mission will be
INR 19,744 crores.
MNRE has released the scheme guidelines for the implementation of pilot
projects for the use of Green Hydrogen in the shipping, steel, and transport
sectors under the NGHM.
MOP has extended the waiver of ISTS charges from 30
th
June 2025 to 31
st

December 2030.
Indian Railways to run 35 Hydrogen trains under “Hydrogen for Heritage” at an
estimated cost of INR 80 crores per train and ground infrastructure of INR 70
crores per route on various heritage/hill routes.
Jindal Stainless Ltd., in collaboration with Hygenco, commissioned India’s 1
st

green hydrogen plant in the stainless steel sector at Hisar, Haryana, which aims
to reduce CO
2
emissions by 2,700 metric tonnes per annum. 84Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Power
Annexure B:
State/ UT-wise
Renewable Energy
Potential
State
Solar
(GW)
Large Hydro
(GW)
Wind
(GW)
Small Hydro
(GW)
Pumped
Storage
(GW)
Bio Power
(GW)
Andaman & Nicobar - 0.00 1.25 0.01 0 0.018
Andhra Pradesh 704.88 2.60 123.34 0.41 26.42 2.279
Arunachal Pradesh 2.36 50.39 0.25 2.06 0.66 0.018
Assam77.14 0.64 0.46 0.20 0.32 0.322
Bihar134.57 0.13 4.02 0.53 0 1.311
Chandigarh0.2 0.00 0.00 0.00 0 -
Chhattisgarh312.41 1.31 2.75 1.10 8.525 0.354
Dadra & Nagar Haveli
& Daman & Diu
1.64 0.00 0.02 0.00 0 0.002
Delhi2.38 0.00 0.00 0.00 0 -
Goa11.48 0.00 0.01 0.00 0 0.033
Gujarat1005.7 0.55 180.79 0.20 7.7 3.193
Haryana32.87 0.00 0.59 0.11 0 1.715
Himachal Pradesh 66.35 18.31 0.24 3.46 7.26 0.07
Jammu & Kashmir 38.98 12.26 0.00 1.31 0 0.083
Jharkhand152.36 0.30 0.02 0.23 1.5 0.146
Karnataka739.36 4.41 169.25 3.73 7.6 3.556
Kerala20.2 2.47 2.62 0.65 1.2 0.778
Ladakh27.3 0.71 0.00 0.40 0 -
Lakshdweep- 0.00 0.03 0.00 8.56 0.001
Madhya Pradesh 938.05 2.82 55.42 0.82 43.405 2.516
Maharashtra1303.79 3.14 173.87 0.79 0 6.547
Manipur8.87 0.62 0.00 0.10 0 0.062
Meghalaya44.22 2.03 0.06 0.23 5.55 0.069
Mizoram0.95 1.93 0.00 0.17 0 0.003
Nagaland1.14 0.33 0.00 0.18 5.075 0.054 Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Power 85
Annexure B: State/ UT-wise Renewable Energy Potential
State
Solar
(GW)
Large Hydro
(GW)
Wind
(GW)
Small Hydro
(GW)
Pumped
Storage
(GW)
Bio Power
(GW)
Odisha400.14 2.83 12.13 0.29 0 0.299
Puducherry0.24 0.00 0.41 0.00 0 0.005
Punjab49.28 1.30 0.43 0.58 9.2 3.436
Rajasthan2457.82 0.41 284.25 0.05 0 1.3
Sikkim1.54 6.05 0.00 0.27 16.5 0.005
Tamil Nadu499.24 1.79 95.11 0.60 8.755 2.199
Telangana439.6 1.30 54.72 0.10 0 1.795
Tripura23.22 0.00 0.00 0.05 16.62 0.034
Uttar Pradesh 666.75 0.50 0.51 0.46 1 7.726
Uttarakhand704.88 13.48 0.05 1.66 5.5 0.308
West Bengal2.36 0.81 1.28 0.39 0 1.742
Others0.000.284
Total10,872.28 133.41 1163.86 21.13 181.35 42.26
Source: ICED & PIB
Note: The solar potential is provided by stakeholder consultations conducted by the Working Group on the Power
Sector 86Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Power
Annexure C:
Assumptions on
Land-Use Factor per
MW of Power
Land-use factor (Acres per MW)
2030 2050 2070
Coal Power Plant0.80 0.80 0.80
Gas Power Plant0.12 0.12 0.12
Nuclear Power Plant0.60 0.60 0.60
Large Hydro Power Plant4.99 4.99 4.99
Solar PV Plant2.97 1.98 1.98
On-shore wind Power Plant3.46 3.46 3.46
Biomass Power Plant5.98 5.98 5.98 87Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Power
Annexure D:
Assumptions on
Water-Use Factor
per Unit of Output
Water-Use Factor
Coal Power Plant (MCM/Mtoe)40.65
Gas Power Plant (MCM/Mtoe)14.30
Nuclear Power Plant (MCM/Mtoe)44.43
Green Hydrogen Plant (litre/kgH
2
or MCM/Mt)25 88Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Power
Annexure E:
Weighted Average
Emissions Factor of Grid
Electricity kgCO
2
/kWh
FY
Total CO
2

Emissions
(Million Tonnes)
Net Generation
(BU)
Conventional
RE
Generation
(BU)
Total Net
Electricity
Generation
(BU)
Weighted Average
Emissions Factor of Grid
Electricity (Including RE)
tCO
2
/MWh
2013-14 727.4 886.77 53.06 939.830.774
2014-15 805.4 972.04 61.72 1033.760.779
2015-16 846.3 1027.03 65.78 1092.810.774
2016-17 888.34 1072.84 81.55 1154.390.770
2017-18 922.18 1121.57 101.84 1223.410.754
2018-19 960.9 1165.16 126.76 1291.920.744
2019-20 928.14 1162.97 138.34 1301.310.713
2020-21 910.02 1147.52 147.25 1294.770.703
2021-22 1002.01 1230.09 170.91 1401.010.715
2022-23* 1108.11 1320.18 203.55 1547.800.716
2023-24 1203.36 1408.45 225.83 1654.540.727
2024-25 1234.19 1461.85 255.01 1739.060.710
*For the years 2022-23 onwards, total CO2 emissions and total net electricity generation figures are are adjusted
for cross-border electricity transfers and are inclusive of electricity injected into the grid by grid connected captive
power plants
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org/country/US VOL. 7
SECTORAL INSIGHTS:
POWER
SCENARIOS TOWARDS VIKSIT BHARAT AND NET ZERO

⁠Scenarios towards Viksit Bharat and Net Zero - Sectoral Insights: Power (Vol. 7)