India’s non-fossil power capacity is set to reach 70% by 2035-36, driven by rapid solar expansion, but grid constraints, storage gaps and utilisation challenges could shape the energy transition.

India is preparing for one of the most dramatic transformations in its energy sector, with the Central Electricity Authority outlining a future where clean energy dominates installed capacity but fossil fuels continue to underpin supply reliability.

The National Generation Adequacy Plan (2026-27 to 2035-36) presents the most detailed roadmap yet of how India’s electricity system will evolve over the next decade. It projects that India’s installed power capacity will reach 1,121 GW by 2035-36, with 70% (786 GW) coming from non-fossil sources, signalling a structural shift in the country’s energy mix.

At the same time, the report highlights a more complex reality: capacity expansion alone will not define the transition—utilisation, storage, and grid readiness will.

India Power Capacity 2035-36 to Cross 1,100 GW

India’s electricity system is expected to nearly double in scale over the next decade.

According to the report, net electricity generation is projected to rise from around 1,725 billion units today to 3,450 billion units by 2035-36, reflecting the country’s rapid economic growth and electrification push.

Solar energy is set to emerge as the dominant force in India’s power mix. Installed solar capacity alone is expected to exceed 500 GW, accounting for nearly 45% of total capacity, making it the single largest contributor to India’s energy basket.

The detailed breakdown of projected capacity includes:

• 315 GW coal
• 509 GW solar
• 155 GW wind
• 78 GW large hydro
• 20 GW gas
• 22 GW nuclear

These figures underline a system where renewables dominate capacity, but conventional sources remain critical to stability.

India Power Capacity 2035-36 vs Actual Generation Gap

One of the most important insights from the report is the divergence between installed capacity and actual electricity generation.

Despite renewables making up 70% of capacity, coal is expected to remain the backbone of electricity supply. The report projects coal will still account for 51% of total electricity generation (1,819 BU), while solar will contribute around 27% (984 BU).

This gap reflects the intermittent nature of renewable energy and the continued need for firm, dispatchable power.

As the report notes, “the source of firm power at present is predominantly coal-based generation.”

This highlights a key transition challenge: while India can rapidly build renewable capacity, replacing coal’s role in ensuring round-the-clock supply will require deeper systemic changes.

India Power Capacity 2035-36 Faces Grid Bottlenecks

While India’s renewable expansion has been rapid, the system’s ability to absorb this capacity remains constrained.

A major concern flagged in the analysis is the issue of stranded renewable capacity—power that is generated but cannot be transmitted due to grid limitations.

Vibhuti Garg, Director South Asia at the Institute for Energy Economics and Financial Analysis, said: “It is encouraging to see the national generation adequacy plan taking shape. India has made remarkable progress in expanding renewable energy capacity, with clean sources now accounting for more than 50% of installed capacity.

However, the real test lies not in capacity addition, but in how effectively this generation is utilised. Currently, over 37 GW of renewable energy capacity remains stranded—highlighting gaps in planning, integration, and grid readiness.

This underscores the urgent need to shift focus from merely adding capacity to ensuring efficient evacuation and utilisation. Strengthening transmission infrastructure and aligning it with demand centres is critical. As supply and demand increasingly diverge geographically, coordinated planning becomes essential.”

The report also notes that renewable energy generation is becoming more geographically dispersed, increasing the need for robust transmission networks to connect generation hubs with consumption centres.

India Power Capacity 2035-36 Needs Massive Storage Push

Energy storage emerges as the single most critical enabler of India’s clean energy transition.

The plan estimates that India will require 174 GW / 888 GWh of energy storage capacity by 2035-36, including battery storage and pumped hydro.

However, the current pipeline is far from sufficient:

• Only 10.6 GW of battery storage is under construction
• Additional capacity remains in tendering or early planning stages

This gap between projected need and current deployment highlights a major financing and policy challenge.

The report also emphasises that solar-plus-storage systems are emerging as an alternative, particularly for meeting peak demand during non-solar hours, but are yet to fully replace coal-based baseload generation.

