India’s Energy Sector: At the Crossroads of Change

INTRODUCTION

Energy is derived from the Greek work ‘energia’ and is referred to as a scalar physical quantity that is a property of objects and systems which is conserved by nature. Energy is often defined as the ability to work. Energy is an important building block in human development, and, as such, acts as a key factor in determining the economic development of all countries.

he International Energy Agency (IEA) in its report ‘World Energy Outlook 2024 states that total global energy demand rose by around 2% in 2023, with declines in advanced economies more than offset by large increases in emerging market and developing economies. A record high level of clean energy came online globally, including more than 560 gigawatts (GW) of new renewable power capacity. Around USD 2 trillion is expected to be invested in clean energy in 2024, almost double the amount invested in fossil fuels. However, two-thirds of the overall increase in energy demand in 2023 was met by fossil fuels and energy-related carbon dioxide (CO2) emissions reached a record high.

India’s substantial and sustained economic growth is placing enormous demand on its energy resources. Energy requirement in our country is increasing at a very rapid rate. While efforts are being made to improve availability of various energy sources, there is still a continuing gap between demand and supply of energy. Thus energy conservation has also emerged as one of the major issues in recent years. Conservation and efficient utilization of energy resources play a vital role in narrowing the gap between demand and supply of energy. Improving energy efficiency is probably the most profitable thing that can be done in the short term.

FEW RECENT DEVELOPMENTS IN ENERGY SECTORS

• Ministry of Power (MOP) notified the Electricity (Promoting Renewable Energy Through Green Energy Open Access) Rules, 2022 (REOA Rules) on 6 June 2022 in order to further accelerate India’s ambitious renewable energy programmes, with the objective of ensuring access to affordable, reliable, sustainable and green energy for all. Further, State Electricity Regulatory Commissions have been directed to align their regulations with the REOA Rules in terms of the Electricity Act, 2003.
• Government has notified guidelines for the procurement and utilisation of battery energy storage systems (BESS) as part of generation, transmission and distribution assets, along with ancillary services.
• Development of Energy Storage System (ESS) Roadmap for India 2019-2032
• MOP notified the National Framework for Energy Storage System (ESS) in August 2023 with the key objective of ensuring a constant supply of renewable energy (Round-the-Clock Renewable Energy), reduction of emissions and lowering of costs by incentivising ESS deployment.
• The Green Hydrogen Standard notified on 19.8.2023
• In October 2023, R&D Roadmap for National Green Hydrogen Mission unveiled.
• Offshore Wind Energy Lease Rules 2023 notified on 19.12.23 to regulate the allocation of offshore wind sea blocks for developers.
• Renewal Purchase Obligation (RPO) targets until March 2030 were notified under the Energy Conservation Act 2001

MEANING OF ‘ENERGY’

Under Section 2(h) of the Energy Conservation Act 2001, Energy means any form of energy derived from fossil fuels or non-fossil sources or renewable sources.

Energy comes in different forms:

heat (thermal),

light (radiant),

mechanical,

electrical,

chemical, and

nuclear energy.

All forms of energy are stored in different ways, in the energy sources that we use every day. Energy sources are divided into two groups – Primary and Secondary sources of energy. The main difference between primary and secondary energy sources is that Primary energy resources are those found in nature whereas Secondary energy resources are those forms that must be produced by conversion/transformation of primary resources.

India’s Renewable Energy Potential and Installed Capacity

In India, there is a high potential for generation of renewable energy from various sources: wind, solar, biomass, small hydro, and bagasse-based cogeneration. The total estimated potential for renewable power generation in the country as of 31 March 2023 stood at 2,109,654 MW. This includes:

• Solar Power: 748,990 MW (35.50%)

• Wind Power: 1,163,856 MW (55.17%) at 150 m hub height

• Large Hydro Power: 133,410 MW (6.32%)

• Small Hydro Power (SHP): 21,134 MW (1%)

• Biomass Power: 28,447 MW (1.35%)

• Bagasse-based Cogeneration: 13,818 MW (0.66%)

The geographic distribution of this renewable power potential highlights that:

• Rajasthan holds the largest share at approximately 20.3% (428,322 MW)

• Maharashtra follows with 11.79% (248,665 MW)

• Gujarat accounts for 10.45% (220,505 MW)

• Karnataka contributes 9.75% (205,648 MW)

Collectively, these four states account for more than 52% of the total renewable power potential in India.

Installed Renewable Energy Capacity (as of 31 March 2024)

As of 31 March 2024, India’s installed renewable energy capacity, including large hydro, reached 190.57 GW, constituting approximately 43.12% of the country’s total installed power generation capacity. Out of this, non-fossil fuel sources contributed around 45%.

