Accelerating Energy Transition and Advancing Climate Policy Targets: ESG BROADCAST shares key takeaways.
India has achieved a landmark milestone in its energy transition journey, with non-fossil fuel sources now accounting for over 50% of the country’s total installed electricity generation capacity. As of October 31, 2025, the total installed capacity stood at 505,023 MW. Non-fossil fuel sources, including renewables and nuclear power, contributed 259,423 MW (51.37%). This achievement comprises 250,643 MW from renewable energy sources and 8,780 MW from nuclear energy, surpassing the 245,600 MW contributed by fossil fuels. This success occurs more than five years ahead of the 2030 target set under India’s Nationally Determined Contributions (NDCs) to the Paris Agreement, highlighting the rapid pace of India’s Energy Transition.
This significant shift underscores India’s steadfast commitment to climate action and Sustainable Finance development, while maintaining focus on energy security, affordability, and accessibility. The country remains committed to its long-term roadmap towards achieving net-zero emissions by 2070. To sustain this momentum and realize the ambitious commitment of 500 GW of non-fossil energy capacity by 2030, the Government of India has implemented several comprehensive strategies across the power sector.
Key financial and policy initiatives underpin this aggressive push toward clean energy. The government waived Inter-State Transmission System (ISTS) charges for solar and wind projects commissioned by June 30, 2025, and extended this waiver for Green Hydrogen projects until December 2030 and offshore wind projects until December 2032. Furthermore, to boost investment in clean energy infrastructure, Foreign Direct Investment (FDI) is permitted up to 100% under the automatic route for renewable energy projects.
The Ministry of New & Renewable Energy (MNRE) issued a Bidding Trajectory for the procurement of 50 GW per annum of Renewable Energy (RE) power from FY 2023-24 to FY 2027-28, ensuring a steady supply pipeline. Regulatory measures, such as the notified Renewable Purchase Obligation (RPO) and Renewable Consumption Obligation (RCO) trajectory until 2029-30, further drive the demand side. Notably, the RCO, applicable to designated consumers, includes penalties for non-compliance, ensuring Energy Transition commitments are met across the economy.
Beyond solar and wind, India is diversifying its Energy Transition portfolio through other clean sources. The government launched a dedicated Nuclear Energy Mission with a ₹20,000 crore allocation to develop Small Modular Reactors (SMRs) and promote advanced nuclear technologies, aiming for 100 GW of nuclear capacity by 2047. Additionally, Viability Gap Funding (VGF) schemes have been approved for Battery Energy Storage Systems (BESS), supporting 43.22 GWh of capacity, alongside policies promoting Pumped Storage Projects (PSPs) for crucial grid stability.
Strategic significance lies in India’s early achievement of a major NDC target, which provides credibility and momentum ahead of global climate negotiations. For the corporate sector, the aggressive capacity targets and the penalty structure attached to the RCO create definitive pressure for compliance, driving demand for renewable power purchase agreements. The massive scale of investment in transmission, BESS, and nuclear power also signals vast opportunities for private sector participation and Sustainable Finance mobilization, particularly under the newly launched Green Hydrogen Mission, which targets 5 MMT per annum capacity by 2030.
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