India’s Renewable Milestone: Capacity Overtakes Coal, But Generation Reality Persists
India has reached two significant milestones in its power sector: achieving its 50% non-fossil capacity target five years ahead of schedule and surpassing coal capacity with installed renewable energy capacity for the first time. In this edition of the India Energy and Climate Pulse, we examine what these achievements mean for India’s energy transition and why capacity growth alone does not necessarily translate into lower emissions or reduced reliance on coal generation.
By: Robbie Andrew (CICERO), Shivika Mittal (CICERO)
India’s non-fossil capacity growth outruns targets
India has consistently strengthened its climate commitments under the Paris Agreement, rapidly surpassing earlier non-fossil capacity targets ahead of schedule.
From India’s first Intended Nationally Determined Contribution (NDC) under the Paris Agreement (PA) submitted in 2015 to its current iteration submitted in 2026, three measureable commitments have been made: (i) reduction in the emissions intensity of GDP, (ii) creation of a forest sink, and (iii) increase in the non-fossil share of installed power generation capacity. India originally set a target of 40% non-fossil in capacity by 2030, but achieved this already in 2021. It then increased the target to 50% by 2030, and achieved that already in 2025. In its most recent NDC the target has been increased again to 60% by 2035. Given this progress, India appears well positioned to achieve, and potentially exceed, its 2035 target ahead of schedule. Separately, India has a target to reach 500 GW of non-fossil power generation capacity installed by 2030, first announced in 2019.
Whether India’s targets are ‘ambitious’ is difficult to prove categorically. While the Central Electricity Authority’s modelling has shown that the lowest-cost pathway to providing sufficient growth in electricity generation includes large growth in renewables, “lowest-cost” is not entirely synonymous with “most feasible”. Facilitation is critical: land availability, changes to electricity market design, balancing policies to reduce reliance on other countries, transmission capacity, the power storage market, etc. are all factors that must be addressed for the lowest-cost pathway to be feasible.
Renewables surpass coal capacity, generation still lags
A historic surge in renewable capacity marks rapid progress for India, yet this milestone masks a much more gradual shift away from fossil fuels in actual electricity generation.
At the end of May 2026, installed, grid-connected renewable capacity (excluding large hydro) reached 230.8 GW, surpassing coal and lignite capacity of 230.1 GW for the first time ever. This reflects the rapid growth of renewables – especially over the past decade – compared with the slower expansion of coal capacity after a surge during the 2010s.
However, comparing based on ‘capacity’ measured in gigawatts (GW) overlooks the fact that renewables on average generate at only 20% of their rated capacity while coal-fired power stations on average in India operate at over 60% of their rated capacity. The reason renewables have such low utilisation rates is largely a result of their ‘variable’ nature: for example, the rated capacity for solar PV indicates the power that can be generated when conditions are perfect, and such conditions are obviously not met at night, so solar panels can never operate at capacity for more than a brief period of the day in clear-sky conditions. A second reason for low utilisation is curtailment, when there is insufficient demand or a lack of transmission capacity to transport power to the grid.
While targets based on installed capacity are easy to monitor, the real transition that should be tracked is from fossil generation to non-fossil generation, and targets based on generation rather than capacity would be better suited.
Coal still dominates electricity generation despite renewable capacity growth
Despite rapid growth in renewable capacity, coal continues to dominate India’s electricity generation, underscoring the gap between installed capacity and actual power generation.
Because of the simple inability of variable renewables to generate at 100% capacity for any extended period, the fact that renewables capacity now matches that of coal does not carry over into actual power generation. Coal still dominates electricity production in India, accounting for about 70% of total generation. This share varies through the year because of the seasonal nature of generation from hydropower, wind, and solar, all driven by the monsoon season bringing more rain, more wind, and more overcast skies. A future day when half of power demand is met by variable renewables such as solar and wind is still some time off.
Daily power patterns shift with rising solar
Coal continues to anchor India’s power system, but rising solar output is reshaping daily generation patterns.
Coal meets the vast bulk of power demand throughout the day, remaining relatively stable and forming the backbone of the system, but solar now contributes a surge of generation during the middle hours of the day, peaking around noon before dropping sharply toward the evening. Wind and hydro contribute more modest but steady shares, with hydro and storage helping to balance demand during peak evening hours when solar output disappears. Gas and nuclear serve as balancing sources but have only a small contribution to overall supply. Storage – both pumped hydro and batteries – are starting to have an effect, and in fact these are now equivalent to about half of gas generation in some periods. However, much more storage will be required as the amount of solar power in particular increases over time. Storage allows excess generation from solar to be spread throughout the day. While it would be very useful to monitor sub-daily charging of batteries, Grid-India doesn’t yet include this in its Power Supply Position reports.
Coming up in our next edition
India’s current power-sector commitments, including its Nationally Determined Contribution (NDC) target, focus primarily on expanding non-fossil electricity capacity. While these targets have successfully driven investment in renewable energy, capacity-based metrics serve as poor indicators of mitigation progress in this sector. India is introducing a carbon market, but in the first instance the power sector is excluded, unlike many established Emissions Trading Systems (ETS) where the sector is a central component due to its large share of emissions and range of available mitigation options. This choice reflects India’s phased approach that balances decarbonization with energy access, affordability, and ongoing sectoral reforms. India already promotes low-carbon electricity through instruments such as Renewable Purchase Obligations (RPOs), renewable energy auctions, and Renewable Energy Certificates (RECs). These instruments reduce the immediate need for carbon pricing in the sector. However, as the carbon market evolves, the inclusion of the power sector remains a likely option to expand coverage and strengthen decarbonization incentives. In our next issue of the Pulse, we will turn our focus onto India’s new carbon market, exploring it in greater detail.
