At Power Line Summit 2026, the session on “The Generation Mix We Need” brought together power sector leaders to discuss India’s changing energy mix alongside its rapidly growing electricity demand. The panellists included Ghanshyam Prasad, Chairperson, Central Electricity Authority (CEA); Dr. R.K. Tyagi, Director General, Power Foundation of India; Indra Keshari, Director General, Association of Power Producers; Parveen Nanda, Executive Vice President, Greenko Group; and Naveen Khandelwal, India CEO, Yanara. They discussed the evolving role and potential of renewables, coal, hydro and nuclear power, the need for energy storage, as well as the key challenges and priorities for enabling India’s energy transition. Key takeaways from the session…
From petrostate to electrostate
India’s transition from a petrostate to an electrostate will require electricity to take over a much larger share in the energy mix. The CEA expects electricity demand to nearly double over the next decade. This growth will come from three broad areas: expansion of the existing economy, electrification of non-electric and industrial loads, and new demand from electric vehicles, green molecules and data centres. Hard-to-abate sectors are also expected to increasingly shift towards electricity as they decarbonise.
This increase in electricity demand will also drive demand for green power. Industries such as steel, aluminium, hydrogen and data centres are increasingly looking for cleaner electricity. The pace of this shift could be faster than earlier projections. India has already reached around 55 per cent non-fossil fuel capacity, while total non-fossil fuel capacity has crossed 300 GW. This keeps the 500 GW target for 2030 on track. If new sources of electricity demand grow faster than anticipated, electricity could account for around 50 per cent of the energy mix by 2047, or potentially earlier.
Coal to remain the backbone
Coal is likely to remain an important part of India’s generation mix in the medium term. Electricity demand is expected to increase substantially as per capita consumption rises, creating a need for both renewable energy and firm baseload generation. Renewable capacity alone is unlikely to meet the country’s full electricity requirement over the next 10-15 years without baseload support.
Coal-based generation could therefore remain significant until around 2050, after which nuclear power could increasingly take over the baseload role. Thermal storage could also emerge as an alternative, although its ability to replace conventional baseload generation at scale is still being evaluated.
Firm power will remain particularly important for industries that require uninterrupted supply, where even a shortfall in a single time block can have significant economic implications. This requirement is already reflected in resource planning. The CEA’s resource adequacy studies have guided states in preparing their plans, leading to bids for new thermal capacity. State gencos are also adding coal-based capacity, with around 100 GW of new coal capacity expected to be added by 2032.
Storage gains traction
As renewable penetration increases, storage will become an important part of the generation mix. India’s storage requirement is estimated at around 164 GW by 2035, while the associated energy storage requirement could be four to five times the capacity in MWh.
Thermal flexibility has helped the system absorb higher renewable generation. Thermal plants have been operating at around 55 per cent, down from a normative level of around 85 per cent, with a further target of increasing flexibility towards 40 per cent. However, thermal flexibility has limits. As these limits are reached, the need for energy storage will increase. Nuclear power will continue to provide baseload, while round-the-clock renewable energy, backed by storage, could become another major source of firm power, particularly from around 2040.
Pumped storage is expected to meet a significant part of the requirement. India is targeting around 100 GW of pumped storage capacity by 2035, leaving about 64 GW to be met through other technologies. Battery energy storage systems (BESSs) are expected to contribute to this requirement. However, storage needs to be planned around system requirements rather than simply developed where suitable sites are available. Pumped and battery storage can be located close to the substations where they are needed, potentially within a radius of 30-40 km, allowing their location to be aligned with grid requirements.
Current challenges
The rapid growth of renewables is creating new system-level challenges. During the day, high renewable generation can result in surplus power and curtailment. As capacity increases, this surplus will need to be absorbed through demand-side measures, including green hydrogen, data centres and industrial electrification. At the same time, transmission capacity will need to expand in line with renewable additions to move power from generation centres to demand centres.
Higher renewable penetration also makes grid stability more important. Conventional thermal and hydro plants provide inertia, reactive power, short-circuit strength and black-start capability. Inverter-based solar and wind generation do not inherently provide these characteristics, creating challenges during grid disturbances. The recent Khavda incident highlighted this risk. A fault on a transmission line 400-500 km away from the plant caused an undervoltage condition, leading to a reduction in renewable generation. Around 10,000 MW was lost, resulting in a frequency dip. Similar incidents have occurred in Rajasthan. Such events could become more significant as renewable penetration increases. Therefore, the system will need additional sources of grid support. Synchronous condensers, grid-forming BESSs and pumped storage can provide some of the required capabilities, while existing thermal plants can be retained for their system support functions.
The pace of capacity addition will also depend on the availability of equipment, contractors and skilled manpower. Pumped storage faces constraints as major equipment suppliers are operating near capacity, while the availability of capable civil contractors could also become a bottleneck. At the same time, new areas such as green molecules require specialised technical capabilities. These skills are available in the country, but not yet at the scale that may be required as the sector expands.
Key opportunities
The changing generation mix also creates opportunities for efficient utilisation of existing infrastructure. Transmission planning is moving from a point-to-point approach towards better utilisation of common infrastructure. Earlier, a transmission line was typically planned for a specific generating station. With the changing generation mix, the same network can potentially serve different renewable resources at different times. Solar-hour and non-solar-hour connectivity can support this approach by allowing transmission capacity to be used more efficiently as the generation profile changes.
The same principle can be extended to generation capacity. Notably, CEA studies for 2035-36 have identified complementary demand patterns among discoms, creating scope for the same generation capacity to serve different states at different times, improving utilisation and reducing costs.
Demand can also be developed closer to renewable resources. Rajasthan and Gujarat are expected to add large amounts of renewable capacity, creating an opportunity to develop electricity-intensive industries closer to these resources and reducing the need for long-distance transmission. Storage can further improve network utilisation by reducing curtailment, deferring transmission investments and providing ancillary services. Existing transmission corridors also provide scope for more efficient land use. Different voltage levels could share the same right of way (RoW), instead of building separate corridors. High voltage transmission lines could potentially supply power to nearby villages through suitable conversion technology, reducing the need for separate distribution networks. Standardised central compensation rules could further ease RoW issues by avoiding differences in compensation across states. Further, international interconnections and cross-border links with West Asian and Southeast Asian countries could allow electricity to be exchanged across time zones, improving utilisation and reducing storage needs.
The way forward
The current geopolitical environment has reinforced the need to reduce India’s dependence on imported oil and gas. This need is likely to remain relevant irrespective of changes in global leadership. Therefore, India needs to increase electricity consumption while raising the share of electricity in the energy basket and reducing dependence on imported fuels.
The transition, however, cannot be directly from oil and gas to green energy. Conventional and green sources will need to coexist as the system evolves. The immediate priority should be to reduce import dependence, retain greater control over energy demand and steadily increase the share of green power while maintaining reliability. This will require close attention to transmission, storage, inertia and grid stability. India is already adapting its planning approach through coordination among key agencies.
However, the success of these plans will ultimately depend on implementation. Around $400 billion-$500 billion could be required in the energy sector by 2032, excluding another $100 billion for transmission infrastructure. The availability of adequate finance, equipment, skilled manpower and project execution capacity will ultimately determine the generation mix achieved by 2047.
