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India's vigor concern is acceptable to scope a grounds $170 cardinal successful 2026, driven by accelerated enlargement successful star powerfulness and lipid refining arsenic the state accelerates efforts to conscionable rising vigor request and fortify infrastructure for its cleanable vigor transition.
The International Energy Agency (IEA), successful its World Energy Investment 2026 report, said vigor concern successful India has grown astatine an mean yearly complaint of 11% implicit the past 5 years, with star photovoltaic (PV) concern rising 25% annually and lipid refining concern increasing 23% implicit the aforesaid period. Together, the 2 sectors accounted for astir a 4th of the summation successful wide vigor spending.
The surge successful refining concern has enactment India connected way to grow refining capableness by astir 15% by 2030, adjacent arsenic the state remains heavy babelike connected imported crude oil, the study said.
Upstream lipid and state investment, however, has contracted by an mean of 7% annually since 2020, prompting the authorities to present a caller licensing regime, aimed astatine attracting caller superior into exploration and production.
According to IEA, India is the second-largest capitalist successful ember supply, and its investments person tripled implicit the past decade.
Coal continues to predominate India's vigor mix, underpinning some powerfulness procreation and concern demand. Investment successful ember proviso is expected to scope $13 cardinal successful 2026, arsenic India seeks to rise home ember accumulation to 1.5 cardinal tonnes by 2030 from astir 1 cardinal tonnes currently.
Power assemblage concern accounts for astir fractional of India's full vigor spending. In 2025, India achieved its Nationally Determined Contribution (NDC) people of sourcing 50% of installed powerfulness procreation capableness from non-fossil substance sources — 5 years up of docket — supported by a crisp summation successful star concern that reached $20 billion.
Investment successful coal-fired procreation has meantime fallen to astir 40% of its 2010 peak. India present invests 3 dollars successful renewables and atomic powerfulness for each dollar spent connected fossil fuel-based generation, up from 1.5 dollars 5 years ago.
The state is besides ramping up spending connected grid modernisation, artillery retention and dispatchable powerfulness procreation to enactment rising renewable penetration. Solar and upwind present relationship for much than fractional of India's installed procreation capacity, expanding the request for transmission upgrades and retention systems to negociate intermittency and debar renewable curtailment.
Investments successful hydropower and atomic vigor person tripled since 2020. India is targeting 100 GW of atomic capableness by 2047, up from 9 GW currently, aft introducing reforms successful 2025, allowing backstage companies with up to 49% overseas ownership to physique and run reactors and tiny modular reactors (SMRs).
Energy retention strategy (ESS) tenders crossed 100 GWh successful 2025, much than treble the erstwhile twelvemonth and implicit 10 times 2023 levels, portion artillery retention tariffs dropped sharply arsenic task standard increased.
Transmission and organisation concern is expected to scope $26 cardinal successful 2026 aft expanding astatine an yearly complaint of 15% implicit the past 5 years. The government's Green Energy Corridor (GEC) programme, aimed astatine integrating renewable vigor into nationalist and authorities grids, has already added much than 3,000 km of transmission lines, with further phases nether development.
End-use vigor concern led by ratio spending, which has risen much than 10% annually to $18 billion. Electric conveyance investment, portion increasing rapidly, remains comparatively tiny astatine $2 cardinal and accounts for astir 5% of full conveyance sales, the study said.
"Energy concern successful India has grown 11% annually connected mean successful the past 5 years and is acceptable to scope $170 cardinal successful 2026. Investment successful star PV grew annually by 25% successful this period, and lipid refining by 23%. Together, these 2 sectors contributed to one-fourth of India's vigor concern growth," it said.
Sharp rises successful star PV and upwind investments person taken their stock to implicit 50% of installed capableness successful India.
"The summation successful adaptable renewable energy from these 2 sources has necessitated powerfulness assemblage infrastructure upgrades to debar curtailment. These see grid upgrades to evacuate energy from renewable sources; vigor retention capableness additions; and the improvement of dispatchable energy procreation successful enactment with India's ambition of installing 500 GW of non-fossil-fuel capableness by 2030," the study said.
Between 2020 and 2025, investments successful hydropower and atomic energy, some non-fossil dispatchable sources, person tripled, arsenic caller projects are being built.
India aims to instal 100 GW of atomic capableness by 2047, up from 9 GW today. To further beforehand investment, the authorities introduced a caller betterment successful 2025 to extremity the authorities monopoly of atomic power, allowing backstage companies with up to 49% overseas equity to physique and run reactors and tiny modular reactors (SMRs).
For vigor storage, India has been promoting capableness additions done some axenic vigor retention systems (ESS) and wind-solar hybrid (WSH) projects. It has besides established a viability-gap backing programme supported by the Power System Development Fund (PSDF) to assemblage successful investment, providing fiscal assistance to standard up artillery retention successful the country, arsenic agelong arsenic it meets the 20% section contented requirement.
In 2025, ESS task tenders changeable up to implicit 100 GWh, with artillery tenders making up 60 GWh. This is much than treble the erstwhile year's tenders, and much than 10 times the 2023 level. WSH tenders person besides surged, accounting for much than fractional of the 63 GW of capableness awarded successful 2024.
However, challenges persist contempt this success, including under-subscription and cancellations of immoderate tendered capacity.
As artillery retention projects scaled up, the discovered tariff of retention fell from $14,700/MW/month successful 2023 to little than $3000/MW/month successful 2025. In summation to artillery storage, a caller roadmap by the Central Electricity Authority (CEA) targets 100 GW of pumped retention by 2035-36.
Finally, transmission and organisation concern is acceptable to scope $26 cardinal successful 2026 aft increasing 15% annually for the erstwhile 5 years. Supportive policies person been introduced to beforehand grid investment.
For instance, the Green Energy Corridor (GEC) task was conceived to inject ample volumes of star and upwind powerfulness into nationalist and authorities grids. The archetypal signifier is complete, with implicit 3,000 km of caller lines funded done 30% equity and 70% indebtedness from multilateral improvement banks (MDBs) and commercialized loans. Work connected consequent phases of this task is present nether way.
