India is currently passing through a historic energy transition. The country’s economic growth can no longer rely solely on traditional fuels; instead, it must move towards a sustainable model that balances both environmental concerns and development needs. Over the last few years, India has rapidly increased its capabilities in solar and wind energy, but the path to Net Zero is not the easiest one.
Let’s understand India’s ambitious energy shift in detail and see where investors stand between the reality of coal and the dream of EVs.
What’s Happening?
According to a study by NITI Aayog, renewable energy will fully dominate India’s power grid by 2070. But there is a catch. This transition is happening at a slower pace than expected, mainly due to some serious structural challenges. As per the report, India’s energy demand is likely to double by 2047. Although nearly 70% of this rising demand will be met by solar, wind, and other renewable energy sources, fossil fuels are still not going out of the picture.
In fact, India will not only continue using coal for the next 25 years but will also increase its usage. This paradox has become a key point of discussion today. While the country is moving rapidly towards green energy, its dependence on coal remains firmly in place.
Coal Dependency and Grid Reality
On the supply side, India continues to have a strong thermal power base. Reports suggest that coal-based power generation capacity in India is expected to increase from the current 210 gigawatts (GW) to 250 GW by 2030. The primary reason for this is the need for base load power. Renewable energy sources are intermittent by nature, the sun does not always shine, and the wind does not always blow.
This is the core structural challenge. Until affordable and efficient large-scale energy storage technology becomes widely available, dependence on coal will continue to ensure grid stability. To maintain energy security, coal will remain a significant part of India’s energy mix for the next two and a half decades, even as the share of renewables steadily rises.
The EV Dream and Lack of Infrastructure
Major changes are also being planned in the transport sector. NITI Aayog has proposed a complete phase-out of diesel-run four-wheelers, with the objective of promoting electric and cleaner fuel vehicles.
However, the road ahead is not easy. The biggest hurdle in India’s Net Zero transport push is the severe shortage of charging infrastructure. Additionally, India depends heavily on imports for critical minerals such as lithium and cobalt, which are essential for EV batteries. High vehicle density on roads and inadequate public transport systems are further slowing this transition.
What Does This Mean for Investors?
Despite these challenges, the sector offers meaningful long-term opportunities for investors. The government’s targets are clear: by 2030, electric vehicles should account for 30% of private car sales, 70% of commercial vehicles, 40% of buses, and 80% of two- and three-wheelers.
This indicates that the coming decade will see substantial capital expenditure in battery manufacturing, charging infrastructure, and renewable energy projects. Companies focused on energy storage solutions and smart grid management could play a crucial role going forward. At the same time, firms working with CNG and hybrid technologies may also benefit in the near term as diesel vehicles are gradually phased out.
What’s Next?
The future presents a mixed picture. On one hand, there is a clear roadmap for renewable energy dominance by 2070; on the other, continued reliance on coal for at least the next 25 years. India will need to strike a careful balance between clean and reliable energy to meet its growing needs.
NITI Aayog’s diesel phase-out proposal and the steady expansion of renewable energy indicate that the policy direction is sound. However, success on the ground will depend on how quickly charging infrastructure is built and how efficiently the power grid is modernised. For investors, this is the time to look beyond the noise and identify companies that are addressing these structural challenges. This transition is a marathon, not a sprint, and participation in this space should be guided by a long-term perspective.
*The article is for information purposes only. This is not investment advice.
*Disclaimer: Teji Mandi Disclaimer
