India Needs $2.2 Trillion in Power Investment Over Two Decades

India Power Sector to Require $2.2 Trillion Investment Over Two Decades, Says Power Secretary​

Massive Capital Requirement to Drive Energy Transition and Capacity Expansion​

New Delhi, March 19: India will need an estimated $2.2 trillion investment in its power sector over the next 20 years, Union Power Secretary Pankaj Agarwal said on Thursday, highlighting the scale of funding required to support the country’s energy transition and future demand.

Speaking at the Bharat Electricity Summit 2026, Agarwal outlined India’s ambitious roadmap, which includes achieving 500 GW of renewable energy capacity by 2030 and adding 97 GW of coal-based thermal power capacity by 2034-35.

Next Phase of Growth to Focus on Market Design and Innovation​

Agarwal noted that while India has made substantial progress in expanding power generation capacity and strengthening distribution systems, the next phase of growth will be driven by systemic transformation.

This includes advancements in:

• Software systems
• Regulatory frameworks
• Market design
• Pricing mechanisms
• Institutional innovation

He emphasized that integrating large volumes of renewable energy into the grid will require new operational and market approaches, including:

• Time-of-day tariffs
• Demand response mechanisms
• Flexible power generation
• Energy storage solutions

Renewable Push and Policy Framework Driving Sector Growth​

Highlighting the sector’s progress, Agarwal said India’s installed power capacity has more than doubled to over 520 GW, with renewable energy playing a central role, particularly since 2016.

He added that peak demand deficit has declined sharply from around 4 percent to nearly negligible levels, reflecting improved supply reliability.

According to him, this transformation has been driven by:

• Structured policy design
• Standardised bidding frameworks
• Renewable purchase obligations

These measures have enabled large-scale capacity addition while reducing tariffs.

Farmers Emerging as Energy Producers Under PM-Kusum​

Programs such as PM-Kusum are reshaping the energy landscape by enabling farmers to transition from being passive electricity consumers to active energy producers.

Agarwal said this shift reflects a broader structural change in how electricity is generated and consumed in the country.

Electricity Market Moving Towards Dynamic Pricing Models​

The Power Secretary also raised the need to rethink electricity as a dynamic commodity, where pricing and value vary based on time, location, and demand conditions.

He posed a key question to stakeholders on whether the sector is prepared to adopt such a model as the grid becomes more complex with renewable integration.

Government Push for Global Energy Connectivity​

Earlier at the summit, Union Power Minister Manohar Lal said India is planning an undersea power transmission cable network with the UAE under the One Sun, One World, One Grid initiative, aimed at enhancing cross-border energy connectivity.

He also announced that the Bharat Electricity Summit will now be held biennially.

Renewable Growth and Solarisation Efforts Gain Momentum​

Union Minister for New and Renewable Energy Pralhad Joshi highlighted the rapid growth in India’s electronics manufacturing sector, which increased from Rs 1.1 lakh crore to Rs 11.8 lakh crore.

Minister of State Shripad Naik said that 32 lakh households have been solarised under the PM Surya Ghar Muft Bijli Yojana, out of the target of 1 crore homes.

He added that India’s solar capacity has expanded significantly from 2.8 GW in 2014 to over 143 GW currently, positioning the country among global leaders in clean energy.

Naik noted that the country is now transitioning beyond capacity creation towards building an integrated and efficient energy system.