Bridging the Energy Gap: Bracing India’s Power Sector for the Demand Surge

India’s Power Sector: The Current Scenario
As the 3rd largest producer and consumer of electricity, India’s power sector carries significant influence over global energy trends and climate action. In recent years, the government has introduced critical reforms to align the country’s economic growth with the 500 GW renewable energy target and derive 50% of the installed capacity from renewables by 2030. These include setting up solar parks, Production Linked Incentive (PLI) schemes, strengthening the electric vehicle (EV) infrastructure, and decentralization initiatives such as the PM-KUSUM (Pradhan Mantri Kisan Urja Suraksha evam Utthaan Mahabhiyan (PM-KUSUM) and PM Suryaghar Muft Bijli Yojana.
 
As of July 2024, India’s total installed capacity is 448 GW, with renewables contributing about 44% to the energy mix. However, as per the Ministry of Power’s Annual Report, traditional fuels still dominate the sector, accounting for approximately 76% of the total generation of 1739.091 BU during 2023-24.

The Demand-Generation Inconsistency
The substantial reliance on traditional fuels underscores the challenges faced by emerging economies in balancing their developmental goals with climate commitments. The variability of renewables becomes a roadblock in India’s drive towards electrification and industrial expansion in a climate-conscious way—complicating the generation, capacity, and demand dynamic. For instance, the increased demand for cooling appliances in the event of prolonged heatwaves in India this summer resulted in increased load on the grid, power outages, and low-quality supply, thereby heightening reliance on traditional fuels. The Ministry of Power identified an energy shortage of 4112 MU and a peak shortage of 3340 MW during 2023-24.
 
These statistics are of immense importance to our power sector as the energy demand will only continue to grow. The Central Electricity Authority (CEA) in their 20th Electric Power Survey Report estimates peak demand and energy requirement to be around 335 GW and 2280 BU, respectively, by 2029-30. A technical report by the University of California’s Indian Energy and Climate Center suggests that rapid growth in India’s power demand could result in significant power shortages of about 20-40 GW by 2027, even if all the under-construction hydro and thermal power plants come online. Addressing these challenges will require not only continued investment in renewable energy infrastructure but also advancements in grid integration, energy storage solutions, and policy frameworks that support a just and equitable transition.

Strengthening Renewable Energy Infrastructure to Address the Energy Gap
As the nation’s power demand continues to escalate amidst these transformations, we need a shift in the narrative that explores innovative ways to strengthen renewable energy infrastructure. To begin with, we need to increase installed renewable energy capacity to cater to the demand surge. Technologies such as rooftop solar can be deployed to decentralize the grid and reduce load. Simultaneously, efficiency standards for appliances need to be revised. Renewable intermittency needs to be addressed with power storage options such as Battery Energy Storage Systems (BESS) or other power capacities that can respond to grid fluctuations almost instantaneously. To advance BESS development in India, Global Energy Alliance for People and Planet partnered with BSES Rajdhani Private Limited (BRPL), IndiGrid and AmpereHour Energy to set up a utility-scale BESS pilot, a first of its kind, in India. Such collaboration between private, public, and philanthropic organizations is pivotal to creating investment opportunities and raising finance towards the power sector’s fund requirement of INR 33 lakh crores to meet the rising electricity demand.
 

Future Outlook
As India embarks on an ambitious journey to meet its growing energy needs primarily with renewables, we must adopt a multi-dimensional approach. Infrastructural investments and policy reforms must be complemented by deeper systemic changes. The clean energy transition requires more than just technological advancements—it demands behavioral shifts, mindful consumption, widespread public awareness, and a concerted effort to integrate renewable solutions into every facet of our energy use.
 
As we look to the future, research and development, entrepreneurship, and investments in renewable technologies will be the key drivers of sustainable growth. Global collaborations can be leveraged to further strengthen the sector’s resilience and introduce relevant policy reforms. By embracing a holistic strategy that combines sustainable consumption, technological innovation, supportive policies, and international collaboration, the nation can meet its burgeoning power demand and set a precedent for sustainable development worldwide.