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Subject: Renewable Energy Sector

  • Transmission Constraints Emerge as the Binding Limit on India’s Renewable Expansion

    Why in the News

    Insufficient transmission lines have emerged as a major obstacle to India’s renewable energy expansion, with many solar projects being curtailed during daylight hours, a rating agency assessment released on 19 August 2026 found. The constraint has shifted the binding limit on India’s energy transition from how fast capacity can be built to how much of it the grid can actually carry, and new project bidding has collapsed in response.

    What is curtailment of renewable power?

    1. Forced reduction of output: Curtailment occurs when a power generator is forced to reduce or stop producing electricity because of oversupply and grid congestion, even though the plant is capable of generating.
    2. Why solar is hit hardest: Solar output peaks in the middle of the day, when several projects on the same corridor feed in simultaneously and demand is not correspondingly high, so the surplus cannot be evacuated.
    3. What it costs the generator: A curtailed unit is generation permanently lost, since sunlight cannot be stored without additional storage capacity, and the fixed cost of the asset continues to accrue against a smaller output.
    4. Scale of the problem: Around 37% of renewable energy capacity at substations affected by curtailment in the northern, western and southern regions operates under short term access arrangements, and this capacity faces 30% to 50% curtailment during the day.

    What is Temporary General Network Access?

    1. Short term use of spare grid capacity: Temporary General Network Access (T-GNA) is a short term arrangement that allows a renewable energy project to use available capacity on the inter-State transmission system, typically for periods ranging from a single time block to about 11 months.
    2. Why it is precarious: T-GNA gives no firm entitlement to evacuate power, so projects operating under it are particularly vulnerable to curtailment, which raises their operational costs and, on prolonged use, reduces the supplier’s revenues.

    What is the inter-State transmission system?

    1. The national transmission backbone: The inter-State transmission system is the network of high voltage lines and substations that carries power across State boundaries, planned centrally and operated as a single national grid, on which access rights are allotted separately from generation approvals.

    What is a Power Purchase Agreement?

    1. The contract that makes a project bankable: A Power Purchase Agreement (PPA) is the long term contract under which a distribution company or intermediary agrees to buy a defined quantity of power from a generator at an agreed tariff, and without a signed PPA a project has no assured revenue stream against which lenders will disburse.

    What is firm and dispatchable renewable energy?

    1. Renewable power with an assured supply obligation: Firm and dispatchable renewable energy (FDRE) is renewable generation contracted with an obligation to supply a specified quantum during specified hours, achieved by combining solar, wind and storage, so that the buyer receives a guaranteed profile rather than whatever the weather delivers.

    What is round the clock renewable power?

    1. Renewable supply across all 24 hours: Round the clock (RTC) power is a contracting structure in which the developer commits to supply renewable energy across every hour of the day at a specified availability, again by combining complementary sources with storage.

    How severe is the curtailment, region by region?

    1. The affected regions: Curtailment at substations has been recorded in the northern, western and southern regions, the three regions carrying the bulk of India’s solar and wind capacity.
    2. Share on temporary access: Around 37% of renewable capacity at affected substations across these three regions operates under T-GNA.
    3. The daily loss: Capacity operating under T-GNA faces 30% to 50% curtailment during daylight hours.
    4. Western region: About 55% of the affected capacity in western India was under T-GNA, and peak curtailment reached 8,617 MW as of 6 August 2026.
    5. Northern region: The corresponding peak curtailment figure for the northern region was 5,573 MW.
    6. What the concentration means: The western region, which hosts the largest solar and wind clusters, is also the region most dependent on temporary access, so the two vulnerabilities compound rather than offset.

    Why has new capacity bidding collapsed even as construction continues?

    1. Construction pipeline remains large: More than 150 GW of renewable projects were under construction as of 30 June 2026.
    2. Awards have fallen sharply: After 40.6 GW was awarded in 2024-25, awards fell to 14.7 GW in 2025-26 and stood at only 4.7 GW through 10 August 2026.
    3. Contracts awarded but not signed: Between 40 GW and 45 GW of capacity with bids already awarded remained without signed PPAs as of April 2026.
    4. Delays in firming PPAs: Delays in converting awarded bids into signed PPAs are identified as an impediment independent of the transmission constraint.
    5. Land acquisition: Land acquisition for both generation sites and transmission corridors continues to stall projects.
    6. Distribution company finances: The financial position of distribution companies limits their willingness to sign long term purchase obligations at all, since a new PPA adds a fixed payment liability to a stressed balance sheet.
    7. The bidding mix is changing: New bidding is shifting toward firm and dispatchable renewable energy and round the clock power, which require storage and therefore carry a higher tariff than plain solar.

    Is the binding constraint on India’s energy transition generation capacity or grid capacity?

    1. The generation side is not the problem: More than 150 GW is under construction and renewable energy including large hydro is projected to account for more than 35% of electricity generation by 2029-30, against 22% in 2024-25.
    2. The evacuation side is: Capacity is being commissioned faster than transmission corridors are being built, which is why up to half of the output of projects on temporary access is being discarded during the hours it is generated.
    3. The market has already priced the constraint: New awards fell from 40.6 GW to 4.7 GW in eighteen months, which is the developer response to a corridor that cannot carry what is already built.
    4. Storage is the second missing input: Timely execution of intra-State and inter-State transmission infrastructure, along with greater storage capacity, is identified as critical to sustaining renewable additions, because a line that is congested at noon is idle at night.
    5. Why this reframes the target: A target expressed in installed capacity measures what has been built, while a target expressed in share of generation measures what actually reaches consumers, and curtailment is precisely the gap between the two.

    How is transmission and renewable infrastructure financed in India?

    Source: Backgrounder, Infrastructure Financing.docx

    1. Why bank lending failed: Commercial banks funded 25 to 30 year infrastructure assets with one to three year deposits, and this asset liability mismatch produced stressed assets crossing Rs 10 lakh crore in Indian banking by 2017.
    2. National Bank for Financing Infrastructure and Development: Established in 2021 under a dedicated Act of Parliament as India’s first dedicated infrastructure development finance institution, providing non recourse long term financing with 20 to 30 year tenors that match infrastructure asset life.
    3. Its scale: As of December 2025 it had sanctioned approximately Rs 3.03 lakh crore and disbursed approximately Rs 1.09 lakh crore.
    4. Partial Credit Enhancement: It partially guarantees bonds issued by infrastructure companies and special purpose vehicles, upgrading their credit rating from BBB to AA or AAA so that insurance companies and pension funds can participate, with the first such facility sanctioned in February 2026.
    5. Sector specific development finance institutions: REC and PFC finance power generation, transmission and distribution by raising long term bonds and lending to State electricity boards and private power companies.
    6. POWERGRID InvIT: The first Infrastructure Investment Trust in the power sector, set up in 2020, with proceeds channelled into new and under construction transmission projects.
    7. How an InvIT recycles capital: The sponsor transfers only the right to collect revenues for a defined concession period and receives upfront capital which it reinvests in new projects, while ownership is never transferred and the asset reverts at the end of the concession.
    8. The SEBI safeguard: SEBI requires a minimum of 80% of InvIT assets to be in completed operational projects, which protects investors from construction risk, and InvITs may raise debt up to 49% of asset value.
    9. Infrastructure Risk Guarantee Fund: Announced in the 2026-27 Budget, it provides partial guarantees to lenders financing infrastructure projects, covering a portion of the loss on default so that lenders extend credit where they previously refused, while the partial cover preserves due diligence incentives.
    10. Sovereign green bonds: Issued by the Government of India since 2022-23 with proceeds ring fenced for renewable energy, clean transport and sustainable water management, establishing a sovereign benchmark for long term green paper.
    11. The recycling logic: The architecture is designed so that the government builds, the asset stabilises and generates revenue, the asset is monetised through an InvIT, and the capital returns to fund the next tranche of the National Infrastructure Pipeline without a fresh budget allocation each cycle.
    12. Monetisation targets: The National Monetisation Pipeline 2.0, announced in February 2026, targets Rs 16.72 lakh crore including private sector investment of Rs 5.8 lakh crore over 2025-26 to 2029-30, nearly three times the first pipeline’s target.

