India's energy transition enters a new phase as experts call for AI, storage and finance push

India's clean energy journey is entering a more demanding phase, with experts arguing that the country's next challenge is no longer about adding renewable energy capacity but ensuring the infrastructure, financing and policy ecosystem can keep pace with its ambitions.

Speaking at OPEN Green Shift, a forum that brings together leaders from business, policy and innovation to discuss the ideas and actions shaping India's sustainable future, experts said the next stage of India's energy transition will depend on expanding energy storage, strengthening electricity distribution companies, mobilising climate finance, improving energy security and using emerging technologies such as artificial intelligence to build a smarter and more flexible power grid.

While India has made significant progress in scaling renewable energy over the past decade, the panelists said sustaining that momentum would require solving structural challenges that go well beyond generation capacity. These include integrating intermittent renewable power into the grid, financing next-generation clean technologies, accelerating industrial decarbonisation and enabling states to play a bigger role in driving the transition.

Storage and grid readiness emerge as the next challenge

Saurabh Kumar, former vice president of Global Energy Alliance for People & Planet, India, pointed to India's rapid expansion of solar power and the rollout of smart meters as two of the country's biggest clean energy success stories over the past decade. Solar tariffs have fallen dramatically while private investment has entered the power distribution segment through large-scale smart metering programmes, demonstrating that ambitious policy interventions can deliver results at scale.

However, he cautioned that the next phase of the transition would require addressing bottlenecks that threaten to slow the pace of renewable energy deployment. Around 40 GW of renewable energy projects are currently stalled, while India's grid lacks adequate storage capacity and operational flexibility to absorb the significantly larger volumes of renewable power expected over the coming decades, he said. According to estimates cited during the discussion, the country will require around 250 GWh of storage by 2030, compared with only a fraction of that capacity available today. He also underlined the importance of improving the financial health of distribution companies, saying a successful clean energy transition ultimately depends on utilities being able to purchase renewable power sustainably.

Energy security now driving the transition

Mohit Bhargava, Country Director, India Energy & Climate Center, Goldman School of Public Policy (GSPP), UC Berkeley, argued that energy security has become the central driver of India's energy transition amid an increasingly uncertain geopolitical environment. Rather than viewing clean energy and energy security as competing objectives, he said the transition must strengthen India's energy independence while meeting rising electricity demand.

He pointed to research indicating that renewable energy combined with storage has emerged as the country's lowest-cost option for providing round-the-clock electricity. That, he said, creates an opportunity not only to expand clean power generation but also to accelerate industrial decarbonisation by electrifying sectors such as textiles, ceramics, automobiles and pharmaceuticals, while newer technologies such as green hydrogen could help decarbonise heavy industries including steel.

While technology pathways are becoming clearer, mobilising capital remains one of the biggest challenges, reckoned Vibhuti Garg, director (South Asia) at Institute for Energy Economics and Financial Analysis (IEEFA). Garg argued that public financing would continue to play a critical role in reducing risks for emerging technologies before larger pools of private capital can enter the market. Technologies such as battery storage, green hydrogen and green ammonia still require policy support because of their high upfront costs and evolving commercial viability.

She cited battery storage as an example of how government support helped build investor confidence, noting that costs have fallen sharply over the past few years as deployment increased. Garg also stressed the need to strengthen India's carbon market architecture through more ambitious benchmarks, greater price stability and clearer long-term policy signals to encourage investment.

AI and states could shape the next chapter

Looking ahead, the discussion increasingly turned towards how technology and governance could accelerate the transition. Kumar proposed an "AI for Energy Mission", arguing that artificial intelligence could help electricity distribution companies integrate renewable energy more efficiently by optimising grid operations, forecasting demand and making better use of the vast volumes of operational data already generated across the power sector. Rather than focusing only on AI's growing electricity consumption, he said policymakers should also examine how AI can improve the efficiency of the energy system itself.

Bhargava, meanwhile, said states are emerging as increasingly important drivers of India's clean energy transition. As states compete to attract investment in renewable energy, green hydrogen and advanced manufacturing, he said they are becoming more proactive in developing supportive policies, streamlining approvals and strengthening their own power systems. He added that both renewable energy and nuclear power would remain critical pillars of India's long-term pathway towards net-zero emissions and greater energy security.

The discussion, moderated by Dr Ritu Mathur, director of Energy Assessment & Modelling at TERI, underscored a broader shift in India's clean energy narrative. Having demonstrated that renewable energy can be deployed at scale, the country's next challenge is making the entire energy ecosystem smarter, more resilient and financially sustainable. The consensus among the panelists was that success will depend not only on adding gigawatts of clean power, but also on strengthening the institutions, technologies and markets needed to support the next phase of the transition.