Overcoming Challenges in India's Energy Transition • Disaster.Shiksha

India stands at a critical juncture in its energy journey. The country has set ambitious targets-achieving 500 GW of non-fossil fuel capacity by 2030 and net-zero emissions by 2070. While progress has been remarkable, with renewable energy capacity reaching 209.44 GW as of December 2024, accounting for 45.3% of total installed capacity, several complex challenges threaten to slow the momentum. Understanding these barriers is essential for crafting effective solutions that balance climate goals with economic realities.

The intermittency challenge in solar and wind power
Energy storage: the missing link
Fossil fuel dependence beyond the power sector
Hard-to-abate industrial sectors
Transport transformation
Land use conflicts and resource constraints
Lessons from Pavagada
Indigenous rights and environmental concerns
Ensuring a just transition for coal workers
Beyond retraining programmes
Building a framework for transition
Charting the path forward

The intermittency challenge in solar and wind power

Solar and wind energy are inherently variable-the sun doesn’t always shine, and the wind doesn’t always blow. This intermittent nature poses significant grid integration challenges that India must address as it scales up renewable capacity. While renewable sources now constitute a substantial portion of installed capacity, their share in actual electricity generation remains lower due to this variability.

The problem becomes particularly acute during evening peak hours when solar generation drops while demand surges. India’s grid infrastructure, originally designed for predictable fossil fuel-based generation, struggles to accommodate the fluctuating output from renewables. This creates frequency and voltage instability issues that can lead to blackouts during adverse weather conditions.

Energy storage: the missing link

The solution lies in scaling up energy storage, but progress has been slow. As of March 2024, India had only 0.2 GWh of battery energy storage capacity installed-a fraction of the 236 GWh needed to integrate planned renewable energy under the National Electricity Plan 2023. Battery energy storage systems (BESS), pumped storage plants, and hybrid projects require substantial capital investment that many developers struggle to mobilise.

The government has recognized this gap and prioritized storage solutions. Approximately 30.93 GW of hybrid and round-the-clock projects have been tendered, combining solar, wind, and storage to provide consistent power. However, regulatory hurdles persist-the Central Electricity Regulatory Commission recently rejected tariff approval for a major standalone BESS project, highlighting the challenges in making these projects financially viable.

Fossil fuel dependence beyond the power sector

While much attention focuses on decarbonising electricity generation, India’s fossil fuel dependence extends far beyond power plants. The transport sector accounts for around 14% of total emissions and is projected to see emissions grow by 65% by 2030 and 197% by 2050 at current trajectories. Currently, roughly 70% of India’s electricity comes from coal, and decarbonising this sector alone won’t achieve net-zero targets.

Hard-to-abate industrial sectors

Steel, cement, and chemicals present particularly difficult decarbonisation challenges. In 2019, energy use accounted for 73% of industrial sector emissions, with process-related emissions from chemical transformations contributing the remaining 27%. These process emissions cannot be eliminated simply by switching to renewable electricity-they require breakthrough technologies like green hydrogen and carbon capture.

The scale of the challenge is immense. India needs approximately $467 billion in climate finance by 2030 to decarbonise its high-emitting sectors, translating to roughly $54 billion annually or 1.3% of GDP. Among these sectors, steel and cement are the most expensive to decarbonise due to high process emissions and capital-intensive green technology requirements.

Transport transformation

Electric vehicle adoption in India has been slower than hoped, partly due to price sensitivity in the market and inadequate charging infrastructure. Heavy-duty vehicles, aviation, and shipping present even greater challenges, as electrification isn’t always feasible. Alternative fuels like green hydrogen and biofuels will play crucial roles, but scaling these solutions requires massive investment in production facilities and distribution networks.

Land use conflicts and resource constraints

Scaling up solar and wind capacity demands vast tracts of land, creating inevitable tensions with agriculture, pastoralism, and local communities. Currently, 25 land disputes in India are impacting over 30,000 people and millions of dollars in renewable investment. These conflicts often pit climate goals against food security and traditional livelihoods.

