NEWS: Despite years of renewable energy growth, India remains vulnerable to global energy price shocksà Recent West Asia conflict escalation exposed this vulnerability again

India's Renewable Growth — The Good News

•        Since 2017, renewables = largest share of new power capacity additions

•        Renewables = 42.4% of installed capacity (March 2026) — up from just 0.72% in March 2005

•        Coal's share in installed capacity fell from 58.7% → 42.2%

•        On paper, India looks well into an energy transition

The Real Problem — Capacity vs Generation Gap

•        Renewables = 42%+ of installed capacity BUT generated only 15.8% of electricity (April 2026)

•        Coal still generates 71.8% of electricity (only slightly down from 76.2% in March 2019)

•        Renewables are being added on top of coal, not replacing it

•        India has added almost no new fossil fuel capacity since 2018 but also retired very few old coal plants

Why Coal Cannot Be Replaced Yet — Structural Reasons

•        Solar and wind are intermittent — output depends on weather and time of day

•        Electricity demand is continuous and constant

•        No large-scale battery storage available yet

•        Grids are not flexible enough to handle full renewable integration

•        Coal provides baseload reliability — the backbone of the power system

Economic Impact

•        Indian electricity prices are linked to global fossil fuel markets (move alongside Brent crude)

•        Spike in crude prices → raises coal prices → electricity tariffs → inflation → fiscal pressure

•        Even "domestic" sectors are indirectly exposed to global commodity cycles

Global Comparison

•        China — oil and gas = only 4% of power mix;

•        EVs and hybrids = 50%+ of new car sales → reduced oil demand by 1 million barrels/day

•        Spain — broke the gas-electricity price link through renewables

•        India's transition is real but incomplete

What India Needs to Do Next

•        Move beyond capacity creation → towards system transformation

•        Invest in: 

o   Battery storage infrastructure

o   Grid modernisation

o   Transmission connectivity

o   Market mechanisms for integrating intermittent renewables

•        Recognise coal's stabilising function in the grid — it cannot be removed overnight

•        Goal: Build a system where renewables can reliably substitute coal in actual generation