After Reading This Article You Can Solve This UPSC Mains Model Questions:
“India’s updated Nationally Determined Contributions (NDCs) for 2035 highlight a gap between installed renewable capacity and actual energy generation.” Examine the reasons for this gap and suggest measures to address it. 15 Marks (GS-3, Economy)
Introduction
- India recently submitted its updated Nationally Determined Contributions (NDCs) under the Paris Agreement, marking a measured enhancement of its climate ambition for the 2031-2035 period.
- While the revised targets strengthen commitments on non-fossil capacity, emission intensity reduction, and carbon sinks, concerns remain regarding the persistent gap between installed capacity and actual clean energy generation, primarily due to inadequate battery storage and grid limitations.
Global Climate Framework and India’s Position
- Paris Agreement: The Paris Agreement, adopted at COP21 in 2015 and effective from 2016, seeks to limit global temperature rise to well below 2°C above pre-industrial levels, with efforts to restrict it to 1.5°C.
- It adopts a bottom-up approach through Nationally Determined Contributions (NDCs), allowing countries to set their own targets while mandating periodic updates every five years with progressive enhancement of ambition.
- In this context, most countries submitted their 2035 NDCs on time. India and Argentina were among the last G20 nations to do so. India had committed at COP30 in Brazil (November 2025) to update its NDCs by year-end, and the submission was finalised just before the close of FY 2025-26.
Evolution of India’s Climate Commitments
India’s NDCs have evolved with increasing ambition while respecting the principle of common but differentiated responsibilities and respective capabilities (CBDR-RC):
- First NDC (2015): Targeted a 33–35% reduction in emission intensity of GDP by 2030 from 2005 levels and 40% non-fossil capacity by 2030 (conditional on international support).
- Updated NDC (2022): Raised the targets to 45% emission intensity reduction and 50% non-fossil capacity by 2030, while introducing the LiFE (Lifestyle for Environment) initiative.
- Achievements: India has already surpassed both 2030 targets — achieving a 36% intensity reduction (2005–2020) and over 52.57% non-fossil capacity (approximately 272 GW) as of February 2026.
Salient Features of the Updated NDCs (2035 Targets)
The revised NDCs reflect a calibrated enhancement across three core pillars:
- Non-fossil fuel share in installed electric capacity — Raised to 60% by 2035 (from the earlier 50% target by 2030).
- Emission intensity of GDP — Strengthened to a 47% reduction by 2035 from 2005 levels (building on the previous 45% target by 2030).
- Carbon sink creation — Increased to 3.5–4.0 billion tonnes of CO₂ equivalent by 2035 through afforestation and forest cover (up from 2.5–3.0 billion tonnes by 2030 and 2.29 billion tonnes already achieved by 2021).
These quantitative targets are complemented by qualitative measures, including the LiFE initiative, climate-resilient infrastructure, and mobilisation of climate finance and technology transfer. As a developing country, India prioritises emission intensity reduction and non-fossil capacity expansion rather than absolute emission cuts, unlike the EU’s commitment to 40–49% absolute reductions below 2005 levels.
Core Challenges in India’s Energy Transition
1. Technical Barriers
The shift to 60% non-fossil capacity requires a complete redesign of the national power system.
- Grid Intermittency: Solar power peaks at noon, but demand peaks in the evening. This mismatch causes Grid Instability and leads to curtailment (wasting green energy) to prevent grid collapse.
- Transmission Bottlenecks: Renewable-rich zones (like Rajasthan) are far from industrial hubs. Building Green Energy Corridors faces massive investment needs and “Right of Way” (RoW) legal hurdles.
- Land Acquisition: Solar/wind projects are “land-hungry,” often overlapping with fragile ecosystems (e.g., Great Indian Bustard habitats) or fertile farmland, triggering local resistance and food security concerns.
2. Economic Hurdles
The financial viability of the transition is hindered by the high cost of energy storage.
- High CAPEX of BESS: While solar costs have dropped, the Capital Expenditure for battery systems remains high, making green power more expensive than coal during non-solar hours.
- Critical Mineral Vulnerability: India lacks reserves of Lithium, Cobalt, and Nickel. Relying on imports (mostly from China) replaces oil dependency with a new mineral dependency, prone to global price volatility.
- DISCOM Financial Stress: Deeply indebted State Power Distribution Companies struggle to pay producers on time, discouraging private investment in expensive storage technologies.
3. Social Dimensions
Decarbonization must not leave the 13 million people dependent on India’s “Coal Belt” behind.
- Livelihood Displacement: A sudden shift away from coal without a safety net could lead to economic depression in states like Jharkhand and Odisha.
- The Re-skilling Gap: Coal mining skills are not easily transferable to renewable energy jobs. There is an urgent need for vocational training and alternative industrial development.
- Revenue Loss: Eastern states rely heavily on coal royalties. The transition requires a new fiscal framework to compensate for declining state revenues.
4. Strategic Risks
Global instability highlights the need for a self-reliant energy ecosystem.
- Weaponization of Energy: Global conflicts demonstrate the “chokehold” fossil fuel exporters have on the economy, forcing India to spend foreign exchange on imports instead of green infrastructure.
- Supply Chain Monopolies: The concentration of solar and battery supply chains makes India vulnerable to geopolitical tensions and trade barriers.
