India has ambitions to reach 500 GW of renewable energy capacity by 2030, with a strong dominance of the sun. Although the 200 GW milestone was reached in 2024, progress will have to accelerate dramatically to reach this goal. This challenge raises major questions about financing, infrastructure development, and the reforms needed to support this large-scale transition.
Structural challenges and uncertainties in the Indian energy landscape
The development of renewable energies in India is hampered by major structural challenges that compromise any rapid transformation of the sector:
- land acquisition difficulties;
- saturation of the electrical network;
- regulatory uncertainties making it difficult to obtain permits;
- limited access to finance, high interest rates;
- increased perception of risk by investors.
In an attempt to alleviate these problems, the Indian government has increased the number of tenders, with 73 GW of renewable energy projects announced for 2024. However, these initiatives are struggling to succeed: 8.5 GW of projects have been under-subscribed due to rigid contractual structures and delays in interstate transmission, further slowing their implementation.
At the same time, the controversy surrounding the Adani Group, a key player in the sector, has increased market uncertainty. Accused of financial fraud and stock market manipulation by the Hindenburg Research Report, the conglomerate saw the confidence of foreign investors crumble, leading to a decrease in capital flows and a climate of additional instability.
Beyond the scandals, the execution of projects remains problematic: more than 40 GW of electricity sales agreements have still not been signed, and 38.3 GW of projects have been cancelled between 2020 and 2024 due to shortcomings in tender design, geographic constraints, technical challenges, and delays. Despite some ambitious initiatives, such asThe $5.63 billion investment by Tata Power Renewable Energy Ltd to develop 7 GW of green energy projects in Andhra Pradesh, these efforts remain insufficient in the face of the structural challenges of the sector.
The need for innovative financial engineering
In this context, reaching the objective of 500 GW of installed renewable energy capacity is becoming more and more difficult. The mobilization of investments remains a central issue, with a need estimated at more than $300 billion by 2032 under the India's 2032 financing program. However, in 2024, India invested only $13 billion. To reach the goal, investments should grow by 20% per year.
Increasing investments, especially from foreign capital, is therefore essential, but protectionist policies and high interest rates pose difficulties. India must therefore adopt an innovative financial approach:
- Globally, investors are increasingly preferring green bonds and risk-sharing mechanisms, solutions already explored by institutions such as the World Bank.
- In particular, India could draw inspiration from models valued in Europe and the United States, where financial incentives and Contracts for difference (CfD) have stabilized the renewable energy market.
Conclusion
To date, the goal of 500 GW of renewable energy by 2030 remains highly uncertain. The accumulation of delays, regulatory and financial obstacles, as well as market instability undermine this ambition and risk lasting damage to investor confidence. To hope to reverse this trend, a comprehensive approach is needed, combining structural reforms, innovative financing solutions and a stable regulatory framework.
If India succeeds in overcoming these challenges, it will not only achieve its goals, but could position itself as a leader in the global energy transition. Conversely, a prolonged status quo would threaten not only its climate commitments, but also its attractiveness for investors, jeopardizing its role in the 21st century energy revolution.