    Challenges to India’s Renewable Energy Expansion

    1. Transmission build lags generation build: A solar park can be commissioned in about a year while a high voltage corridor takes several years, so the two cannot be commissioned in step. e.g. peak curtailment in western India reached 8,617 MW as of 6 August 2026 on capacity that was already generating.
    2. Temporary access gives no firm evacuation right: Projects on T-GNA can be curtailed at the system operator’s discretion, which makes their revenue unpredictable and their debt harder to service. e.g. around 37% of affected capacity across three regions runs on T-GNA and faces 30% to 50% daytime curtailment.
    3. Storage capacity is inadequate to absorb the midday surplus: Without batteries or pumped hydro the same corridor is congested at noon and underused at night. e.g. the shift in new bidding toward firm and dispatchable and round the clock contracts is itself an admission that plain solar without storage no longer clears.
    4. Distribution company finances limit offtake: Loss making distribution utilities avoid signing new long term purchase obligations irrespective of tariff. e.g. 40 GW to 45 GW of awarded capacity remained without signed PPAs as of April 2026.
    5. Right of way and land acquisition for transmission corridors: Transmission lines cross many districts and require sustained land and forest clearances along the whole route. e.g. land acquisition is named alongside transmission constraints as an independent impediment to project completion.
    6. Geographic concentration of resource: Solar and wind resources are concentrated in a few States while demand centres lie elsewhere, so the transition is dependent on long distance evacuation. e.g. the western and northern regions together account for the two largest curtailment figures recorded.
    7. Tariff pressure from cheap early bids: Projects awarded at very low tariffs in earlier competitive rounds have thin margins that curtailment erases entirely. e.g. the collapse of awards from 40.6 GW in 2024-25 to 4.7 GW through August 2026 shows developers withdrawing rather than bidding lower.
    8. Grid stability with high variable renewable share: A grid carrying more than 35% renewable generation needs inertia, frequency response and balancing reserves that thermal plants currently supply. e.g. must run thermal capacity has to be retained and paid for even as it operates at low plant load factors.
    9. Module and cell supply chain dependence: Domestic content requirements raise capital costs while imported modules expose projects to trade policy shocks. e.g. changes in duty on imported solar cells and modules have repeatedly reset project economics after bids were submitted.
    10. Delayed payments to generators: Payment delays by distribution utilities strain developer working capital independently of curtailment. e.g. the late payment surcharge rules had to be framed specifically to enforce a payment discipline that contracts alone did not achieve.

    Conclusion

    India’s renewable programme has moved past the point where generation capacity is the constraint, and the evidence for that is a 150 GW construction pipeline coexisting with up to 50% daytime curtailment on capacity that is already running. The market has responded not by building more but by bidding less, with awards falling from 40.6 GW to 4.7 GW in eighteen months, and by shifting toward firm and dispatchable contracts that price the constraint into the tariff. Whether renewable energy reaches more than 35% of generation by 2029-30 now depends on the execution of intra-State and inter-State transmission lines and on storage capacity, not on the pace of solar commissioning.

    “[2022, GS3, 15 marks] Do you think India will meet 50 percent of its energy needs from renewable energy by 2030 ? Justify your answer. How will the shift of subsidies from fossil fuels to renewables help achieve the above objective? Explain.”

  • CERC lets RE developers retain grid connectivity despite project delays

    Why in the News

    The Central Electricity Regulatory Commission (CERC), the central power sector regulator, replaced the automatic revocation of grid connectivity for delayed renewable energy projects with a compensation based mechanism. Developers who miss project milestones can now retain transmission access by paying a daily charge, which converts a binary penalty into a priced extension. At least 5.3 gigawatts (GW) of renewable capacity was facing revocation up to October for failure to achieve the commercial operation date.

    What is grid connectivity under the General Network Access Regulations?

    1. About: Grid connectivity is the regulatory right of a generating station to connect to and inject power into the inter State transmission system.
    2. Why it is scarce: Transmission corridors are built years in advance at public cost, and granting connectivity to one project blocks that corridor capacity for every other applicant.
    3. The milestone conditions: A developer holding connectivity must submit land ownership documents, achieve financial closure, and commission the project by its stated date.
    4. The earlier consequence: Failure on any of these three milestones led to automatic revocation of connectivity and forfeiture of the associated bank guarantees.
    5. Governing instrument: These milestones sit under the General Network Access Regulations, which govern access to the inter State transmission network.

    Who is the Central Transmission Utility of India Limited (CTUIL)?

    1. About: CTUIL is the central transmission utility, carved out of Power Grid Corporation of India Limited, which plans the inter State transmission system and grants connectivity and general network access.
    2. Role here: CTUIL issues the notices of revocation to developers who miss milestones, and its data records the capacity at risk.

    What is financial closure?

    1. About: Financial closure is the stage at which all financing agreements for a project are signed and the conditions precedent to the first drawdown of funds are satisfied.
    2. Why it is a milestone: A project without financial closure has no committed money to build with, so it is treated as unlikely to use the connectivity it holds.

    What is the commercial operation date?

    1. About: The commercial operation date is the date from which a generating unit is declared ready to supply power commercially after successful trial operation.
    2. Regulatory use: It is the point from which tariffs, transmission charges and contractual obligations of a project become operative.

    What are Monthly Transmission Charges under the Sharing Regulations, 2020?

    1. About: Monthly Transmission Charges are the pooled cost of the inter State transmission system, recovered from all users in proportion to their use.
    2. Governing instrument: The Sharing of Inter State Transmission Charges and Losses Regulations, 2020 set the formula by which this pooled cost is allocated among users.

    Why did the regulator have to intervene?

    1. Scale of the problem: CTUIL data showed at least 5.3 GW of renewable energy capacity was expected to face connectivity revocation up to October for failure to achieve the commercial operation date.
    2. Developers approached the Commission: Several developers who had received notices from CTUIL sought additional time to achieve the milestones.
    3. Stage of the affected projects: The Commission recorded that entities seeking time are at various stages of implementation, including some at an advanced stage.
    4. Case by case disposal: The Commission had already disposed of several such cases individually, granting additional time on payment of compensation.
    5. Need for uniformity: The order records an immediate requirement to handle such cases uniformly rather than through separate individual rulings.

    What does the new compensation mechanism provide?

    1. Core change: Projects that miss key implementation deadlines retain grid connectivity and receive additional time, instead of facing automatic revocation of transmission access.
    2. Charge for land and financial closure: Developers pay Rs 1,000 per megawatt per day to obtain extra time for land documents and financial closure.
    3. Charge for delayed commissioning: Developers pay Rs 3,000 per megawatt per day for delays in starting commercial operations.
    4. Graded escalation: Compensation is levied by the specific milestone sought, with rates generally increasing over time to push early compliance.
    5. Reasons made irrelevant: The order allows additional time on payment of compensation irrespective of the reasons for the delay.
    6. The stated justification: The Commission recorded that such entities have been holding on to connectivity, described as a scarce resource, which is why the extension is priced.

    What must a developer show to qualify for an extension?

    1. Timing condition: An entity must demonstrate project progress at least 15 working days before the original milestone deadline.
    2. Land threshold for the first two milestones: For land documentation and financial closure, the developer must furnish land documents for at least 20 per cent of the required land.
    3. Land threshold for commissioning: For an extension of the commercial operation date, the developer must furnish land documents for 50 per cent to 75 per cent of the required land, depending on the project type.
    4. Extension lengths: Developers can get up to three additional months for land requirements, six months for financial closure and up to 12 months to commission the project.
    5. Consequence of a second failure: Projects that still miss the extended deadlines risk losing both grid connectivity and the associated bank guarantees.

    Where does the compensation money go?

    1. Full pass through for commissioning delay: 100 per cent of the compensation collected for delays in commercial operations is used to reduce Monthly Transmission Charges for other users.
    2. Half pass through for the other two milestones: 50 per cent of the compensation collected for additional time on land documents and financial closure is applied the same way.
    3. The governing regulation: This reduction operates under the Sharing Regulations, 2020.
    4. The economic logic: The cost of an idle transmission corridor is otherwise socialised across all users, and the charge shifts part of that cost back to the developer causing the delay.
    5. What it does not do: The transfer compensates users financially and does not release the blocked corridor capacity for another project.

    Does pricing the delay protect the grid or entrench the hoarding of a scarce resource?

    1. The case for pricing: Revoking connectivity from a project at an advanced stage destroys sunk investment and returns the corridor to a queue that may take years to reallocate.
    2. The case against: A developer who can pay the daily charge can retain a corridor for up to a further twelve months, which keeps a scarce resource locked with the least prepared applicant.
    3. The design compromise: The land thresholds of 20 per cent and 50 to 75 per cent exist to separate genuinely progressing projects from speculative applications.
    4. The unaddressed gap: Compensation is payable irrespective of the reason for delay, so a developer delayed by a land dispute and one delayed by inaction are treated identically.
    5. The underlying constraint: The real bottleneck is that transmission capacity is built ahead of generation, and neither revocation nor compensation adds a single new corridor.

