Decarbonizing India’s Power Sector: Basic Need to achieve Net-Zero by 2070

India’s power sector sits at the core of its energy transition, balancing rapid economic growth with the need to reduce emissions. While renewable capacity has expanded, coal remains dominant, revealing the structural challenges of decarbonisation. Progress toward net-zero by 2070 will depend on how effectively the power system is transformed to integrate cleaner and more reliable energy sources.

India ranks as the third-largest energy consumer globally, despite its per capita energy consumption being just one-third of the global average. India also happens to be the third-largest emitter of greenhouse gases (GHGs) worldwide, although its annual per capita emissions are also about one-third of the global average. The five top GHG-emitting countries of the world are shown in Table 1.

Table 1 : Five Top Most GHG Emitting Countries of the World: 2025.

Source: EDGAR (Emissions Database for Global Atmospheric Research)-2025

Power Sector: Largest Contributor of GHG Emissions

The sectoral contribution to GHG emissions globally and in India is shown in Table 2. The power sector is the largest contributor to GHG emissions globally as well as in India. The bulk of GHG emissions consists of carbon dioxide (CO2) and methane (CH4) resulting from the combustion of fossil fuels, while the remaining share of emissions iscomprised of nitrous oxide (N2O) and fluorinated gases (F-gases). The percentage share of such gases in GHG is shown in Table 3. The data are based on the EDGAR Report 2025 (Emissions Database for Global Atmospheric Research), published by the Joint Research Centre of the European Commission.

Table 2 : Percentage contribution of different sectors to GHG: Year 2024.

Table 3: Share of different gases in GHG : World & India ; Year 2024

Source: EDGAR (Emissions Database for Global Atmospheric Research) – 2025

In 2024, the majority of GHG emissions consisted of carbon dioxide (CO2) resulting from the combustion of fossil fuels, followed by methane (CH4), while the remaining share of emissions comprised nitrous oxide (N2O) and fluorinated gases (F-gases). Global GHG emissions in 2024 increased by 1.3% from 2023, while in India they increased by 3.9% in 2024.
The vast majority of CO2 emissions in India come from the burning of fossil fuels such as coal, oil, and natural gas for power generation or to fuel vehicles and machines. According to a report by the International Energy Agency (IEA), the combustion of coal contributes the highest share of CO2 emissions, as shown in Table 4, followed by oil and natural gas. Most of the CO2 emissions from coal originate from coal-fired power plants, while CO2 emissions from oil and natural gas are mainly from transport and industrial activities.

Table 4: Share of CO₂ Emissions in different fuels: India; Year : 2023

Source: IEA Report – Energy System of India 

Coal: Backbone of Indian Power Sector

In the sectoral breakdown of energy-related CO2 emissions, as shown in Table 5, the Indian power sector is the largest source of CO₂ emissions, contributing about 47.78% in the year 2024. The Indian power sector ranks fourth worldwide in terms of emission intensity from electricity generation, with emissions of approximately 0.710 tCO₂ per MWh in 2024–25. The transportation sector, being heavily reliant on oil-based fuels, also contributes a substantial portion of CO2 emissions. Within the industrial sector, emissions stem primarily from the burning of fossil fuels to generate heat for industrial processes, such as the production of cement, paper, and steel.

Table 5: Sectoral CO₂ emissions in India (Year : 2024)

Source: EDGAR (Emissions Database for Global Atmospheric Research) – 2025

Coal-based power plants in India have the largest share in electricity generation. During the period April 2025–January 2026, as shown in Table 6, coal had the largest share, 43.77%, in total installed power capacity and 69.09% in total electricity generation. On the other hand, during the same period, renewables had a significant share of 40.73% in total installed capacity; however, they contributed only 15.95% of total generation. Despite the significant installed capacity of renewable energy, its output does not increase proportionally. This is because solar and wind power are weather-dependent and therefore have lower capacity factors compared to conventional power sources. Gas-based power plants in India are not operating at full capacity due to high gas prices, thus contributing 1.51% to electricity generation in spite of having a 3.98% capacity share.

