The government is receiving commendation for its pragmatic approach to an impending power crisis. Projections indicate that India's electricity demand will soon outstrip supply due to an expanding manufacturing sector and rising per capita power consumption. This raises concerns about prolonged power outages during peak hours in the hot summer months, which could disrupt the entire economy and lead to cost escalations.

In response, a contingency plan is in progress to add another 30 gigawatts (GW) to the existing 50 GW of coal-based capacity under development. It's now clear that there will be no retirements or repurposing of coal-based power stations before 2030. This might necessitate adjustments to the National Electricity Plan (NEP) 2022-32. While the NEP originally aimed to increase coal-based capacity from 212 GW to 260 GW by 2032, the pace of expansion may accelerate, potentially delaying the transition to cleaner energy sources and India's goal of becoming carbon-neutral by 2070.

In recent years, India has made significant progress in renewable energy (RE). The objective is to increase RE capacity from the current 172 GW to 596 GW by FY32. However, the share of non-fossil fuels in the energy mix might fall short of the projected 50% for FY30-end. Currently, it stands at just 13%, and the ability of RE to meet peak demand is even lower.

Domestic coal supply has risen recently, thanks to increased production by Coal India and the ability to sell surplus captive coal on the open market. Union power minister R K Singh has improved the viability of coal-based power by introducing payment discipline in the power supply chain. However, challenges such as rising external costs have limited the scope for gas-based power units, making coal-based power dominant.

The renewed focus on coal is a sensible policy decision, emphasizing energy security. The transition to a greener energy era should be as swift as possible. To achieve this, the government is incentivizing investments in solar and wind energy, focusing on reducing RE storage costs, addressing grid connectivity issues, and managing the intermittent nature of RE. Market-friendly policies like open access and waiving cross-subsidy surcharges for RE are being implemented.

India is also at the forefront of green hydrogen initiatives, aiming to become a global hub for this eco-friendly fuel. To reinforce the RE policy paradigm, viable technology-sensitive models of debt funding and crowd financing are essential, along with risk-sharing among all stakeholders, including central and state governments. Adequate investments in transmission and distribution (T&D) segments are vital to avert the impending power crisis, especially given that T&D losses in India are still considerably higher than in China.