Lessons from Pavagada

The Pavagada Solar Park in Karnataka illustrates both the promise and pitfalls of large-scale solar development. The project leased 13,000 acres from about 2,300 agricultural landowners to develop a 2,000 MW solar park on drought-prone land. While the land-leasing model provided stable income for landowners, the benefits were not evenly distributed-larger landowners profited while landless agricultural workers lost their livelihoods when farming ceased on leased land.

About 30% of families surveyed in villages near the Pavagada park do not own land but depend on land-based livelihoods as agricultural labourers or pastoralists. The solar park’s installation reduced cultivated land by around 90%, severely limiting livelihood options for these vulnerable groups.

Indigenous rights and environmental concerns

In Assam’s Karbi Anglong district, tribal communities have accused the state government of undermining their free, prior and informed consent for a proposed 1,000 MW solar park. The project would require diverting approximately 2,400 hectares of tribal land, raising concerns about constitutional protections for indigenous communities under the Sixth Schedule.

These conflicts highlight a disturbing pattern that researchers call “green grabbing”-large-scale land acquisitions displacing smallholders and privatising public lands to meet renewable energy targets. Without careful planning, India risks simply transferring the social costs of energy from coal-mining regions to areas hosting renewable projects.

Ensuring a just transition for coal workers

Perhaps no challenge is more politically sensitive than managing the transition for workers and communities dependent on coal. Approximately 300,000 permanent and 500,000 contract workers are currently employed in India’s coal industry, while over 1.4 million people depend on the sector for their livelihoods. Coal also anchors local economies in over 50 districts across six states, with Coal India Limited paying nearly $8 billion annually in taxes and royalties.

Beyond retraining programmes

A just transition requires much more than simply retraining coal workers for jobs in renewables. When a mine closes, it upends an entire local economic ecosystem-local markets, small businesses, and government revenues all decline. State-owned companies like Coal India often run schools, hospitals, and water systems that struggle for funds once operations stop.

Making matters more complex, labour dependency on coal in India spans generations, with communities relying on the industry across a range of occupations from formal mine work to informal coal-related activities. The coal ecosystem also replicates social hierarchies of caste and gender, with Dalits and women often remaining at the bottom of precarious labour relations across generations.

Building a framework for transition

India urgently needs a comprehensive national framework for just transition. The NITI Aayog has formed a committee to outline such a framework, but concrete implementation remains limited. Key elements must include regional economic diversification plans, a dedicated transition fund potentially supported by coal cess revenues, better coordination between central and state agencies, and meaningful involvement of affected communities in planning.

Encouragingly, research from Jharkhand suggests that coal jobs may be less popular than assumed-survey respondents were significantly more likely to choose alternative employment over coal jobs when offered comparable wages. This indicates that with proper support for retraining and relocation, workers may embrace new opportunities in growing sectors.

Charting the path forward

India’s energy transition is not just an environmental imperative but an economic transformation of unprecedented scale. Success requires addressing intermittency through aggressive storage deployment, decarbonising hard-to-abate sectors through green hydrogen and CCUS technologies, resolving land conflicts through inclusive planning and agrivoltaic approaches, and ensuring coal-dependent communities are not left behind.

The financing challenge is substantial but not insurmountable. A combination of public funding, private investment, and international climate finance can mobilise the required resources. More importantly, getting the policy frameworks right-stable regulations, clear tariffs, community engagement-will determine whether India’s energy transition delivers on its promise of clean, affordable energy for all.

What do you think? How can India balance the urgency of climate action with the need to protect livelihoods of communities dependent on fossil fuels? What role should international climate finance play in supporting India’s energy transition?

References

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Table of Contents

The intermittency challenge in solar and wind power 🔗

Energy storage: the missing link 🔗

Fossil fuel dependence beyond the power sector 🔗

Hard-to-abate industrial sectors 🔗

Transport transformation 🔗

Land use conflicts and resource constraints 🔗

Lessons from Pavagada 🔗

Indigenous rights and environmental concerns 🔗

Ensuring a just transition for coal workers 🔗

Beyond retraining programmes 🔗

Building a framework for transition 🔗

Charting the path forward 🔗