India’s energy transition faces infrastructure, regulatory hurdles, says S&P Global Commodity Insights

The energy sector in India faces challenges such as infrastructure constraints, the weak financial health of distribution companies, and regulatory hurdles, according to S&P Global Commodity Insights. India’s total installed renewable capacity currently exceeds 200 GW, with a target of reaching 500 GW by 2030.

Eduard Sala de Vedruna, Head of Research for Energy Transition, Sustainability and Services at S&P Global Commodity Insights, said, “As of now, India is heavily reliant on coal, which accounts for a substantial portion of its energy production. However, there is a strong push towards diversifying the energy mix with an increased focus on renewable sources such as solar and wind.”

He added that significant investment is needed in grid modernization and energy storage solutions to support the integration of renewable energy. “The development of smart grids, electric vehicles, and energy-efficient technologies are areas with significant potential in this space,” he said.

Addressing the issue of rising global power demand, Jenny Yang, Global Head of Power and Renewables Research at S&P Global Commodity Insights, said global power demand is anticipated to increase by more than 80% over the next 25 years, driven by economic growth, electrification, and emerging demand from new sectors like data centres. She noted that significant investment is required in both new generation capacity and grid infrastructure to meet that demand growth.

She said, “Renewables and battery storage are poised to dominate capacity additions, accounting for an impressive 96% of net additions between now and 2050, thanks to their cost competitiveness across multiple markets. In India, non-fossil fuel sources contributed to 47% of capacity and 24% of generation in 2024. By 2050, these figures are projected to rise to 77% and 66%, respectively. Despite the massive build-out in renewables, conventional thermal power will still make up 16% of global capacity additions through 2050 to support system reliability.”

The conference also discussed long-term global oil demand, which is expected to decline due to the adoption of alternative energy and gains in efficiency. According to S&P Global Commodity Insights, global oil demand growth could slow from 1.2 million to 0.8 million barrels per day, with the possibility of zero or negative growth in the second half of the year.