The next test for renewable energy

Why in the News

Renewables are now the default in energy planning, so the question is no longer whether they pay but whether power systems can absorb them at scale. India has just hosted the Bharat Renewable Energy Summit, and COP31 hosts Türkiye and Australia have proposed a “35 by 35” global electrification target.

Where does the global renewable transition stand?

1. What it is: The energy transition is the shift from fossil fuels to clean sources such as solar and wind. “35 by 35” seeks to raise electricity’s share of final energy use to 35% by 2035.
2. Record additions: The world added 692 GW of renewable capacity last year, nearly 97% of it solar and wind.
3. Uneven spread: China accounted for nearly two-thirds of last year’s additions and Africa only 1.6%, so the global tripling goal remains far off.
4. India’s position: India pairs near-universal household electricity access with the world’s third-largest renewable capacity. It has about 308 GW of non-fossil capacity; crossing 500 GW is a milestone, not the finish line.
5. The takeaway: Building cheap capacity is no longer the hard part; getting grids, markets and supply chains to use it is.

What three challenges explain the gap between ambition and reality?

1. Grids built for fossil plants: Grids and markets designed for centralised fossil plants cannot carry cheap renewable power to users.
2. Concentrated supply chains: Intellectual property and cleantech supply chains sit in a few hands, so countries risk losing access to the equipment they need.
3. AI-driven demand: Power demand from artificial intelligence (AI) is surging against limits on energy, water and climate.

What does a reliable renewable system require?

1. Paying for flexibility: Contracts pay for energy delivered, not dispatchability (supplying power when the grid needs it). So cheap capacity goes unused, and distribution companies (discoms) and consumers bear the cost.
2. Storage gap: India’s installed battery storage was only about 9 GWh in mid-2026, most added this year.
3. Global grid investment: The International Renewable Energy Agency (IRENA) says global grid investment must roughly double, from about $0.5 trillion to $1 trillion a year.
4. India’s grid push: India recently approved about $19 billion for State transmission and 50 GWh of battery storage, under Green Energy Corridor Phase III.

What do security and digital systems mean for the transition?

1. Secure, not a new dependency: Clean energy loses its security case if it swaps one import dependency for another. The International Energy Agency (IEA) finds China holds 70% of cleantech manufacturing investment.
2. India’s manufacturing response: Solar module capacity has reached about 262 GW and cell capacity about 37 GW. The National Critical Minerals Mission and Green Hydrogen Mission target mineral processing and electrolyser manufacturing.
3. Smart meters: India has deployed about 54 million smart meters, which let the grid read demand digitally. They enable grid-edge storage at consumers’ premises and a digital public infrastructure for energy.
4. AI as tool and load: AI can forecast renewable output and optimise grids. Data centres’ electricity use should roughly double by 2030, and their water use could more than double.

Challenges

1. Curtailment: Plants are told to cut output when grids cannot absorb it, which hurts project returns.
2. Weak discoms: Financially stressed discoms delay payments to generators.
3. Contract lock-in: Existing 25-year contracts fix terms for decades and slow any move to market-based trading.

Way Forward

1. Market reform: Move to real-time trading and contracts for difference (the state pays or collects the gap between an agreed price and the market price).
2. Integrated auctions: Run technology-agnostic auctions on integrated system plans, and cut permitting delays and grid-connection queues.
3. Smart siting of new loads: Site data centres using heat and water-stress data, and require them to disclose power, water and carbon intensity.
4. Country-specific finance: Multilateral lenders should offer a menu of options matched to each country’s starting point.

Conclusion

Cheap renewables made the transition possible, but grids, markets and supply chains will decide whether it delivers. The real test is whether every unit generated is used and every consumer, manufacturer and young worker gains from it.

Key numbers

1. Global renewable capacity: 5,149 GW in 2025, about 80% higher than in 2020.
2. Electricity access: About 560 million people in Sub-Saharan Africa have no electricity.
3. Green Energy Corridor Phase III: Up to 135 GW of renewable power evacuated by 2032-33.
4. Data-centre electricity use: About 485 TWh rising to 950 TWh by 2030.
5. Data-centre share: About 1.5% to 3% of global electricity demand by 2030.
6. Tripling goal: Renewable capacity tripled by 2030.

Matching Previous Year Question

“[2026] Which of the following statements about Rare Earth Elements (REEs) and Critical Minerals is/are correct? 1. Modern technological innovations including Artificial Intelligence, robotics and space exploration extensively utilise Rare Earth Elements (REEs). 2. China has the highest share in mining of REEs followed by India. 3. The Government of India launched the National Critical Mineral Mission (NCMM) in 2025 to establish a robust framework for self-reliance in the critical mineral sector. 4. Rare Earth Elements are a set of 13 metallic elements. Select the answer using the code given below: (a) 1 and 3 only (b) 3 only (c) 1, 3 and 4 (d) 1, 2 and 4 ANSWER: A”