High costs, land delays and grid constraints in scaling up renewable energy: Economic survey

NEW DELHI: While the share of non-fossil sources in India’s installed power capacity is rising, the Economic Survey flagged high capital costs, land acquisition delays, and limited grid availability as key challenges to scaling up capacity further.

The report said renewable energy systems such as solar and wind are highly material-intensive and require capital-intensive energy storage technologies for grid integration. Material and storage requirements, it noted, are the two main constraints to wider adoption. The material challenge extends beyond access to critical minerals, with implications for mining and energy needs for material processing.




India recorded a landmark year in its clean energy journey in 2025, with non-fossil fuels adding 49.2 GW during the calendar year. This took total renewable energy capacity to 266.8 GW, a 22.6% increase from 217.6 GW in 2024. Sustaining this momentum, the survey said, would require innovative financing and more efficient project execution. India has set a target of achieving 500 GW of non-fossil energy capacity by 2030.

To ensure supply stability, especially during peak demand, the survey recommended large-scale deployment of battery energy storage systems and pumped storage hydropower. These technologies can store excess electricity and release it during peak periods, enabling reliable, large-scale adoption of renewables. However, the report noted that this would involve substantial investment. According to the Central Electricity Authority, India will need about 336 GWh of energy storage capacity by 2029-30 and 411 GWh by 2031-32.

The survey also highlighted metals such as lithium, cobalt, nickel, copper, and rare earth elements as strategic chokepoints shaping the low-carbon transition and energy security.

It further called for improved sharing of power-related data among utilities, regulators, and other stakeholders through the India Energy Stack, launched in 2025. The document noted that the renewable energy transition also has the potential to create livelihoods and income opportunities for millions of small energy producers.