Renewables Newsletter - COE Chakra

Renewable Energy – Round the Clock: Moving from Capability to Reliability

India’s Clean Energy Inflection Point

India's expanding economy is significantly increasing the nation's energy requirements. As per the National Electricity Plan (NEP), total demand is projected to surge from 521 GW in 2024 to 874 GW by 2032 — a growth trajectory that must be carefully managed alongside the country's commitment to achieving net-zero emissions by 2070.

India has successfully scaled its renewable energy capacity over the past decade. Driven by strong policy and execution, we are on track to meet our target of 500 GW of non-fossil capacity by 2030.

However, we are entering a more complex phase. As per NITI Aayog, renewables make up roughly 50% of our installed power capacity, yet they meet only 28% of our actual energy demand. Coal still provides 69%. With electricity demand rising rapidly due to the electrification of transport and industries, we are at a critical inflection point. To achieve true energy security, we must bridge this gap.

The Core Challenge: Intermittency and Grid Reliability

The first wave of growth was about adding capacity; the next is about reliability.

Solar and wind power are intermittent — they fluctuate with the weather and time of day. The intermittent nature of wind and solar places strain on the power grid. To ensure energy security, reliance on standalone renewable plants is not sufficient; there is a need for solutions that can deliver stable and reliable power comparable to coal.

The Near-Term Solution: Round-the-Clock (RTC) Renewables

Round-the-Clock (RTC) renewable energy is presently the most practical near-term solution. Instead of depending on a single source, RTC projects integrate solar (for daytime generation) and wind (for nights and monsoon periods), along with battery storage, to ensure a stable and consistent power supply.

This model is gaining traction due to two main enablers:

• Favorable Economics: Declining costs of battery storage and solar modules are improving project viability.
• Regulatory Support: Standardised government bidding frameworks have enhanced transparency and bankability.

Going forward, RTC adoption is expected to scale up significantly, not only among state utilities but also across large commercial and industrial consumers seeking dependable green power.

Medium to Long-Term Needs: Deep Storage & Grid Upgrades

While RTC handles daily fluctuations, complete energy security requires longer-term storage solutions.

• Pumped Storage Projects (PSPs): Essential for storing energy over 6–20 hours to manage daily peak demand. As per CEA estimates, India has an estimated potential of 266 GW, though such projects involve high upfront capital costs and long gestation periods.
• Emerging Technology: For longer, seasonal storage, we will need to invest in Green Hydrogen and advanced battery technologies.
• Grid Modernization: Upgrading the national transmission grid is mandatory to handle the shift from stable fossil fuels to variable renewable sources.

Replacement Cost: Pricing

The real benchmark for round-the-clock renewable power is its delivered cost in practice. By comparison, electricity from a new coal-based power plant currently costs around ₹5.4 to ₹6.30 per unit (kWh).

When solar generation is paired with battery storage to supply near-continuous power, the resulting cost of electricity can often be lower than coal. The table below illustrates how costs vary based on the level of assured availability required and the type of backup used to cover periods when solar output is unavailable, and battery reserves are low:

Source: India energy and climate centre UC Berkeley Goldman School of Public Policy Report May 2025

Case Study: Delhi’s BRPL Load Profile

A detailed simulation for BSES Rajdhani Power Ltd (BRPL) shows how a solar + storage system could supply Delhi’s entire daily demand:

Source: TERI Solar Plus Storage Cost Analysis of Round-the-Clock Supply for a Typical Day Report

Both configurations are cheaper than new coal generation (₹5.4-₹6.30/kWh) and capable of providing 100% clean, reliable power across the day.

Securing the Supply Chain: Domestic Manufacturing

India is focused on developing its supply chain for equipment manufacturing.

As highlighted in Tata Power’s report, “The Path to 2035: How India Will Build a Resilient Solar Economy,” the focus in renewable energy is shifting from deployment-led growth to supply chain localization. The ₹24,000 crore Production-Linked Incentive (PLI) scheme is an effort to incentivise domestic manufacturing across the value chain, including modules, cells, wafers, and ingots.

To protect the industry from external competition, the Approved List of Models and Manufacturers (ALMM) mandates that government-backed projects source modules from pre-approved domestic manufacturers. The policy:

• Ensures consistent demand for local production
• Protects against low-cost imports
• Maintains quality and reliability standards

Together, these initiatives are strengthening India’s position not just as a large renewable energy market, but as an integrated manufacturing hub supporting long-term energy security.

Following is the current progress and targets for India's solar manufacturing supply chain:

India has scaled up its module production significantly. As of early 2026, domestic module manufacturing capacity is ~172 GW (ALMM-I) — higher than the current annual domestic demand.

Cell capacity is currently ~26 GW. To drive further expansion, the government has mandated the use of domestic solar cells for approved projects starting in 2026.

Wafers and Ingots: This upstream segment is currently underdeveloped, with only about 2 GW of active manufacturing capacity. To reduce import dependence, the Ministry of New and Renewable Energy (MNRE) announced that clean energy projects must use locally manufactured solar ingots and wafers starting from June 2028.

The PLI has been announced in Tranches I and II and awarded for ~48,337 MW of solar PV manufacturing capacity across the value chain. However, as of February 2026, no funds have been disbursed, as the scheme's incentives are only paid after a project completes one full year of successful operations. Since the awarded projects have not reached this one-year post-commissioning milestone, the first payouts will likely happen in late 2026 or beyond.

Additionally, upstream manufacturing, specifically for polysilicon and wafers, is moving at a slower pace than expected. This is due to the technical complexity involved in the manufacturing process, lack of trained manpower, and dependence on imported technology.

Despite these hurdles, companies are actively building capacity to meet the targets. For instance, Tata Power operates a 4.3 GW solar cell and module plant in Tamil Nadu, which successfully produced 2.9 GW of modules and 2.8 GW of cells in a recent nine-month period. Other major manufacturers have announced and are working towards setting up 20 GW ingot and wafer lines to meet the 2028 mandate.

By making this equipment locally, India protects itself from global supply chain shocks. Securing a domestic supply chain will ultimately help optimize the Levelized Cost of Energy (LCOE) and the Levelized Cost of Storage (LCOS), ensuring that the transition to round-the-clock renewables is self-reliant and financially sustainable.

The Catalyst: The Role of the Banking Sector

The solutions outlined — ranging from RTC and pumped storage to grid modernization and localized manufacturing — are highly capital-intensive and technologically complex.

This places the banking sector at the center of India’s energy transition. Prudent capital allocation and sharp risk assessment will dictate the pace of this growth. Platforms like CHAKRA will be essential to bring together developers, policymakers, and financial institutions to strategically deploy capital, mitigate risks, and successfully fund this critical infrastructure.