    Challenges to renewable energy grid connectivity in India

    1. Transmission lagging generation: Renewable capacity is commissioned faster than the evacuation lines that must carry it. e.g. wind and solar capacity in Rajasthan and Gujarat has repeatedly outpaced the completion of the associated Green Energy Corridor lines.
    2. Land aggregation delay: Utility scale solar and wind need large contiguous parcels assembled from many private owners. e.g. projects in Rajasthan have stalled over common land and grazing land claims that block the required land documentation.
    3. Curtailment risk: Even connected projects are backed down when the grid cannot absorb their output. e.g. wind generators in Tamil Nadu have faced curtailment during high wind season for want of evacuation capacity.
    4. Weak counterparty balance sheets: Distribution companies delay payment, which raises the cost of financial closure for developers. e.g. accumulated distribution company dues to generators ran into tens of thousands of crores before the late payment surcharge rules were tightened.
    5. Storage deficit: Solar output peaks at midday while demand peaks after sunset, so firm supply needs storage that remains costly. e.g. battery energy storage tenders have repeatedly been undersubscribed or repriced upward.
    6. Module and cell supply concentration: Domestic content requirements collide with the concentration of cell manufacturing abroad. e.g. approved list of models and manufacturers requirements have forced project timeline extensions when domestic module supply fell short.
    7. Speculative bidding: Aggressive tariff bids won without the ability to execute lock up corridors and tender capacity. e.g. several record low solar tariff bids were followed by unsigned power purchase agreements and stalled projects.

    Conclusion

    Grid connectivity is a scarce public asset built ahead of demand, and the regulator has moved from confiscating it on default to pricing its continued use. The order gives projects at an advanced stage a route to survive a missed milestone, and it transfers part of the cost of the delay from all transmission users back to the delaying developer. The mechanism is now in force with rates of Rs 1,000 and Rs 3,000 per megawatt per day and defined land thresholds. The next milestone is the treatment of the 5.3 GW facing revocation up to October, which will show whether the compensation route clears the backlog or extends it.

    Renewable Energy Sector in India

    1. About: The renewable energy sector covers solar, wind, small hydro, biomass, waste to energy and, in policy terms, large hydro and nuclear are counted within the wider non fossil category.
    2. Scale: India ranks among the top five countries globally in installed renewable energy capacity, and is placed in the top four in both solar and wind capacity.
    3. Milestone achieved: Non fossil sources crossed 50 per cent of India’s total installed electricity generation capacity in 2025, ahead of the timeline pledged under the Paris Agreement.
    4. Stated target: India has committed to 500 GW of non fossil fuel based installed capacity by 2030 and to net zero emissions by 2070.
    5. Geographic concentration: Rajasthan, Gujarat, Karnataka, Tamil Nadu and Andhra Pradesh account for the bulk of installed solar and wind capacity.
    6. Structural feature: Renewable generation is variable and location bound, which makes transmission planning and storage central to the sector rather than incidental.
    7. Institutional structure: The Ministry of New and Renewable Energy frames policy, SECI acts as the central nodal agency for tenders, and CERC regulates inter State transmission and tariffs.

    Statutory Framework Governing Electricity and Grid Access

    1. Entry 38 of the Concurrent List: Places electricity in the concurrent domain, so both Parliament and State legislatures can legislate on it.
    2. Section 79 of the Electricity Act, 2003: Sets out the functions of the Central Electricity Regulatory Commission, including regulation of inter State transmission.
    3. Section 38 of the Electricity Act, 2003: Provides for the Central Transmission Utility and its duty to provide non discriminatory open access.
    4. Section 61 of the Electricity Act, 2003: Lays down the principles the regulator must follow while determining tariffs.
    5. Section 86 of the Electricity Act, 2003: Gives State Electricity Regulatory Commissions the power to fix renewable purchase obligations.
    6. Section 63 of the Electricity Act, 2003: Allows adoption of tariffs discovered through a transparent competitive bidding process.

    Laws and Rules Governing Renewable Energy and Transmission

    1. Electricity Act, 2003: The parent statute governing generation, transmission, distribution, trading and use of electricity.
    2. Open access provision: Sections 39, 40 and 42 create the right of non discriminatory open access to transmission and distribution networks.
    3. Energy Conservation Act, 2001: Provides for energy efficiency standards and designated consumers.
    4. Energy Conservation (Amendment) Act, 2022: Introduced the carbon credit trading scheme and a renewable consumption obligation for designated consumers.
    5. CERC (Connectivity and General Network Access to the inter State Transmission System) Regulations, 2022: Govern grant, milestones and revocation of connectivity, the framework this order operates under.
    6. CERC (Sharing of Inter State Transmission Charges and Losses) Regulations, 2020: Set the method for pooling and allocating transmission charges among users.
    7. Electricity (Promoting Renewable Energy Through Green Energy Open Access) Rules, 2022: Allow consumers above a threshold to buy renewable power directly through open access.
    8. Electricity (Late Payment Surcharge and Related Matters) Rules, 2022: Impose a graded surcharge on distribution company dues to generators and restrict access on default.
    9. Electricity (Rights of Consumers) Rules, 2020: Set service standards including timelines for new connections and metering.

    Back2Basics: Central Electricity Regulatory Commission (CERC)

    1. Governing Act: Constituted under the Electricity Regulatory Commissions Act, 1998 and now functions under the Electricity Act, 2003.
    2. Year established: 1998.
    3. Headquarters: New Delhi.
    4. Composition: A Chairperson and up to three other Members, with the Chairperson of the Central Electricity Authority as an ex officio Member.
    5. Jurisdiction: Regulates tariffs of central generating stations, inter State transmission, inter State trading licences and the national grid.
    6. Mandate: Sets grid standards, regulates the power market, adjudicates disputes among inter State licensees and generating companies, and advises the Union government on tariff policy.
    7. Appeal route: Its orders are appealable to the Appellate Tribunal for Electricity and thereafter to the Supreme Court on a question of law.

    Government Initiatives in the Renewable Energy Sector

    1. PM Surya Ghar Muft Bijli Yojana: Provides central financial assistance for rooftop solar installations on residential houses, targeting one crore households.
    2. PM KUSUM: Supports solarisation of agricultural pumps and installation of decentralised solar plants on barren farmland for farmers.
    3. National Green Hydrogen Mission: Aims to build green hydrogen production capacity and associated electrolyser manufacturing, with incentives under the SIGHT programme.
    4. Green Energy Corridor: Funds dedicated transmission infrastructure to evacuate renewable power from generation rich States to demand centres.
    5. Waiver of inter State transmission charges: Exempts qualifying renewable and storage projects from inter State transmission charges for a defined period to improve project viability.
    6. PLI National Programme on High Efficiency Solar Photovoltaic Modules: Supports integrated domestic manufacturing of polysilicon, ingots, wafers, cells and modules.
    7. Solar Park and Ultra Mega Solar Power Projects Scheme: Provides pre acquired land and ready evacuation infrastructure to reduce developer risk.
    8. Viability Gap Funding for Battery Energy Storage Systems: Supports grid scale storage to address the evening peak and firm up variable renewable supply.

    Key Facts about India’s Renewable Energy Sector

    1. Nodal ministry: Ministry of New and Renewable Energy, the only dedicated renewable energy ministry of its kind when created.
    2. Non fossil milestone: India reached the 50 per cent non fossil installed capacity mark five years ahead of its Paris Agreement commitment.
    3. International Solar Alliance: Headquartered at Gurugram in India, jointly initiated by India and France in 2015.
    4. Largest solar parks: Bhadla in Rajasthan and Pavagada in Karnataka are among the largest solar parks in the world.
    5. Hybrid policy: India was among the first to notify a dedicated wind solar hybrid policy to improve capacity utilisation of a single grid connection.
    6. Renewable purchase obligation: State regulators fix a minimum share of renewable power that obligated entities must buy each year.
    7. Nodal tender agency: Solar Energy Corporation of India Limited conducts the largest share of central renewable capacity auctions.

    Challenges in India’s Renewable Energy Sector

    1. Grid integration and stability: High variable renewable penetration strains frequency and voltage management. e.g. States with high solar share face a steep evening ramp when solar output drops and demand peaks.
    2. Distribution company finances: Weak buyers delay payments and refuse to sign power purchase agreements at discovered tariffs. e.g. thousands of megawatts of auctioned capacity remained without signed agreements for want of buyers.
    3. Land and environmental conflict: Large projects compete with grazing land, wildlife habitat and community rights. e.g. transmission lines in the Thar region were litigated over Great Indian Bustard mortality.
    4. Manufacturing import dependence: Cells, wafers and polysilicon remain concentrated in a few countries. e.g. India continues to import a large share of solar cells despite module capacity expansion.
    5. Storage cost: Firm and dispatchable renewable supply needs storage that is still expensive at scale. e.g. round the clock renewable tenders have discovered tariffs well above plain solar tariffs.
    6. Skilled workforce and operation and maintenance: Remote plants need trained technicians for module cleaning, inverter servicing and blade repair. e.g. offshore wind, newly tendered off Gujarat and Tamil Nadu, has almost no domestic trained workforce.
    7. Recycling and waste: End of life modules and batteries carry a hazardous waste burden not yet planned for. e.g. India has no large scale commercial solar module recycling capacity.

