A case in point was solar energy, the most cited success story by policy makers and industry executives alike.
Never before in India has a power generation technology grown at such record-setting speed of capacity creation as solar. This has happened largely due to technology innovation and policy push. The numbers tell a story to be proud of. The annual solar capacity addition has grown at an exponential scale year after year. Sample this: From 5.6 gigawatt (Gw) in 2020-21, it shot up to 12.7 Gw in 2021-22, and then to 15 GW in 2023-24, finally rising to 23.8 Gw in 2024-25. In the first eight months (April-November) of the current financial year alone, 27.2 Gw capacity was added.
However, the picture isn’t all glowing. Granular data shows the overall renewable energy capacity awarded this year, led largely by solar, has plummeted to a mere 5.8 Gw, from around 40 Gw last financial year due to delays in signing power purchase agreements (PPAs) by discoms. Since renewable energy projects typically take 2-3 years to be executed, the impact of the slowdown in tendering activity on capacity addition will become visible in 2028.
Experts, however, say it is too early to write solar off.
“India is yet to see the peak of solar capacity addition,” says Anujesh Dwivedi, partner at accounting and consulting firm Deloitte. “The country added 29.5 Gw of renewable energy capacity last financial year, primarily contributed by solar. The annual capacity addition has already surpassed the annual peak capacity addition of 20 Gw, which was seen in thermal or coal plants years ago.”
He added that the slowdown witnessed this year in solar tenders was because of two reasons. One, the initial tenders were plain vanilla solar, and now there are not many takers for that. Second, there have been constraints on the transmission evacuation side.
“Also, discoms did not see much growth in demand this year because of a prolonged and better monsoon,” Dwivedi says. “That is also the reason why there is no power shortage this year. So, there is no urgency to sign PPAs.”
Experts are of the view that once transmission bottlenecks are addressed and some of the unsigned legacy PPAs come through, tendering activity and capacity creation will resume within a few months.
So the current slowdown looks temporary.
This year will also be remembered for the hiccups in crude oil imports, the Achilles’ heel of India’s energy security. That the country is dependent on foreign supplies to meet almost 90 per cent of its oil requirement is a well-known and troubling fact.
This dependence came to the fore when, in August, the US administration imposed 25 per cent tariffs on India – doubling them to 50 per cent effective August 27 – as punishment for high imports of Russian oil, which, American President Donald Trump said, was indirectly funding Russia’s war against Ukraine.
On November 21, the US also imposed sanctions on two Russian state-owned energy firms, Rosneft and Lukoil, effectively cutting off 60 per cent of India’s Russian oil imports.
While India sourced barely 2 per cent of its crude oil from Russia in 2020-21, the imports increased to 35 per cent last financial year, making the former Soviet state India’s largest crude oil supplier, with a trade value of more than $50 billion. Asia accounts for nearly 95 per cent of Russia’s crude oil exports, with China being the top buyer and India second.
A variety of factors that came into play after US action, however, prevented the situation from spiralling into a crisis.
While it is not business as usual on Russian oil imports, supplies haven’t really taken a major hit nor have there been price shocks.
Indian oil refiners have exercised the option and the freedom to source oil from non-sanctioned Russian entities, continuing with handsome discounts. They have also turned to other geographies, such as West Asia. What could have been an energy security disaster, since any impact on oil imports can send domestic fuel prices skyrocketing, appears to have been averted – at least for now.
Globally, however, there is cause for concern: Climate change, an issue that is discussed year after year, at every Conference of the Parties (COP) gathering. COP30 was no different. This time the meeting was held at Belem, Brazil, and 194 countries discussed how to mitigate the impact of climate change.
The meeting took place amid conflicts, rising debt, trade whiplash, economic woes, and the withdrawal of the US from the Paris Agreement. The Trump administration did not send a delegation to COP30, which complicated the negotiations on climate finance, making it difficult to channel the funds for developing countries to manage their energy transition. The event concluded without a formal agreement on phasing out fossil fuels in its final text.
Experts, however, believe that all is not lost. There is hope for progress, they feel, even as climate negotiations risked being disconnected from climate reality.
“At COP30 in Brazil, the real world finally came back into the room. In a year where climate multilateralism has been challenged, getting a good deal was better than failing to get any deal in pursuit of the best deal,” says Arunabha Ghosh, South Asia climate envoy to COP30 Presidency, and chief executive officer, Council on Energy, Environment and Water, a Delhi-based think tank. “The simple truth is that the world is not binary. Real transitions happen amid complex and hard development choices.”
He adds that the event did see important steps: A call to “at least triple” finance for climate adaptation in developing countries (even if by 2035); recognising diverse national pathways for a just transition; deciding to establish a two-year work programme on climate finance; reaffirming that measures taken to combat climate change, including unilateral ones, should not become ways of arbitrary or unjustifiable discrimination; and finally, deciding to launch a Global Implementation Accelerator (a multi-stakeholder initiative to speed up global deployment of climate and sustainability solutions), including a high-level dialogue next year.
All signs of hope, which kept up amidst the hiccups.