- The Finance Gap: The failure of developed nations to meet the $100 billion climate finance goal leaves the financial burden of the transition largely on India’s domestic taxpayers.
Capacity versus Actual Generation-Core Issue
India has achieved remarkable success in capacity addition, meeting the 2030 non-fossil target of 50% five years ahead of schedule. However, a structural mismatch persists. Non-fossil sources account for over 52% of installed capacity but contribute only about 25% of actual electricity generation.
This gap arises mainly from:
- The intermittent nature of solar and wind power.
- Inadequate battery storage, leading to curtailment of surplus renewable energy.
- Grid infrastructure constraints that limit seamless integration.
Consequently, coal-based power continues to dominate during peak demand and non-solar hours. Without addressing this gap, the enhanced NDC targets risk being viewed as “tepid promises” despite being described as easily achievable by the government.
Strategic Imperative of Battery Storage and Grid Modernisation
Battery Energy Storage Systems (BESS) and pumped hydro storage are critical for bridging the capacity-generation divide. Long-duration storage is essential to shift daytime solar generation to evening peak demand.
- The Central Electricity Authority estimates a requirement of 411.4 GWh by 2031-32 (236.2 GWh BESS and 175.2 GWh PSP). Modernising the grid through green energy corridors, advanced forecasting, and demand-side management will reduce reliance on fossil fuel backup and enhance system reliability.
Key Government Initiatives for Renewable Integration and Storage
The Government of India has introduced a comprehensive set of policy measures to bridge the generation gap and support storage deployment:
1. Viability Gap Funding (VGF) for BESS
- Financial support to make Battery Energy Storage Systems (BESS) viable
- ₹3,760 crore for 13.2 GWh + ₹5,400 crore for 30 GWh
- Up to 40% capital subsidy via Power System Development Fund
- Aims to reduce cost barriers and accelerate storage deployment
2. Production-Linked Incentive (PLI) for Advanced Chemistry Cells
- Targets 50 GWh domestic manufacturing capacity
- Promotes self-reliance in battery supply chain
- Reduces dependence on imports (China-dominated market)
- Supports grid-scale and EV battery ecosystem
3. Energy Storage Obligation (ESO)
- Mandates DISCOMs to procure a share of power from storage
- Gradually increasing targets ensure demand for storage market
- Drives long-term investment in BESS and PSP
4. Co-location Advisory for Renewables + Storage
- Requires integration of minimum 2-hour storage with new RE projects
- Improves grid stability and reduces intermittency
- Promotes Round-the-Clock (RTC) renewable power
5. Green Energy Corridors (GEC)
- Dedicated transmission infrastructure for renewable energy
- Enables transfer from RE-rich regions (Rajasthan, Gujarat) to demand centres
- Includes waiver of inter-state transmission charges
6. National Green Hydrogen Mission
- Promotes hydrogen as long-duration energy storage
- Supports decarbonisation of industry (steel, fertilisers)
- Enhances energy security
7. PM-KUSUM & Decentralised Renewable Energy
- Promotes solar pumps and decentralised solar plants
- Reduces grid burden and transmission losses
- Supports rural energy transition
8. National Solar Mission
- Flagship programme to scale solar energy capacity
- Encourages large-scale solar parks and rooftop solar
- Backbone of India’s non-fossil capacity growth
Way Forward: Moving from Promises to Performance
To translate the updated NDC targets into tangible climate and energy outcomes, India must adopt a focused multi-pronged strategy that bridges the critical gap between installed capacity and actual generation. The following priorities are essential:
- Accelerate Battery Storage Deployment: Fast-track Viability Gap Funding (VGF) tenders, introduce incentives for long-duration storage, and promote large-scale hybrid renewable-plus-storage projects to address the intermittency of solar and wind power.
- Mandate Round-the-Clock (RTC) Renewables: Shift future tenders from standalone solar/wind projects to bundled hybrid models with mandatory battery storage or pumped hydro to ensure reliable, dispatchable green power supply.
- Modernise Grid Infrastructure: Invest in smart grids, AI-based forecasting, and demand-side management systems for seamless integration and real-time balancing of variable renewable energy.
- Enhance Financing and Innovation: Mobilise concessional international climate finance, strengthen indigenous R&D in battery technologies, streamline regulatory clearances, and secure critical minerals (lithium, cobalt, nickel) through global partnerships and domestic recycling.
- Scale Up Long-Duration Storage: Fast-track Pumped Storage Projects (PSP) and green hydrogen initiatives alongside batteries to meet industrial-scale and seasonal energy storage needs.
- Strengthen Governance and Monitoring: Establish robust Measurement, Reporting, and Verification (MRV) mechanisms with effective inter-ministerial coordination.
- Ensure Inclusive and Just Transition: Create a National Transition Fund to re-skill coal workers, link afforestation with rural livelihoods, promote green jobs, and implement Time-of-Day (ToD) tariffs to improve the financial health of DISCOMs while balancing load.
Conclusion
India’s updated NDCs for 2035 reflect a credible and development-sensitive enhancement of climate ambition, but their success hinges on bridging the capacity–generation gap. Without rapid scaling of battery storage, grid modernisation, and financial viability, the targets risk remaining capacity-centric rather than outcome-oriented. Thus, India’s climate leadership will ultimately depend on its ability to transition from installed potential to reliable, dispatchable clean energy generation.