    Way Forward

    1. Plan transmission ahead of generation: Commission evacuation corridors on a fixed lead over auctioned capacity so connectivity ceases to be the binding constraint.
    2. Tighten entry screening: Raise land and financial readiness thresholds at the connectivity application stage rather than only at the extension stage.
    3. Differentiate causes of delay: Provide a lower compensation rate for delays caused by force majeure or by transmission side readiness, and a higher rate for developer inaction.
    4. Scale storage procurement: Expand viability gap funding and mandate storage linked capacity in new renewable tenders to smooth the evening peak.
    5. Fix the buyer side: Enforce payment security mechanisms and time bound signing of power purchase agreements after auction.
    6. Build domestic supply chains: Extend manufacturing support upstream to wafers, polysilicon and battery grade materials.
    7. Create a module and battery recycling framework: Notify extended producer responsibility for solar modules and grid batteries before the first large retirement wave.

    Matching Previous Year Question

    “[2022, GS3, 15 marks] Do you think India will meet 50 percent of its energy needs from renewable energy by 2030 ? Justify your answer. How will the shift of subsidies from fossil fuels to renewables help achieve the above objective? Explain.”

  • Ethanol Debate: Should India Bring Back E10 Alongside E20?

    Why in the News

    A public campaign claiming that E20 petrol wrecks engines and empties fuel tanks faster has been answered with test evidence showing no increased engine wear. The rebuttal has exposed the question the blending debate has avoided, which is whether pushing the blend beyond 20 percent moves land and water from food to fuel.

    What is the Ethanol Blended Petrol Programme?

    1. About: The programme mandates the blending of ethanol, an alcohol produced from crops, into petrol sold by oil marketing companies. E20 denotes a fuel that is 20 percent ethanol by volume and 80 percent petrol.
    2. Origin: It was rolled out nationally from 2003 and expanded through the National Policy on Biofuels, 2018.
    3. Feedstock routes: Ethanol is produced from sugarcane juice, B heavy and C heavy molasses, maize, damaged food grains and surplus rice.
    4. Stated objectives: It aims to cut the crude oil import bill, reduce tailpipe emissions and give cane and grain growers an assured market.
    5. Price setting: Oil marketing companies buy ethanol at administered prices that differ by feedstock route rather than at a single market price.

    What is the distinction between green water and blue water?

    1. Green water: This is rainfall held in the soil and taken up by the crop, water the field would have received in any case.
    2. Blue water: This is water drawn from rivers, canals, groundwater pumps and wells. It is the scarce component, because withdrawing it denies the same unit to another user.

    What are Distillers Dried Grains with Solubles?

    1. About: These are the residual grain solids left over after ethanol is distilled from maize or rice.
    2. Where they go: They are sold as protein rich animal feed and compete directly with soybean meal in the same market.

    Why does the charge that E20 damages engines not hold up?

    1. Lower energy density is real: Ethanol carries about two thirds the energy of petrol. A litre of E20 therefore takes a vehicle slightly less far.
    2. The size of the penalty is small: Ethanol is only a fifth of the blend, so the energy loss is around 6 to 7 percent. The 30 percent figure circulating online is wrong.
    3. Emissions improve: Carbon monoxide and unburnt hydrocarbons fall on E20, which is an environmental gain.
    4. Domestic durability testing agrees: Testing by the Automotive Research Association of India (ARAI), the petroleum institute and Indian Oil found no increased wear attributable to the blend.
    5. The fear is misplaced, the concern is not: Loss of range is not a malfunction. The genuine problem lies elsewhere in the fleet.

    Which vehicles are the genuine exception to that record?

    1. Scale of the exposed fleet: India has roughly 75 million to 80 million two wheelers built before the BS4 norms that run on carburettors.
    2. Why a carburettor cannot adjust: A carburettor cannot sense the extra oxygen the blend carries. The engine then draws too little fuel for the air it takes in and runs hot.
    3. Seal degradation is a separate defect: Older rubber seals not rated for ethanol degrade on contact with the fuel. This happens irrespective of engine temperature.
    4. Retrofitting is cheap but slow: Replacing seals with ethanol compatible ones costs little. Covering 75 million to 80 million two wheelers happens one vehicle at a time and will take years.
    5. The protection fuel went missing: The original roadmap asked that a lower blend stay on sale for these vehicles. That fuel quietly vanished from the pumps.
    6. What restoring E10 would achieve: Selling E10 alongside E20 would protect the legacy fleet while the retrofit programme catches up. It would also lower total ethanol use rather than raise it.

    Why is the edible oil import gap a better target than the crude oil bill?

    1. Scale of the crude bill: India’s crude oil import bill runs at around Rs 11 lakh crore to Rs 12 lakh crore a year.
    2. Scale of the edible oil bill: The edible oil import bill is far smaller, at roughly Rs 1.6 lakh crore to Rs 1.75 lakh crore.
    3. What E20 actually saves: Ethanol at E20 trims only 3 to 4 percent of the crude bill.
    4. The edible oil gap is closeable: India already produces about 40 percent of its cooking oil and aims to reach 72 percent by financial year 2031.
    5. The test of a good target: A gap the government can close fully and then stop subsidising is worth more than one it can only reduce at the margin forever.

    How has the shift in feedstock turned a distant trade off into a direct one?

    1. Grain now dominates the feedstock mix: Maize supplies about half of India’s ethanol. Grains together supply nearly 67 percent.
    2. Direct competition for the same fields: Maize competes with soybean, groundnut and mustard for identical acreage.
    3. First pull, the administered price: Ethanol from maize is procured at a fixed price well above the sugarcane route. That keeps maize attractive whatever the open market pays.
    4. Second pull, the feed by product: The leftover grain from distillation is sold as animal feed and undercuts soybean meal.
    5. The oilseed farmer loses twice: Weaker meal prices drag down soybean prices. The grower loses on acreage and then again on price.

    Why do the water and climate claims not settle the case for a higher blend?

    1. The headline figure mixes two things: Quoted totals of thousands of litres of water per litre of ethanol combine green water and blue water into one alarming number.
    2. Only the blue component is scarce: Rain the crop would have received anyway does not represent a withdrawal from a contested source.
    3. Where the pressure actually falls: Cane in Maharashtra and Karnataka draws heavily on already stressed rivers, canals and groundwater.
    4. What the rule should measure: A water norm for ethanol should target blue water use, not the frightening aggregate.
    5. The climate evidence is unsettled: Indian life cycle studies do not agree on whether grain ethanol is cleaner than the alternatives once cultivation and processing are counted.
    6. Consequence for the green case: The environmental argument for going beyond E20 does not survive close scientific scrutiny.

    What does experience abroad show about the limits of high ethanol blends?

    1. United States, Oak Ridge National Laboratory: The laboratory ran 86 vehicles for a cumulative 10 million kilometres on blends up to E20 and found no increased wear in cars not rated for E20.
    2. United States, multiple blends at the pump: American pumps sell E10 and E15 side by side, so owners of older vehicles retain a compatible option. This is the design India’s roadmap intended and then lost.
    3. United States, Renewable Fuel Standard: The mandate fixes volumes of renewable fuel in transport fuel. Its corn ethanol component drew sustained criticism for raising feed and food grain prices.
    4. Brazil, the Proalcool programme: Brazil built blending on sugarcane and on flex fuel vehicles able to run on any blend up to pure ethanol. The fleet, rather than the fuel specification, absorbs changes in the blend.

    Why is holding at E20 not a costless option either?

    1. Cane arrears were cleared: Ethanol demand gave sugar mills the cash flow to settle sugarcane dues owed to farmers.
    2. Rural incomes rose: The programme lifted incomes and built an assured market for cane and grain growers.
    3. Distillery capacity was built for more: Capacity now in place was created on the expectation of blends above E20.
    4. Loans were taken against expected demand: Those investments carry debt to be serviced against demand a freeze would not deliver.
    5. The sugar surplus needs an outlet: Ethanol absorbs a structural sugar surplus that would otherwise depress domestic prices.
    6. Both sides belong in the reckoning: The honest course weighs the cost of holding against the cost of advancing, rather than assuming either away.

    Why should reversibility decide the sequence of policy moves?

    1. Instruments that can change within a season: The ethanol procurement price, the protection fuel at the pump, the water rules and the import duty on edible oil can all be altered and reversed if evidence turns.
    2. The one instrument that cannot: The blend level is not reversible on the same timescale.
    3. Why the blend locks in: Once land and water are committed to fuel, cropping patterns and distillery investment are built around that commitment.
    4. The sequencing principle: Prudence says to move the reversible instruments first and hold off on the irreversible one until a thorough cost benefit analysis is complete.
    5. What the recommendation amounts to: Restore E10 for the older fleet, correct the price and water distortions favouring maize, revisit the edible oil import duty, and hold at E20.