India Power Capacity 2035-36 and Energy Security

The timing of the plan is significant, coming amid global energy market disruptions and geopolitical tensions.

Vibhuti Garg noted:“At a time when India remains exposed to global fuel supply disruptions due to geopolitical tensions, accelerating renewable energy integration is not just a climate imperative—it is an economic and energy security necessity.”

The report positions renewable energy not just as a climate solution, but as a strategic tool for reducing dependence on imported fuels.

EVs and Data Centres as New Demand Drivers

The plan also identifies electric vehicles and data centres as emerging sources of electricity demand.

These loads are expected to be geographically concentrated, requiring careful coordination between energy supply and demand planning.

Vibhuti Garg added: “This challenge will intensify with the rise of new demand drivers such as electric vehicles and data centres. These loads are often geographically concentrated, making it even more important to strategically plan clean energy supply in tandem with demand clusters.”

India’s power sector is entering a defining decade.

The National Generation Adequacy Plan makes it clear that the country is on track to build one of the world’s largest clean energy systems. But it also underscores that capacity alone is not enough.

The real transition will depend on:

• Grid infrastructure
• Energy storage deployment
• Demand-side planning
• Policy alignment with emerging technologies

As the report emphasises, the goal is not just to expand capacity, but to ensure a reliable, resilient, and cost-effective power system capable of meeting India’s rapidly growing electricity demand.

India’s electric mobility transition has entered a decisive yet challenging phase. A new analysis from the Institute for Energy Economics and Financial Analysis (IEEFA) reveals a complex narrative: while the country’s EV sector has attracted an impressive Rs 2.23 lakh crore in investments between 2020 and 2025, this represents just 18% of what India must mobilise by 2030 to meet its ambitious clean transport goals.

Unfolding against the backdrop of India’s expanding climate commitments and rising consumer interest in EVs, the report offers a data-rich look into where capital is flowing, where it is missing, and what structural challenges remain hidden beneath headline growth.

A Five-Year Surge in Capital—But Not Enough

Between 2020 and 2025, the EV ecosystem—spanning manufacturing facilities, public subsidies, and charging networks—absorbed Rs 2,23,119 crore in funding. This includes:

• Manufacturing investments supported primarily through internal accruals
• Government subsidies, especially through FAME (Faster Adoption and Manufacturing of Hybrid and Electric Vehicles)
• Charging infrastructure, which remains under-capitalised

Despite this influx, India’s 2030 targets—30% of private cars, 70% of commercial vehicles, 40% of buses, and 80% of two- and three-wheelers going electric—require a total of Rs12.5 lakh crore in investments. That leaves Rs 10.26 lakh crore still unmet.

“While Rs 2.23 lakh crore is a significant capital mobilisation in just five years, it represents only about 18% of the Rs12,50,000 crore required by 2030,” says co-author Subham Shrivastava. “Mobilising the remaining INR10,26,881 crore (USD117.82 billion) by 2030 will require systemic financing reforms.”

The Anatomy of EV Capital

A closer look at the numbers reveals how India’s EV push has been financed so far.

Internal reserves dominate

Manufacturers contributed the bulk of realised investment through their own internal accruals—Rs1,59,701 crore. Debt followed at Rs36,738 crore, while equity accounted for Rs 6,455 crore. But these aggregates obscure important differences across vehicle types.

The three-wheeler segment, driven by a fragmented OEM landscape and low capital-intensity operations, leaned heavily on internal funding and limited debt. Meanwhile, two- and four-wheeler categories showed more diverse capital structures due to the presence of established players and higher investment requirements.

“From 2020–2025, electric three-wheelers attracted the largest share (~78%) of investments among vehicle segments, due to the segment’s maturity and commercial-scale operations alongside its fragmented OEM base,” explains co-author Saurabh Trivedi. “However, recent investment announcements in 2024 and 2025 reveal a pivot towards electric four-wheelers, driven by rising demand for electric cars.”

Charging Infrastructure: A Massive Funding Gap

Perhaps the most critical bottleneck in India’s EV story is the underdeveloped charging ecosystem.