Table 6: Installed Power Capacity and Electricity Generation (April 2025 – January 2026)

Source: India Climate  & Energy Dashboard ; Niti Aayog

India’s power sector, as shown in Table 7, has undergone a significant structural transformation over the last decade, between 2014–15 to 2024–25, by achieving a growth of about 90% in the installed capacity and about 65% in total electricity generation. These trends underscore the scale and pace at which India has expanded its power generation capacity to meet growing energy demand and sustain economic development.

Table 7: Growth in Power Capacity and Electricity Generation. 

Source: India Climate  & Energy Dashboard ; Niti Aayog

Another significant achievement is the aggressive push toward renewables, the share of which in the total installed capacity surged from 13.01% in 2014–15 to 31.37% in 2024–25, as shown in Table 8. While renewables contributed only 4.86% of total electricity generation in 2014–15, their contribution nearly tripled to 13.34% by 2024–25. This highlights India’s focus on building a sustainable energy base, though the generation share of 13.34% still lags behind the capacity share of 31.37% due to the low capacity factor of solar and wind energy.

Table 8: Percentage share of Power Capacity and Electricity Generation. 

Source: India Climate  & Energy Dashboard; Niti Aayog

Despite a drop in the installed capacity share of coal, it still accounts for the vast majority of actual generation, contributing 73.01% in 2024–25 compared to 75.59% a decade ago. The Ministry of Power and the Central Electricity Authority of India have estimated India’s power requirement for the year 2031–32 in their report, “National Electricity Plan 2022–23 (NEP 2022–23),” published in May 2023. The share of coal-based power in electricity generation is expected to decline from 73% in 2024–25 to around 50% by 2031–32, as shown in Table 9.

Table 9:  Power Projection for the year 2031-32 as per NEP 2022-23

The continued dominance of coal in electricity generation is a major roadblock in India’s journey towards decarbonisation. India has made the commitment to achieve net-zero emissions by 2070, as outlined in its Nationally Determined Contributions (NDCs) submitted to the United Nations Framework Convention on Climate Change (UNFCCC) under the Paris Agreement. As part of its NDCs, India has also committed to achieve 50 percent of its total installed electricity capacity from non-fossil sources by 2030, which has already been achieved in June 2025, more than five years ahead of the target. The Prime Minister of India has also announced India’s intention of achieving 500 GW of non-fossil installed electricity capacity by 2030.

Achieving net-zero emissions by 2070 will require a fundamental transformation of India’s power sector, which accounted for nearly 35% of the country’s total GHG emissions in 2024. A study titled “Scenarios Towards Viksit Bharat and Net Zero” by NITI Aayog, Govt. of India’s premier policy think tank, outlines possible pathways for transitioning India’s power sector for achieving net-zero by 2070. The approximate installed power capacity for different power sources in the year 2050 and 2070 are shown in Table 10, and the key recommendations of the study report are discussed below.

Table 10: Approx. Installed Power Capacity for achieving Net Zero.

Source: Niti Aayog Study : Scenarios Towards Viksit Bharat and Net Zero

Coal capacity is expected to be reduced gradually to 10% in 2050 and further to 2% in 2070, from the existing level of around 50% in 2025, with its role largely limited to backup capacity. This would require the phased retirement of inefficient coal plants, while retaining some capacity for system stability. In parallel, Carbon Capture, Utilization, and Storage (CCUS) technologies will need to be implemented to reduce carbon emissions by ensuring that captured carbon dioxide is either stored or reused, rather than released into the atmosphere.

Solar power is projected to emerge as the dominant backbone of India’s power system by 2050 and to continue playing this central role through 2070, while wind energy is expected to remain the second-largest renewable contributor. Given that solar and wind cannot provide round-the-clock generation, substantial long-duration Battery Energy Storage Systems (BESS) are expected to expand significantly, reaching approximately 2,500–3,000 GW by 2070, in order to support grid stability and reliability.

Natural gas, despite being a fossil fuel with relatively lower emissions, is expected to see its capacity effectively disappear after 2050, primarily due to the high volatility in natural gas prices, which limits its long-term viability in the energy mix.

Nuclear power, which provides firm low-carbon baseload capacity, is projected to see a gradual increase in its share, rising to around 4–5% of total capacity by 2070 from the existing 1.85% in 2024–25.