    Challenges to the Ethanol Blended Petrol Programme

    1. Feedstock concentration in water intensive crops: Cane and maize both carry heavy irrigation demand in already stressed basins. e.g. Latur in Maharashtra received drinking water by train during the 2016 Marathwada drought while cane crushing continued in the region.
    2. Diversion of food grain to fuel: Grain routed to distilleries competes with the public distribution and feed markets. e.g. the release of surplus rice by the Food Corporation of India to distilleries was repeatedly started and stopped between 2023 and 2024 as open market rice prices rose.
    3. Material compatibility in the legacy fleet: Older engines and fuel lines were never certified for a 20 percent blend. e.g. two wheelers manufactured before the BS4 norms of 2017 use carburettors and non compliant elastomer seals.
    4. Blending logistics and evacuation: Ethanol absorbs water and cannot move through existing multiproduct petroleum pipelines. e.g. supply moves by road tanker from distillery clusters in Uttar Pradesh and Maharashtra to deficit states in the south and the east.
    5. Second generation ethanol has not scaled: Cellulosic ethanol from crop residue remains commercially fragile. e.g. the Panipat second generation bioethanol refinery based on paddy straw has struggled with feedstock aggregation since its commissioning in 2022.
    6. Administered price distortion across routes: A fixed price above the cane route pulls acreage towards maize regardless of demand. e.g. maize acreage has expanded in Bihar and Madhya Pradesh at the expense of oilseeds.
    7. Consumer trust and labelling: Buyers cannot easily tell which blend they are purchasing or whether their vehicle is rated for it. e.g. the 2026 online campaign over E20 mileage produced public demands for a lower blend option at pumps.

    Conclusion

    The engine controversy was never the real argument. The decision that matters is the blend level itself, because procurement prices, water rules, the protection fuel and import duties can be reversed within a season while committed land, cropping patterns and distillery capacity cannot. Restoring E10 for the older fleet and holding at E20 until the food versus fuel trade off is properly costed keeps every reversible option open. The unresolved question is what India chooses to grow, and what it will not be able to take back.

    Biofuels and Ethanol Blending in India

    1. About: Biofuels are liquid or gaseous fuels produced from biomass and used to substitute petroleum products in transport.
    2. Categories: They run from first generation fuels made from food crops, to second generation fuels from agricultural residue, third generation fuels from algae and fourth generation fuels using carbon capture.
    3. Blending record: Average ethanol blending rose from 1.53 percent in financial year 2014 to 20 percent in 2025, achieved five years ahead of the 2030 target.
    4. Global standing: India is among the largest ethanol producers and consumers in the world, after the United States and Brazil.
    5. Scale of the fuel base: India consumes roughly 40 million tonnes of petrol a year, which sets the size of the ethanol requirement at any given blend.
    6. Claimed gains: Official statements place foreign exchange savings from ethanol blending at over Rs 1 lakh crore since 2014.
    7. Structural feature: Ethanol is the only large scale biofuel India has commercialised, while biodiesel and compressed biogas remain far below their targets.

    Laws and Rules Governing Biofuels in India

    1. National Policy on Biofuels, 2018: Categorises biofuels, widens the permitted feedstock list and sets indicative blending targets.
    2. 2022 amendment: Advanced the 20 percent ethanol blending target to the 2025 26 ethanol supply year and permitted additional feedstocks.
    3. Industries (Development and Regulation) Act, 1951: Provides the regulatory basis for distilleries and for the Centre’s control over industrial and denatured alcohol.
    4. Judicial position: A nine judge Bench of the Supreme Court held in October 2024 that “intoxicating liquor” under Entry 8 of the State List covers industrial alcohol, preserving State regulatory power.
    5. Essential Commodities Act, 1955: Enables control over the movement, storage and pricing of molasses and ethanol.
    6. Environment (Protection) Act, 1986: Governs distillery effluent standards, including zero liquid discharge norms for molasses based units.
    7. Motor Vehicles Act, 1988 and Central Motor Vehicles Rules, 1989: Set emission norms and material compatibility requirements for vehicles rated to run on E20.
    8. Bureau of Indian Standards specifications: IS 2796 governs motor gasoline and IS 15464 governs anhydrous ethanol, with a separate notified specification for E20 fuel.

    Back2Basics: National Policy on Biofuels, 2018

    1. Nodal ministry: Ministry of Petroleum and Natural Gas.
    2. Approval and revision: Approved by the Union Cabinet in 2018 and amended in 2022.
    3. Categorisation: Divides biofuels into Basic Biofuels, meaning first generation bioethanol and biodiesel, and Advanced Biofuels, meaning second generation ethanol, municipal solid waste to drop in fuels, third generation biofuels and bio compressed natural gas.
    4. Permitted raw materials for ethanol: Sugarcane juice, sugar beet, sweet sorghum, corn, cassava, damaged food grains such as wheat and broken rice, and rotten potatoes unfit for human consumption.
    5. Blending targets: 20 percent ethanol in petrol and 5 percent biodiesel in diesel by 2030, with the ethanol target later advanced to the 2025 26 supply year.
    6. Surplus grain clause: Allows use of surplus food grains for ethanol production with the approval of the National Biofuel Coordination Committee, chaired by the Minister of Petroleum and Natural Gas.
    7. Financial support: Provides viability gap funding for second generation ethanol refineries and additional incentives for advanced biofuels.

    Government Initiatives for Biofuels and Ethanol

    1. Ethanol Blended Petrol Programme, 2003: Mandates blending of ethanol in petrol supplied by oil marketing companies across notified states and Union Territories.
    2. Pradhan Mantri JI-VAN Yojana, 2019: Provides viability gap funding to commercial and demonstration second generation bioethanol projects using lignocellulosic biomass.
    3. SATAT initiative, 2018: Sustainable Alternative Towards Affordable Transportation invites entrepreneurs to set up compressed biogas plants and sell the output to oil marketing companies.
    4. GOBARdhan scheme: Converts cattle dung and agricultural waste into biogas and organic manure, targeted at rural households and dairy clusters.
    5. Ethanol Interest Subvention Scheme: Subsidises interest on loans taken by sugar mills and standalone distilleries to expand ethanol capacity.
    6. Global Biofuels Alliance: Launched at the G20 New Delhi Summit in September 2023 with India, the United States and Brazil as founding members, to accelerate global biofuel trade and technology transfer.
    7. National Mission on Edible Oils, Oil Palm, 2021, and the Oilseeds Mission: Target domestic self sufficiency in cooking oil, which is the competing claim on the same land the ethanol programme draws from.

    Key Facts about Ethanol Blending

    1. World Biofuel Day is observed on 10 August, marking the day in 1893 an engine was run on peanut oil by Rudolf Diesel.
    2. The Ethanol Supply Year runs from 1 November to 31 October, not the financial year.
    3. E20 is 20 percent ethanol by volume, E85 is 85 percent, and E100 denotes ethanol used as a standalone fuel.
    4. India achieved 20 percent average blending in 2025, five years ahead of the 2030 target set in the 2018 policy.
    5. Flex fuel vehicles are engineered to run on any blend up to E85 or E100 without modification.
    6. Ethanol procurement uses differential administered prices by feedstock route, with the sugarcane juice route priced highest among cane routes.
    7. The National Biofuel Coordination Committee clears the use of surplus food grains for ethanol.

    Challenges in the Biofuel Sector

    1. Biodiesel blending has barely moved: Against a 5 percent target, biodiesel blending has remained close to negligible. e.g. used cooking oil collection under the Repurpose Used Cooking Oil initiative covers only a fraction of India’s restaurant and hotel supply chain.
    2. Sugar cycle volatility disrupts contracts: Ethanol supply from cane is hostage to sugar availability decisions taken mid season. e.g. the 2023 restriction on diverting cane juice to ethanol was imposed to protect domestic sugar supply and stranded distillery offtake plans.
    3. Centre and State conflict over alcohol regulation: Regulatory authority over industrial alcohol is contested and affects distillery licensing. e.g. the Supreme Court’s nine judge ruling of October 2024 held that States retain power over industrial alcohol under Entry 8 of the State List.
    4. Compressed biogas offtake and evacuation: Plant commissioning lags the announced targets because feedstock aggregation and gas evacuation are unresolved. e.g. SATAT set a target of 5,000 compressed biogas plants and actual commissioning has run far behind.
    5. Water footprint of the feedstock base: Blending demand is concentrated in crops grown in drought prone tracts. e.g. Maharashtra’s cane belt draws on stressed groundwater in districts that carry recurring drought declarations.
    6. Vehicle fleet compatibility lag: Only recent vehicles are certified for the mandated blend. e.g. only vehicles manufactured from April 2023 are E20 material compliant, leaving the older fleet dependent on a lower blend that is no longer sold.
    7. Absence of a settled national life cycle assessment: Without an agreed carbon accounting method, the climate benefit claimed for each blend level cannot be verified. e.g. Indian studies differ on whether maize ethanol lowers emissions once fertiliser and processing energy are counted.