Over the last nine years, the renewable energy installed capacity (excluding large hydro) has grown significantly — increasing by approximately 259.6%, from around 39.9 GW in 2014–15 to 143.64 GW in 2023–24. This reflects a compound annual growth rate (CAGR) of about 10.36%.

India’s Global Standing in Renewable Energy

According to the International Renewable Energy Agency (IRENA), India ranks 4th globally in terms of total installed renewable energy capacity. This positions India behind only China, the United States, and Brazil, marking its strong presence in the global shift towards clean energy.

Tarali Pumped Storage Hydro Project (Adani Green)

 Overview

• Capacity: 1,500 MW pumped storage facility (with multiple reversible turbines)
• Location: Dangistewadi village, Patan tehsil, Satara district, in the ecologically sensitive Western Ghats region
• Project model: Water is pumped to an upper reservoir during off-peak demand and released to generate electricity during peak demand, allowing flexible usage with minimal water loss

Environmental & Regulatory Status

• Environmental Public Hearing: Conducted on 12 March 2024 by the Maharashtra Pollution Control Board, giving local residents and NGOs the opportunity to raise concerns about land and forest use for the upper reservoir
• Land Impact: Approximately 300 hectares to be acquired; including ~100 ha forest area—a point of environmental sensitivity, particularly in the Western Ghats

Governance Considerations

• Expert Committee Oversight: Adani Green has engaged members of the Union Environment Ministry’s Expert Appraisal Committee, including advisors with ties to the company, which has raised concerns over impartial project clearances

Strategic Significance

Summary

• A major push in pumped storage hydro: Tarali ranks among India’s largest pumped storage plans and supports grid stability and renewable energy integration.
• Environmental scrutiny: Western Ghats terrain brings heightened EIA scrutiny, debate over forest and agricultural land use.
• Governance transparency matters: Advisory overlaps and EAC appointments tied to project proponents prompt governance watchfulness.

Major Issues with Tarali Pumped Storage Hydro Project

1.  Environmental Impact on Western Ghats

• Location: The project is situated in the Western Ghats, a UNESCO World Heritage site and one of the most ecologically sensitive zones in India.
• Forest Land Use: Over 100 hectares of forest land may be diverted for the upper reservoir. This threatens local biodiversity, including flora and fauna that are endemic to the region.
• Risk: Fragmentation of habitat and disruption of ecological corridors.

2.  Displacement and Impact on Local Communities

• Land Acquisition: Around 300 hectares total land to be acquired, affecting tribal and farming communities.
• Livelihood Concerns: Farmers fear loss of agricultural land and water sources, leading to loss of income and food insecurity.
• Public Opposition: Residents and environmental groups raised objections during the March 2024 public hearing.

3.  Water Use and Availability

• Local Dependency: The Tarali River and local water bodies are vital for irrigation and drinking water.
• Water Sharing Unclear: Lack of clarity on how the project will affect downstream users or seasonal water flow.

4.  Regulatory Transparency and Conflict of Interest

• Conflict of Interest Allegations: Key advisors to the Union Environment Ministry’s Expert Appraisal Committee (EAC) have alleged ties to Adani Green or its subsidiaries.
• Governance Issue: This raises questions about bias in environmental clearance and weakens trust in due process.

5.  Grid Relevance vs Environmental Cost

• Energy Need Justified? While pumped hydro supports renewable grid balancing, critics argue there’s no clear demand-side analysis justifying this specific location.
• Alternative Options: Solar + battery storage systems might offer less disruptive alternatives.

6.  Community Consultation Process

• Public Hearing Concerns: Villagers and NGOs claimed that the hearing process was rushed, information was insufficient, and genuine concerns weren’t fully addressed.
• Translation Gaps: Locals allege documents were not properly translated or explained in local languages.

Summary of Major Issues

References: 

• MOSPI – Energy Statistics India 2024: https://www.mospi.gov.in/sites/default/files/publication_reports/EnergyStatistics_India_publication_2024N.pdf
• Press Information Bureau (PIB) – Power Sector Status (2024):  https://pib.gov.in/PressReleaseIframePage.aspx?PRID=2034916
• SolarQuarter – State-wise Potential: https://solarquarter.com/2024/04/02/indias-energy-transition-insights-from-the-2024-energy-statistics-report/
• IRENA – Renewable Energy Capacity Rankings 2024: https://cdnbbsr.s3waas.gov.in/s3716e1b8c6cd17b771da77391355749f3/uploads/2024/10/20241029512325464.pdf
• India Tracker – Capacity Growth Data: https://www.indiatracker.in/story/indias-renewable-energy-capacity-soars-to-227-gw-eyes-net-zero-by-2070