THE NEXT TEST FOR RENEWABLE ENERGY: MAKING CLEAN ENERGY RELIABLE, SECURE AND DIGITAL

10 Nov 2026

Tags: Environment   Climate Change   Adaptation strategies

Source: The Hindu

Context

• India hosted the Bharat Renewable Energy Summit, highlighting its progress in achieving near-universal household electrification and developing the world's third-largest renewable energy capacity.
• Türkiye is hosting COP31, with Australia holding the presidency of climate negotiations.
• COP31 hosts have proposed the ‘35 by 35’ global electrification target, aiming to increase electricity's share in global final energy consumption to 35% by 2035.
• The next challenge is not merely expanding renewable energy capacity but ensuring its reliability, energy security and digital integration.

Global Renewable Energy Scenario

• Installed capacity: Global renewable energy capacity reached 5,149 GW in 2025, with 692 GW added during the year; nearly 97% of additions came from solar and wind.
• Uneven deployment: China accounted for nearly two-thirds of global renewable capacity additions, while Africa contributed only 1.6%.
• Energy access gap: Around 560 million people in Sub-Saharan Africa still lack access to electricity.
• Growth: Global renewable energy capacity has increased by approximately 80% since 2020.
• Tripling target: Despite rapid expansion, the goal of tripling global renewable energy capacity by 2030 remains difficult to achieve.

Emerging Challenges in Renewable Energy Transition

• Grid infrastructure: Existing electricity grids and markets, designed for centralised fossil-fuel power plants, are inadequate for efficiently transmitting and distributing decentralised renewable energy.
• Supply-chain concentration: Cleantech intellectual property and manufacturing supply chains are concentrated in a few countries, creating energy security concerns.
• Rising AI demand: Rapid growth in Artificial Intelligence (AI) and data centres is increasing electricity and water demand, creating additional pressure on energy systems.
• Core challenge: The transition must shift from merely increasing renewable capacity to ensuring that renewable energy is reliable, secure and digitally managed.

Making Renewable Energy Reliable

• Energy storage gap: India's installed battery storage capacity stood at only around 9 GWh in mid-2026, with most additions occurring in the first half of 2026.
• Contractual limitations: Most power contracts pay for electricity delivered rather than flexibility, reliability and dispatchability, increasing the risk of underutilised renewable capacity and financial burdens on distribution companies and consumers.
• Market reforms: Move beyond long-term 25-year contracts towards real-time electricity trading and Contracts for Difference (CfD).
• Technology-neutral auctions: Conduct auctions based on integrated energy-system requirements rather than focusing on individual technologies.
• Infrastructure reforms: Reduce delays in project approvals and grid connections.

Grid Investment and India's Initiatives

• Global requirement: The International Renewable Energy Agency (IRENA) estimates that annual global grid investment must double from approximately $0.5 trillion to $1 trillion.
• Recent Indian investment: India approved approximately $19 billion for State transmission infrastructure and 50 GWh of battery storage.
• Expected outcome: These investments are expected to facilitate the evacuation of up to 135 GW of renewable energy by 2032–33.

Making Renewable Energy Secure

• Energy security: Renewable energy should reduce dependence on imported fossil fuels without creating new dependencies on a few countries for critical minerals, technologies and clean-energy components.
• Manufacturing concentration: According to the International Energy Agency (IEA), China dominates cleantech manufacturing investment, accounting for approximately 70%.
• Solar manufacturing: India's solar module manufacturing capacity has reached around 262 GW, while solar cell manufacturing capacity has increased to approximately 37 GW.
• National Critical Minerals Mission: Aims to strengthen domestic critical mineral exploration, mining, processing and supply chains.
• National Green Hydrogen Mission: Seeks to develop domestic green hydrogen production and electrolyser manufacturing capabilities.
• Global cooperation: Multilateral institutions should provide country-specific pathways for developing domestic manufacturing, resilient supply chains and skilled workforces rather than promoting a uniform development model.

Making Renewable Energy Digital

• Smart meters: Act as the digital nervous system of electricity grids by enabling real-time monitoring of consumption and better demand management.
• India's progress: Approximately 54 million smart meters have been deployed.
• Digital grid: Smart meters facilitate integration of energy storage, grid-edge technologies and software-based optimisation of electricity flows.
• Digital Public Infrastructure (DPI) for energy: Can enable interoperable digital systems for managing electricity consumption, transactions and energy services.
• Role of AI: Artificial Intelligence can improve renewable energy generation forecasting, optimise grid operations and facilitate flexibility markets.

AI, Data Centres and Energy Challenges

• Rising electricity demand: Global data-centre electricity consumption is projected to increase from approximately 485 TWh to 950 TWh by 2030.
• This would increase data centres' share of global electricity demand from around 1.5% to 3%.
• Water consumption: Annual water consumption by data centres could more than double, increasing pressure on water resources.
• Sustainable planning: New data centres should be located using forward-looking assessments of heat exposure and water stress.
• Mandatory disclosure: Data centres should disclose their electricity consumption, water consumption and carbon intensity to ensure resource efficiency.

India's Renewable Energy Progress

• India has installed approximately 308 GW of non-fossil fuel-based energy capacity.
• Achieving the 500 GW non-fossil capacity target will be an important milestone, but capacity expansion alone cannot ensure a successful energy transition.
• The ultimate objective should be to ensure that all generated electricity is effectively transmitted and utilised, consumers benefit from affordable power, and domestic manufacturers and skilled workers participate in the clean-energy ecosystem.

Way Forward

• Reliable energy systems: Expand battery storage, modernise transmission networks and introduce flexible electricity markets.
• Energy independence: Strengthen domestic cleantech manufacturing and diversify critical mineral supply chains.
• Digital integration: Leverage smart meters, AI and digital infrastructure for efficient energy management.
• Sustainable AI infrastructure: Ensure data centres operate within electricity, water and carbon constraints.
• Inclusive transition: Ensure affordable electricity access, domestic employment generation and equitable distribution of clean-energy benefits.

Additional UPSC-Relevant Concepts

• Contracts for Difference (CfD)
  • A financial arrangement in which the electricity producer receives an agreed reference price for power.
  • If the market price is below the agreed strike price, the buyer pays the difference; if it is above, the producer generally returns the excess.
  • Provides revenue certainty to renewable energy producers and reduces investment risks.
• Dispatchability and Grid Flexibility
  • Dispatchability: Ability of a power source to supply electricity when required, according to demand and grid requirements.
  • Grid flexibility: Ability of an electricity system to respond to fluctuations in electricity demand and variable renewable energy generation.
  • Battery storage, pumped hydro storage, demand response and flexible power generation improve grid flexibility.
• Renewable Energy Curtailment
  • Reduction or restriction of renewable electricity generation despite the availability of solar or wind resources.
  • Occurs due to inadequate transmission infrastructure, excess generation, grid congestion or lack of storage.
  • Leads to underutilisation of installed renewable energy capacity.
• Grid-Edge Technologies
  • Technologies deployed close to electricity consumers or at the distribution-network level.
  • Include smart meters, rooftop solar, battery storage, electric vehicles and intelligent energy-management systems.
  • Enable decentralised electricity generation, demand management and efficient grid operations.