    Way Forward

    1. Restore a lower blend at the pump: Sell E10 alongside E20 nationally until the retrofit of pre BS4 two wheelers is substantially complete.
    2. Correct the administered price: Reprice ethanol by feedstock so that maize does not carry an artificial advantage over oilseeds.
    3. Regulate blue water, not aggregate water: Set distillery and feedstock water norms on measured groundwater and canal withdrawal, with metering at the distillery gate.
    4. Fund oilseed self sufficiency: Direct the incentive structure towards closing the edible oil import gap, which is smaller and fully closeable.
    5. Scale second generation ethanol: Build residue aggregation networks so that paddy straw and bagasse substitute for grain feedstock.
    6. Mandate flex fuel capability: Require new vehicles to be flex fuel rated so that future blend changes are absorbed by the fleet rather than by the fuel specification.
    7. Publish a national cost benefit study: Complete a transparent food versus fuel accounting, covering land, blue water and life cycle emissions, before any move to E27 or E30.

    “[2020] According to India’s National Policy on Biofuels, which of the following can be used as raw materials for the production of biofuels?
    1. Cassava
    2. Damaged wheat grains
    3. Groundnut seeds
    4. Horse gram
    5. Rotten potatoes
    6. Sugar beet
    Select the correct answer using the code given below:
    (a) 1, 2, 5 and 6 only
    (b) 1, 3, 4 and 6 only
    (c) 2, 3, 4 and 5 only
    (d) 1, 2, 3, 4, 5 and 6

  • States convert free-power subsidy into capital support for rooftop solar under PM Surya Ghar’s Utility-Led Aggregation model

    Why in the News

    States such as Uttar Pradesh, Andhra Pradesh and Bihar are shifting recurring free-power subsidies towards one-time capital support for rooftop solar under the Utility-Led Aggregation (ULA) model.

    What is PM Surya Ghar Yojana?

    • Ministry: Ministry of New and Renewable Energy (MNRE)
    • Launch: 13 February 2024
    • Target: 1 crore households with grid-connected rooftop solar by March 2027.
    • Outlay: ₹75,021 crore.
    • Benefit: Up to 300 units of free electricity per month.
    • Central subsidy: ₹30,000/kW up to 2 kW, plus ₹18,000 for the third kW, capped at ₹78,000.
    • Eligibility: Household must have a suitable roof and grid connection.

    What is ULA?

    • Utility-Led Aggregation (ULA) is a model where the distribution company (DISCOM) aggregates household demand and arranges rooftop solar installations at scale.
    • States convert recurring electricity subsidies into one-time capital support for installing solar systems.

    Why the Shift?

    • Reduces recurring State subsidy burden.
    • Creates a 25-year generating asset.
    • Reduces DISCOM’s cost of supplying subsidised daytime electricity.
    • Aggregated procurement can reduce installation costs.

    Current Progress

    • 52 lakh households had installed rooftop systems by 13 August.
    • About 2 lakh of 30 lakh ULA installations are complete.
    • Target: 1 crore households by March 2027.

    Key Definitions

    • Rooftop Solar: Solar photovoltaic system installed on a building roof and connected to the electricity distribution network.
    • Net Metering: Allows surplus rooftop electricity exported to the grid to be adjusted against electricity consumed.
    • DISCOM: Distribution Company responsible for electricity distribution.
    • ALMM: Approved List of Models and Manufacturers for eligible solar modules.

    Challenges

    • Financial stress of DISCOMs
    • High upfront installation costs
    • Limited rooftop access for tenants and apartment residents
    • No battery-storage subsidy
    • Grid and transformer capacity constraints
    • Dependence on imported solar cells and wafers

    “[2025] Consider the following statements about ‘PM Surya Ghar Muft Bijli Yojana’:

    I. It targets installation of one crore solar rooftop panels in the residential sector.

    II. The Ministry of New and Renewable Energy aims to impart training on installation, operation, maintenance and repairs of solar rooftop systems at grassroot levels.

    III. It aims to create more than three lakhs skilled manpower through fresh skilling and up-skilling, under scheme component of capacity building.

    Which of the statements given above are correct?

    (a) I and II only

    (b) I and III only

    (c) II and III only

    (d) I, II and III.

  • For energy security, the way forward is not public or private, but both

    Why in the News

    India’s ethanol blending has reached 20%, ahead of the 2030 target. It has displaced 310 lakh tonnes of imported crude, saved over ₹1.90 lakh crore in foreign exchange and transferred over ₹1.6 lakh crore to farmers.

    What is the Ethanol Blended Petrol (EBP) Programme?

    • EBP: Ethanol Blended Petrol Programme blends ethanol, mainly produced from sugarcane and grains, with petrol.
    • E20: 20% ethanol blending has been achieved ahead of schedule.
    • Benefits: Reduces crude imports, supports farmers and lowers emissions.

    What are Strategic Petroleum Reserves (SPR)?

    • SPR: Strategic Petroleum Reserves are underground crude oil storage facilities used as an insurance against supply disruptions.
    • They provide a temporary buffer and must eventually be replenished.

    What has Ethanol Blending Achieved?

    • 20% blending achieved.
    • 310 lakh tonnes of crude imports displaced.
    • ₹1.90 lakh crore+ foreign exchange saved.
    • ₹1.6 lakh crore+ transferred to farmers.
    • 930 lakh tonnes+ CO₂ emissions avoided.

    Why Both Public and Private Players?

    • ONGC: Oil and Natural Gas Corporation, a major state-owned upstream producer.
    • OIL: Oil India Limited, another major state-owned upstream producer.
    • Public sector: Provides strategic control and supports national energy security.
    • Private sector: Brings capital, technology and efficiency into exploration, production and storage.
    • Balanced approach: India needs both strategic public capacity and competitive private participation.

    How Do Reserves and Domestic Production Complement Each Other?

    • SPR: Protects against sudden supply shocks.
    • Domestic production: Reduces imports over the life of an oil field.
    • Overseas stocks: Long-term suppliers could maintain crude stocks earmarked for India.
    • Exploration: Opening more offshore areas can expand domestic resources.

    Energy Security in India

    • Energy security means reliable and affordable energy supply with resilience against disruptions.
    • Four pillars:
      • Domestic production
      • Strategic reserves
      • Import diversification
      • Alternative fuels

      India’s high crude import dependence exposes it to global price shocks and disruptions in chokepoints such as the Strait of Hormuz and Bab el-Mandeb.

      Key Government Initiatives

      • EBP: Ethanol Blended Petrol Programme.
      • NBP: National Policy on Biofuels, 2018.
      • PM JI-VAN: Pradhan Mantri JI-VAN Yojana, promoting 2G (second-generation) ethanol from agricultural residues.
      • SATAT: Sustainable Alternative Towards Affordable Transportation, promoting compressed biogas.
      • SPR Programme: Strategic Petroleum Reserves Programme for crude oil security.

      [2025] Consider the following statements:

      Statement I: Of the two major ethanol producers in the world, i.e., Brazil and the United States of America, the former produces more ethanol than the latter.

      Statement II: Unlike in the United States of America, where corn is the principal feedstock for ethanol production, sugarcane is the principal feedstock for ethanol production in Brazil.

      Which one of the following is correct in respect of the above statements?

      (a) Both Statement I and Statement II are correct and Statement II is the correct explanation for Statement I

      (b) Both Statement I and Statement II are correct and Statement II is not the correct explanation for Statement I

      (c) Statement I is correct but Statement II is incorrect

      (d) Statement I is incorrect but Statement II is correct

    1. GEC third phase in final stages, up for Cabinet approval

      Why in the News?

      The government is in the final planning stages of the third phase of the intra-state Green Energy Corridor (GEC) and has sent the scheme to the Union Cabinet for approval. The phase carries an outlay of more than Rs 50,000 crore and targets the evacuation of about 135 gigawatts (GW) of renewable energy, marking a shift towards strengthening transmission from renewable-energy rich States.

      What is the Green Energy Corridor (GEC)?

      1. Renewable evacuation network: GEC is a scheme to build transmission infrastructure that carries electricity from renewable-energy rich areas to demand centres.
      2. Grid synchronisation: It links variable solar and wind generation with conventional power stations in the grid so that renewable power can be evacuated reliably from one location to another.

      What does GEC Phase III propose?

      1. Cabinet stage: The third phase has been sent to the Union Cabinet for final approval.
      2. Outlay: The scheme carries an outlay of more than Rs 50,000 crore.
      3. Evacuation target: The Ministry of New and Renewable Energy (MNRE) aims to evacuate about 135 GW of renewable energy in this phase.
      4. Focus area: The phase concentrates on augmenting intra-state transmission lines in renewable-energy rich States.

      Why have earlier phases faced delays?