From 2020 to 2025, investments in public charging constituted just 9.6% of the ₹20,600 crore estimated need for 2030. While the country expanded its public chargers from 5,151 to 39,485 over five years, utilisation rates remain low and profitability uncertain.

“Investment in EV charging faces challenges due to limited investor interest, as public EV charging remains an unproven business model, with many charging stations reporting low utilisation rates and high initial costs,” notes co-author Charith Konda.

India’s charger-to-EV ratio continues to lag far behind global benchmarks—a structural weakness that could slow consumer adoption.

The Silent Brake on India’s EV Growth

Beyond infrastructure, the economics of financing EVs present another hurdle.

Commercial EV borrowers currently face interest rates of 15–33%, levels that wipe out the total cost-of-ownership advantage EVs typically offer.

“The binding constraint is not a lack of capital in the system—it is how EV risk is priced,” Shrivastava says. “When lenders remain uncertain about battery performance, residual values, and cash-flow stability, that uncertainty gets reflected in higher interest rates.”

High financing costs disincentivise fleet operators and businesses from transitioning to EVs. As a result, manufacturing capacity cannot scale at the pace needed, creating a demand-supply mismatch.

A New Model for Mobilising Capital

To unlock the remaining ₹10.3 lakh crore needed over the next five years, IEEFA proposes a shift away from subsidy-led growth toward structural risk-sharing.

The solution: a coordinated integrated EV financing platform that consolidates:

• Partial credit guarantees
• Residual value protection for batteries
• Battery-as-a-service (BaaS) arrangements
• Co-lending structures

This platform would be anchored by development finance institutions with relevant expertise—SIDBI for MSMEs and small commercial fleets, and IIFCL for large commercial deployments.

“Manufacturers need predictable demand signals to scale capacity, but demand depends heavily on affordable credit,” Trivedi adds. “An integrated platform that shares risks appropriately across lenders, OEMs, and public institutions can reduce financing costs and unlock commercial-scale deployment.”

The idea is that as EV adoption grows and asset performance data becomes more robust, lenders will recalibrate risk premiums downward. Over time, underwriting practices could standardise, securitisation markets may emerge, and capital could recycle more efficiently.

A Self-Reinforcing Investment Loop

The report outlines a possible virtuous cycle:

• Lower financing costs stimulate EV adoption
• Higher sales volumes create better performance data
• Improved visibility reduces risk perception
• Lower risk draws in more capital
• Manufacturers scale up, benefiting from economies of scale
• Reduced costs further accelerate adoption

This dynamic, according to IEEFA, is essential for unlocking a mature and self-sustaining EV ecosystem.

A Race Between Ambition and Capital

India’s electric transport ambitions are clear and achievable—but only if the investment framework evolves as rapidly as consumer interest and technological capability.

The core message from the data is unmistakable: India is moving in the right direction, but far too slowly. Recognising this, the authors warn that the next five years will determine the trajectory of India’s EV revolution. The country must transition from policy-driven electrification to a financially self-sustaining ecosystem capable of attracting large volumes of private capital at scale.

The question is no longer about policy commitment but about the cost, structure, and flow of capital in an evolving, high-potential sector.

Ammonia, long known as the backbone of global fertiliser production, is increasingly being examined as a potential pillar of the clean energy transition. Energy-dense, carbon-free at the point of use, and already traded globally at scale, ammonia is emerging as a candidate fuel and a carrier of hydrogen. But its climate promise comes with a contradiction: today’s dominant method of producing ammonia carries a heavy carbon footprint.

A new study by researchers from the MIT Energy Initiative (MITEI) attempts to resolve this tension by answering a foundational question for policymakers and industry alike: under what conditions can ammonia truly become a low-carbon energy solution?

A global view of ammonia’s future

In a paper published in Energy and Environmental Science, the researchers present the largest harmonised dataset to date on the economic and environmental impacts of global ammonia supply chains. The analysis spans 63 countries and evaluates multiple production pathways, trade routes, and energy inputs, offering a comprehensive view of how ammonia could be produced, shipped, and used in a decarbonising world.

