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India will need an estimated USD 2.2 trillion investment in its power sector over the next two decades to support capacity expansion, grid modernisation, and energy transition efforts, according to Union Power Secretary Pankaj Agarwal. Speaking at the Bharat Electricity Summit 2026, the official outlined the country's targets of achieving 500 GW of renewable energy capacity by 2030 and adding 97 GW of coal-based thermal capacity by 2034-35. The sector has seen rapid growth, with total installed capacity crossing 520 GW and peak demand deficits declining sharply. Policymakers emphasised the need for regulatory reforms, market redesign, and flexible energy systems to manage rising renewable integration, alongside initiatives such as PM-Kusum and PM Surya Ghar Muft Bijli Yojana.
India will require an estimated investment of USD 2.2 trillion in its power sector over the next two decades to support capacity expansion, system upgrades, and energy transition, Union Power Secretary Pankaj Agarwal said while addressing the Bharat Electricity Summit 2026 in New Delhi in the past week. The investment requirement is linked to the country's long-term energy goals, including scaling renewable capacity and strengthening grid infrastructure to accommodate evolving demand patterns. Advertisement
The government has set a target of achieving 500 GW of renewable energy capacity by 2030, alongside plans to add 97 GW of coal-based thermal power capacity by 2034-35. Agarwal stated that while India has made considerable progress in expanding generation capacity and improving power distribution, the next phase of growth will depend on strengthening regulatory frameworks, market design, pricing mechanisms, and institutional systems.
He indicated that programmes such as PM-Kusum are altering the role of consumers, particularly in the agricultural sector, by enabling farmers to become energy producers. However, integrating a higher share of renewable energy into the grid will require new operational approaches. Measures such as time-of-day tariffs, demand response systems, flexible generation, and energy storage solutions are expected to play a critical role in maintaining grid stability.
The official noted that India's power sector has undergone significant changes over the past decade. Peak demand deficits have reduced from around 4 per cent to nearly negligible levels, while installed power capacity has more than doubled to exceed 520 GW. Renewable energy has been central to this expansion, particularly since 2016, supported by a reduction in tariffs and policy-driven scaling.
Agarwal stated that this progress had been driven by structured policy interventions, including standardised bidding frameworks and renewable purchase obligations, which helped expand capacity while lowering costs. He added that India is now meeting domestic energy requirements while also emerging as a manufacturing and export hub in the energy sector.
Highlighting future challenges, he raised the need to view electricity as a dynamic commodity, where value varies based on time, location, and demand conditions, suggesting that evolving market structures will be necessary to manage this shift.
At the same event, Union Power Minister Manohar Lal said the government is planning an under-sea power transmission cable network with the UAE under the One Sun, One World, One Grid initiative. He also stated that the Bharat Electricity Summit would be organised every two years going forward.
Union Minister for New and Renewable Energy Pralhad Joshi pointed to the growth in India's electronics manufacturing sector, which has increased from INR 1.1 lakh crore to INR 11.8 lakh crore. Minister of State for Power and New and Renewable Energy Shripad Naik said that 32 lakh households have been solarised under the PM Surya Ghar Muft Bijli Yojana, against a target of 1 crore homes.
Officials noted that India's solar capacity has expanded from 2.8 GW in 2014 to over 143 GW at present, reflecting a shift from capacity addition to system-level integration in the renewable energy sector.
Source - PTI
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