      1. Right of way: Difficulty in securing right of way for transmission lines held up Phase I.
      2. Award delays: Delay in awarding project packages slowed progress.
      3. Forest clearances: Delays in forest clearances stalled work.
      4. Great Indian Bustard clearances: Clearances tied to the protection of the critically endangered Great Indian Bustard (GIB), whose habitat overlaps solar and wind zones in Rajasthan and Gujarat, delayed Phase I.
      5. State and regulatory issues: Non-participation of States during tendering, tender consultation and regulatory issues affected Phase II.

      Conclusion:

      GEC Phase III awaits Cabinet clearance and, if approved, will extend intra-state transmission capacity to evacuate about 135 GW of renewable power. With most Phase II packages already awarded and expected to complete within two years, the next milestone is Cabinet approval and the resolution of recurring right-of-way, forest and GIB clearance bottlenecks that have delayed earlier phases.

      Back2Basics: Green Energy Corridor (GEC) Scheme

      1. Ministry: Ministry of New and Renewable Energy.
      2. Objective: Build intra-state and inter-state transmission systems to evacuate renewable power.
      3. Structure: Implemented in phases, with intra-state components handled by State transmission utilities.
      4. Support: Funded through a mix of central grants, State contributions and multilateral loans.
      5. Beneficiaries: Renewable-energy rich States and the wider grid.

      About Renewable Energy Transmission in India

      1. Definition: Renewable energy transmission moves power generated from solar, wind and other renewable sources to consumption centres across States.
      2. Why it matters: Renewable generation is concentrated in a few resource-rich States, so evacuation infrastructure is essential to avoid stranded capacity.
      3. India’s standing: India is among the world’s largest renewable energy markets and has set large capacity addition targets for 2030.
      4. Structural feature: Variable renewable output requires grid balancing with conventional and storage capacity.

      Government Initiatives for Renewable Energy

      1. National Solar Mission: Promotes large-scale solar deployment under the National Action Plan on Climate Change.
      2. PM-KUSUM: Supports solar pumps and grid-connected solar for farmers.
      3. PM Surya Ghar: Muft Bijli Yojana: Promotes rooftop solar for households.
      4. Production Linked Incentive for solar modules: Builds domestic solar manufacturing capacity.
      5. Green Hydrogen Mission: Promotes production of green hydrogen using renewable power.

      Key Facts about India’s Renewable Energy Sector

      1. 2030 target: India aims for 500 GW of non-fossil fuel electricity capacity by 2030.
      2. Nodal ministry: Ministry of New and Renewable Energy.
      3. Grid operator: Grid Controller of India manages national load dispatch.
      4. Species overlap: The Great Indian Bustard is a critically endangered species whose habitat intersects renewable zones, driving clearance conditions.

      Challenges in Renewable Energy Transmission

      1. Land and right of way: Acquiring land and corridors for transmission lines is slow and contested.
      2. Clearance delays: Forest and wildlife clearances, including GIB-related conditions, hold up projects.
      3. State coordination: Uneven State participation in tendering and implementation delays intra-state work.
      4. Grid integration: Variable renewable output strains grid stability without adequate balancing.
      5. Financing and viability: Distribution company finances and cost recovery remain weak.
      6. Storage gap: Limited storage capacity constrains round-the-clock renewable supply.

      Way Forward

      1. Fast-track clearances: Streamline forest and wildlife clearances with mitigation for GIB habitat, including undergrounding of lines where feasible.
      2. Strengthen State participation: Improve incentives and coordination for State utilities in tendering.
      3. Expand storage: Scale up battery and pumped-hydro storage alongside transmission.
      4. Timely awards: Reduce delays in awarding and executing project packages.
      5. Grid modernisation: Invest in smart grids and forecasting to manage variable generation.

      PYQ Relevance

      [UPSC 2022] Do you think India will meet 50 percent of its energy needs from renewable energy by 2030? Justify your answer. How will the shift of subsidies from fossil fuels to renewables help achieve the above objective? Explain.

      Linkage: The PYQ examines India’s transition towards renewable energy and the challenges in achieving its 2030 targets. GEC Phase III strengthens renewable energy evacuation and grid infrastructure.
      This supports India’s 2030 renewable-energy targets.

    2. India crosses 300 GW of non-fossil power capacity

      Why in the News

      India’s non-fossil fuel capacity has crossed 300 GW, achieving about 60% of the 500 GW target for 2030. The key challenge is converting installed capacity into actual electricity generation.

      What is the 500 GW Target?

      1. Panchamrit pledge: India committed at COP26, Glasgow (2021) to achieve 500 GW of non-fossil electricity capacity by 2030.
      2. Coverage: Includes solar, wind, hydro and nuclear capacity.
      3. Not total capacity: It excludes fossil-fuel capacity such as coal and gas.

      Why Capacity ≠ Generation?

      1. Capacity factors: Solar and wind are intermittent, so installed capacity does not translate proportionately into electricity generated.
      2. Storage gap: Batteries and pumped-storage hydropower are needed to provide reliable renewable power.
      3. Grid constraints: Transmission and grid-balancing infrastructure must expand alongside renewable capacity.
      4. Peak demand mismatch: Renewable generation may not coincide with periods of highest electricity demand.

      Value Addition

      • Panchamrit: 500 GW non-fossil capacity by 2030; 50% energy requirements from renewables; reduce projected carbon emissions by 1 billion tonnes; reduce emissions intensity by 45%; achieve net zero by 2070.
      • Key challenge: Shift from capacity addition → reliable, dispatchable clean power.

      “[2022, GS3, 15 marks] Do you think India will meet 50 percent of its energy needs from renewable energy by 2030? Justify your answer. How will the shift of subsidies from fossil fuels to renewables help achieve the above objective? Explain.”

      [2026] Consider the following statements with reference to India’s response to climate change:
      I. India’s Long-Term Low Emission Development Strategy (LT-LEDS) is a crucial tool for achieving net-zero emissions by 2070
      II. India’s 4th Biennial Update Report (BUR-4) submitted in December, 2024 recorded around 8% decrease in Greenhouse gas emissions in 2020 over 2019.
      III. Climate-resilient development necessarily depends on quick and short-term achievement of emission reduction targets.
      Which of the following relationships among the above statements is/are correct?
      1. Statement I is empirically supported by statement II.
      2. Statement III contradicts the approach implicit in statement I.
      3. Statement I and statement III together establish the premise of long-term sustainability.
      Select the answer using the code given below:

      [A] 1 only

      [B] 1 and 2

      [C] 2 and 3

      [D] 3 only

    3. AI data centres’ power load to nearly double government’s earlier estimate

      Why in News

      The Ministry of Power informed Parliament that AI-driven data centres are expected to add 26.3 GW of electricity demand by 2031-32, nearly double the earlier estimate of 13.56 GW. The additional demand is proposed to be met primarily through renewable energy.

      Key Highlights

      • Revised estimate: Additional power load projected at 26.3 GW by 2031-32, up from 13.56 GW estimated earlier.
      • Renewable-powered growth: The government plans to meet most of this demand through renewable energy.
      • Rapid expansion: India’s data centre capacity is projected to increase from 2.2 GW (2025) to 12 GW by 2030 (Wood Mackenzie).
      • Digital economy: India’s digital economy is valued at around ₹32 lakh crore, contributing nearly 12% of GDP.
      • AI demand: Growth is being driven by Generative AI, cloud computing, big data analytics, fintech, e-commerce and digital public infrastructure.

      Why Do AI Data Centres Consume So Much Power?

      • AI model training requires high-performance GPUs and specialised chips.
      • Large-scale 24×7 computing and data processing significantly increase electricity demand.
      • Cooling systems account for a substantial share of total energy consumption.
      • Continuous operation requires high reliability and uninterrupted power supply.

      Significance

      • Strengthens India’s position as a global digital and AI hub.
      • Encourages investment in renewable energy, grid infrastructure and energy storage.
      • Supports growth of Digital India, semiconductor manufacturing and cloud services.
      • Creates employment in IT, engineering, power and infrastructure sectors.

      [2022, GS3, 15M] Do you think India will meet 50 percent of its energy needs from renewable energy by 2030? Justify your answer. How will the shift of subsidies from fossil fuels to renewables help achieve the above objective? Explain.”

      [2020] With the print state of development, Artificial Intelligence can effectively do which of the following?
      1. Bring down electricity consumption in industrial units
      2. Create meaningful short stories and songs
      3. Disease diagnosis
      4. Text -to -Speech Conversion
      5. Wireless transmission of electrical energy
      Select the correct answer using the code given below:

      [A] 1, 2, 3 and 5 only

      [B] 1, 3 and 4 only

      [C] 2, 4 and 5 only

      [D] 1, 2, 3, 4 and 5

    4. India’s Renewable Energy Installed Capacity Nearly Quadruples Since 2014

      Why in News?