Overall, the total installed power capacity is projected to increase to about 6,800–7,350 GW by 2070. Within this, the share of non-fossil fuel-based generation capacity is expected to rise to around 98% by 2070, compared to around 45% in 2024–25. As a result, the grid emission factor is projected to decline from 0.710 tonnes of CO₂ per MWh in 2024–25 to zero by 2070.

Achieving net zero will also require significant financial mobilisation, with total investment needs in the power sector alone estimated at around USD 14.23 trillion by 2070.

A study titled “Unlocking India’s RE and Green Hydrogen Potential: An Assessment of Land, Water, and Climate Nexus,”published in September 2024 by the Council on Energy, Environment and Water, estimates that India would require nearly 7,000 GW of renewable energy capacity and a cumulative investment of about US$10.1 trillion to achieve its net-zero emissions target by 2070.

Climate Action Tracker (CAT), an initiative of Climate Analytics that monitors climate actions of 34 countries and the European Union, accounting for nearly 85% of global emissions, has suggested that India would need to significantly cut its coal-based power generation to around 17–19% by 2030 and phase it out entirely by 2040 to remain consistent with the goals of the Paris Agreement. According to CAT, under the current policy framework, India’s CO₂ emissions could increase from about 3.2 billion tonnes in 2024 to roughly 4.4–4.6 billion tonnes by 2030. The assessment considers India’s progress toward its net-zero target to be inadequate, primarily due to the absence of a clear and detailed roadmap for reducing coal-based power generation. The study by CAT emphasises that, without a carefully planned strategy to gradually reduce dependence on fossil fuels in both energy consumption and electricity generation, achieving net-zero emissions in India by 2070 will be extremely challenging unless stronger measures are adopted.

The Road Ahead: Towards a Net Zero Power System

Decarbonising the power sector will be the most important step for reducing greenhouse gas emissions in the coming decades. Since electricity generation is one of the largest sources of emissions, transforming the power sector will play a crucial role in helping India move towards its net-zero target by 2070.

The main challenge will be to rapidly expand renewable energy capacity, especially solar and wind power. Because solar and wind power can create instability in the power grid due to their intermittent nature, India will need to develop large and efficient BESS and other storage solutions. These technologies will help store excess renewable power and supply electricity when generation is low, making the overall power system more stable and reliable. In addition, stalled hydroelectric and nuclear power projects may need to be revived to provide reliable low-carbon electricity. Strengthening grid flexibility and expanding storage capacity will therefore be essential for India to successfully transition to a low-carbon power system and achieve its net-zero emissions goal by 2070.

Another important task will be to gradually and responsibly reduce dependence on coal, while ensuring that the transition does not disrupt energy security or economic growth. India’s growing economy requires a steady supply of electricity, so power must remain both affordable and reliable for households, industries, and businesses.

In the long-term energy transition, the role of other fossil fuels and nuclear power will also be important in helping India achieve its net-zero emissions target. Unlike solar and wind energy, nuclear power can generate electricity continuously and provide reliable baseload power, which helps maintain stability in the power system. Because of this advantage, nuclear energy is expected to complement renewable energy sources in India’s future electricity mix. Recognising its importance, the Government of India is promoting nuclear energy as a key pillar of the country’s long-term clean energy transition strategy. The government has set an ambitious target of building about 100 GW of nuclear power capacity by 2047, the year when India will celebrate 100 years of independence. To accelerate the expansion of nuclear power, the Government of India is also planning to open up the sector to greater private sector participation to bring in additional investment, advanced technology, and faster project execution.

In parallel, India is also focusing on developing new clean fuels such as green hydrogen. Under the National Green Hydrogen Mission, the country has set a target to produce 5 million tonnes of green hydrogen annually by 2030. Achieving this target will require a large expansion of renewable energy capacity, about 125 GW, to supply clean electricity for hydrogen production. Green hydrogen is expected to play a major role in reducing emissions in hard-to-decarbonise sectors such as steel, refining, fertilisers, and heavy transport, thereby supporting India’s broader transition to a low-carbon economy.

Bibliography

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