IEW 2025: Indian energy transition targets more renewables, low-emission coal: PM adviser

India's long-term energy transition strategy is largely focused on increasing renewable power in the grid and greater adoption of low-emission coal, Tarun Kapoor, adviser to Prime Minister Narendra Modi, told S&P Global Commodity Insights on Feb. 13.

India has a target of 500 GW of renewable power capacity by 2030, as against 209 GW including hydro power currently, government data shows. Power generation, however, is dominated by coal-based power, with renewables comprising 21% of the generation mix.

"Our energy transition is moving at two levels. One is putting more and more renewables into the grid, keeping economics in view because we don't want to burden our DISCOMs," Kapoor said, speaking on the sidelines of India Energy Week 2025.

"The second level is looking at coal additions but with less emissions, some better controls, coal gasification and whatever better technologies there could be, so that coal-based energy is also cleaner," he added.

Speaking about bottlenecks for renewable capacity additions, Kapoor said that, in the recent past, several tenders did not get off the ground as DISCOMs did not sign Power Purchase Agreements owing to low demand perception, or financial stress or procedural issues.

However, he said that this may be changing, because demand for electricity has started to grow at almost 10% year-on-year, fueled by economic growth post the pandemic, and a drop in renewable power prices.

"I hope DISCOMs will come forward and sign PPAs. So, if that happens, then installations and renewable energy generation can happen very fast," Kapoor said.

"Renewables have become much, much cheaper. Now, round-the-clock power, a combination of solar, wind and battery storage is, say, between Rupee 5-Rupee 6 [per unit], almost close to thermal power."

Meanwhile, the grid can take up to 40% renewable power but to go beyond that, better storage options and grid management would be needed, which is a challenge, Kapoor said.

"Plans have to be a little different, which we are also working on," he said. "We have to speed up a bit, that we understand. We have to do more than what we were doing earlier."

Hydrogen adoption

For the wider energy transition, more renewable power is crucial for India's target of 5 million mt of renewable hydrogen by 2030 as stated in the National Green Hydrogen Mission, released in 2023.

"Energy transition is largely based on what discoveries happen world over and how the technologies behave," Kapoor said. "So while we are looking at green hydrogen, [it] may take a while because price internationally has not come down as fast as probably the world thought it would."

If the price of renewable hydrogen drops to below $2/kg, it would become a mass-scale product, but if it doesn't, then it would have niche uses, he said.

Renewable hydrogen demand is expected to come from global markets and domestic fertilizer and refining plants, while its requirement in transport and wider industry depend on how the price goes down, according to Kapoor, a former secretary in India's Ministry of Petroleum and Natural Gas.

"Some amount of subsidization or mandates or some push will have to be there, which means that even if it is expensive, some hydrogen will have to be bought so the market develops," he said.

"Refineries are mostly doing on their own [renewable hydrogen projects] because they constantly do tendering...plus they want the hydrogen manufacturing to happen in the refinery or close to the refinery because they need continuous supply," Kapoor said.

Developers such as ACME, AM Green and Avaada are working on renewable hydrogen/ammonia projects in in export-oriented hubs in the states of Odisha, Andhra Pradesh, Tamil Nadu, Kerala and Gujarat.

Project design

According to Kapoor, the Indian renewable hydrogen projects under development have their own permutations, combinations, and designs, which point to varied cost projections for renewable hydrogen.

"Each developer is telling a different story right now," he said. For example, "if you take some solar and some wind and do very minimal storage, and have power at, say, under Rupee 3 [per unit], you get x price of renewable hydrogen," he said.

"But if you are producing hydrogen only 40% of the time in a day and in the rest of the time, either you produce gray hydrogen or you don't produce anything, you get another cost of renewable hydrogen," he said.

Other factors such as the definition of renewable hydrogen, cost of electrolyzers, government's subsidy and concessions will play a role in determining the cost of renewable hydrogen, he added.

"Internationally now, with banking, it's not called green [hydrogen]. So those definitions are also evolving," he said.

Platts, part of Commodity Insights, assessed South Australia hydrogen produced via alkaline electrolysis (including capital expenditures) at $1.76/kg on Feb. 13, down 59% from a month ago. Platts assessed Japan hydrogen produced via alkaline electrolysis (including capex) at $5.70/kg Feb. 13, up 5% from a month ago.