      The Union Government informed the Rajya Sabha that India’s installed renewable energy (RE) capacity has increased from 76.38 GW in 2014 to 288.58 GW (as of 30 June 2026), marking nearly a fourfold increase.

      Key Highlights

      • India’s total renewable energy installed capacity reached 288.58 GW by 30 June 2026.
      • Solar power contributes the largest share with 162.15 GW.
      • Wind power accounts for 57.44 GW.
      • Hydro power contributes 57.24 GW.
      • Bio power contributes 11.75 GW.

      Non-Fossil Fuel Electricity Capacity

      • Total installed non-fossil fuel electricity capacity stands at 297.36 GW.
      • It comprises: 288.58 GW from renewable energy. 8.78 GW from nuclear power.

      Investment in Renewable Energy (FY 2014 to FY 2026)

      • The renewable energy sector attracted USD 45.72 billion in Foreign Direct Investment (FDI).
      • Domestic financial institutions deployed ₹12.32 lakh crore towards the sector.
      • Major financing institutions include IREDA, PFC, REC, IIFCL, NaBFID, SIDBI, along with 12 Public Sector Banks.

      Significance

      • Solar energy has become India’s largest renewable energy source.
      • Strengthens India’s progress towards its Nationally Determined Contributions (NDCs) and Net Zero by 2070 target.
      • Improves energy security by reducing dependence on imported fossil fuels.
      • Encourages green jobs, private investment, and domestic manufacturing.
      • Supports the growth of emerging sectors such as Green Hydrogen and battery storage.

      Challenges

      • Integrating intermittent renewable energy into the power grid.
      • Scaling up energy storage infrastructure.
      • Land acquisition and transmission bottlenecks.
      • Financial stress of power distribution companies (DISCOMs).

      [2022] Consider the following statements:
      1. Gujarat has the largest solar park in India.
      2. Kerala has a fully solar powered International Airport.
      3. Goa has the largest floating solar photovoltaic project in India.
      Which of the statements given above is/are correct?

      [A] 1 and 2

      [B] 2 only

      [C] 1 and 3

      [D] 3 only

    5. India’s Green Transition Is Missing Long-Duration Energy Storage

      Why in the News?

      India recorded its highest-ever electricity peak demand of 270.8 GW on May 21, exposing gaps in the country’s storage architecture during periods of low renewable generation. This has sharpened focus on long-duration energy storage (LDES), a category entirely absent from India’s current national storage planning framework despite its technologies and resource potential already existing.

      Why did India’s existing storage roadmap prove inadequate against actual demand patterns?

      1. Record peak demand: India recorded its highest-ever peak electricity demand of 270.8 GW on May 21. This is an increase of approximately 90 GW over the same period in 2019.
      2. Dual demand peaks: Power generators typically meet India’s summer daytime peak. Demand rises again at night, driven largely by air conditioner use, precisely when solar generation is unavailable.
      3. Roadmap’s duration ceiling: The 2026 Long-Term National Resource Adequacy Plan envisages 80 GW of battery energy storage and 94 GW of Pumped Hydroelectric Energy Storage (PHES) by FY2035-36. These translate to average discharge durations of roughly 4 hours and 6 hours, respectively.
      4. Adverse-weather gap: Four-to-six-hour storage can manage routine daily demand swings. It cannot sustain the grid through prolonged low-generation events such as heatwaves.

      What technologies make up India’s Long-Duration Energy Storage (LDES) landscape, and how do they compare?

      1. Definition: LDES refers to technologies that store energy and discharge it as power or thermal energy over extended periods, ranging from 8 hours to days, weeks, or seasons.
      2. Functional distinction: Short-duration storage systems discharge for under 8 hours and smooth intra-day demand fluctuations. LDES instead balances supply and demand over prolonged periods, eases grid congestion, and adds resilience.
      3. Pumped Hydroelectric Energy Storage (PHES): PHES remains the technology benchmark. It has mature infrastructure and an energy efficiency of 70-80%.
      4. Compressed-Air Energy Storage (CAES): CAES has a similar level of market readiness to PHES. Its efficiency is slightly lower, at 40-70%.
      5. Thermal and hydrogen storage: Thermal storage offers the longest discharge duration among developed technologies, around 200 hours, with 55-90% efficiency. Hydrogen-based storage can discharge for up to 1,000 hours but remains inefficient.
      6. Vanadium flow batteries and emerging tech: Vanadium flow batteries are commercially ready, come in different sizes, and deliver 80-85% efficiency across 10-24 hour durations. Iron-air batteries are an emerging technology still under development.

      Why do cost and site constraints limit LDES deployment despite its technical readiness?

      1. Duration-cost relationship: Longer discharge duration improves a technology’s economics. Storing more energy simultaneously raises total costs, making short-duration systems uncompetitive beyond six hours of discharge.
      2. Cheapest options: PHES and CAES are currently the most cost-effective and commercially viable LDES technologies, at $0.12/kWh and $0.10/kWh respectively, per a Pacific Northwest National Laboratory study.
      3. Site dependency of PHES: PHES needs two water reservoirs at different heights, adequate land, and sufficient height difference for water to generate force when released.
      4. Site dependency of CAES: CAES needs large underground spaces, such as salt caverns or depleted gas fields, that can safely hold high-pressure air without leaking.
      5. Site-flexible alternatives: Where such geological or land conditions are unavailable, hydrogen, thermal storage, or vanadium flow batteries are more suitable, since they depend less on specific land, water, or subterranean conditions.

      What do international institutional and regulatory models demonstrate about accelerating LDES investment?

      1. LDES Council (international industry body): This body brings together industry leaders, technology developers, investors, and policymakers to accelerate LDES innovation and commercialisation. It projects a significant decline in LDES costs by 2030.
      2. United States-Pacific Northwest National Laboratory: This research body, under the U.S. Department of Energy, benchmarked PHES and CAES as the most cost-effective LDES technologies at present.
      3. California-Public Utilities Commission: California’s primary utility regulator has set an LDES procurement target of 2 GW, to be deployed between 2031 and 2037.
      4. United Kingdom- investor revenue guarantee: The U.K. has launched a financial framework guaranteeing LDES projects a minimum revenue even in poor market conditions, to unlock investment and accelerate deployment.

      Where does India currently stand on LDES resource potential and deployment?

      1. PHES potential: A 2026 Central Electricity Authority report placed India’s PHES potential at about 267 GW.
      2. Planned PHES capacity: India plans to install PHES projects with an aggregate capacity of 100.8 GW by 2035-36. Of this, 11.6 GW is currently under construction.
      3. CO2 battery pilot: In early 2025, India launched a 160-MWh carbon dioxide battery storage system at NTPC Kudgi, Karnataka. It cycles carbon dioxide between liquid and gas phases and has an operational life exceeding 25 years.
      4. Vanadium flow pilot: India inaugurated its first MWh-scale vanadium redox flow battery system, a 3-MWh facility at NTPC Greater Noida.

      Why does India’s national storage planning still not recognise LDES as a category?

      1. Resource Adequacy Plan silence: The Long-Term National Resource Adequacy Plan acknowledges the general role of energy storage in grid reliability. It does not specifically recognise the need for LDES.
      2. National Electricity Plan silence: The National Electricity Plan projects capacities for battery energy storage systems and PHES. It provides no technology-specific assessments or deployment pathways for LDES.
      3. Capability-recognition gap: India already has a 267 GW PHES resource base and functioning LDES pilot projects. National planning documents do not treat LDES as a distinct storage category requiring its own targets or provisions.

      What policy and institutional measures would close India’s LDES planning gap?

      1. Framework integration: LDES should be incorporated into the Ministry of Power’s National Framework for Promoting Energy Storage Systems, with guidelines on its deployment and grid integration.
      2. Technology-specific planning: Future planning exercises should estimate LDES requirements and identify technologies suited to India’s extreme weather and geography, rather than treating storage as a single undifferentiated category.
      3. Clearances and regulatory classification: Faster environmental and land clearances, transmission alignment, and clear regulatory classification of LDES technologies are needed to unlock investment.
      4. Technology-agnostic incentives: The incentive structure, including subsidies and viability-gap funding, must be technology-agnostic and incentivise co-location with data centres. As the market matures, the focus must shift to long-term revenue contracts, tariff structures, and procurement frameworks.
      5. Capacity building: Dispatch centres need staff trained in optimal dispatch, multi-day charge-discharge decisions, and state-of-charge management across seasons, supported by clear protocols for LDES.

      Conclusion

      India’s storage roadmap treats energy storage as a short-duration, hourly balancing problem, while a renewables-heavy grid increasingly requires multi-day resilience. LDES technologies and resource potential already exist in India; what is missing is formal policy recognition, technology-specific planning, and an incentive architecture built around them. Unless LDES is written into national storage planning documents, India’s clean energy transition will remain dependent on favourable weather and market conditions rather than assured grid reliability.