“This is the most comprehensive work on the global ammonia landscape,” says senior author Guiyan Zang, a research scientist at MITEI. “We developed many of these frameworks at MIT to be able to make better cost-benefit analyses. Hydrogen and ammonia are the only two types of fuel with no carbon at scale. If we want to use fuel to generate power and heat, but not release carbon, hydrogen and ammonia are the only options, and ammonia is easier to transport and lower-cost.”

Why data matters

Until now, assessments of ammonia’s climate potential have been fragmented. Individual studies often focused on single regions, isolated technologies, or only cost or emissions, making global comparisons difficult.

“Before this, there were no harmonized datasets quantifying the impacts of this transition,” says lead author Woojae Shin, a postdoctoral researcher at MITEI. “Everyone is talking about ammonia as a super important hydrogen carrier in the future, and also ammonia can be directly used in power generation or fertilizer and other industrial uses. But we needed this dataset. It’s filling a major knowledge gap.”

To build the database, the team synthesised results from dozens of prior studies and applied common frameworks to calculate full lifecycle emissions and costs. These calculations included feedstock extraction, production, storage, shipping, and import processing, alongside country-specific factors such as electricity prices, natural gas costs, financing conditions, and energy mix.

Comparing production pathways

Today, most ammonia is produced using the Haber–Bosch process powered by fossil fuels, commonly referred to as “grey ammonia.” In 2020, this process accounted for about 1.8 percent of global greenhouse gas emissions. While economically attractive, it is also the most carbon-intensive option.

The study finds that conventional grey ammonia produced via steam methane reforming (SMR) remains the cheapest option in the U.S. context, at around 48 cents per kilogram. However, it also carries the highest emissions, at 2.46 kilograms of CO₂ equivalent per kilogram of ammonia.

Cleaner alternatives offer substantial emissions reductions at higher cost. Pairing SMR with carbon capture and storage cuts emissions by about 61 percent, with a 29 percent cost increase. A full global shift to ammonia produced with conventional methods plus carbon capture could reduce global greenhouse gas emissions by nearly 71 percent, while raising costs by 23.2 percent.

More advanced “blue ammonia” pathways, such as auto-thermal reforming (ATR) with carbon capture, deliver deeper emissions cuts at relatively modest cost increases. One ATR configuration achieved emissions of 0.75 kilograms of CO₂ equivalent per kilogram of ammonia, at roughly 10 percent higher cost than conventional SMR.

At the far end of the spectrum, “green ammonia” produced using renewable electricity can reduce emissions by as much as 99.7 percent, but at a significantly higher cost—around 46 percent more than today’s baseline. Ammonia produced using nuclear electricity showed near-zero emissions in the analysis.

Geography matters

The study also reveals that the viability of low-carbon ammonia depends heavily on geography. Countries with abundant, low-cost natural gas are better positioned to produce blue ammonia competitively, while regions with cheap renewable electricity are more favourable for green ammonia.

China emerged as a potential future supplier of green ammonia to multiple regions, while parts of the Middle East showed strong competitiveness in low-carbon ammonia production. In contrast, ammonia produced using carbon-intensive grid electricity was often both more expensive and more polluting than conventional methods.

From research to policy

Interest in low-carbon ammonia is no longer theoretical. Countries such as Japan and South Korea have incorporated ammonia into national energy strategies, including pilot projects using ammonia for power generation and financial incentives tied to verified emissions reductions.

“Ammonia researchers, producers, as well as government officials require this data to understand the impact of different technologies and global supply corridors,” Shin says.

Zang adds that the dataset is designed not just as an academic exercise, but as a decision-making tool. “We collaborate with companies, and they need to know the full costs and lifecycle emissions associated with different options. Governments can also use this to compare options and set future policies. Any country producing ammonia needs to know which countries they can deliver to economically.”

As global demand for low-carbon fuels accelerates toward mid-century, the study suggests that ammonia’s role will depend less on ambition alone, and more on informed choices—grounded in data—about how and where it is produced.