ET World Leaders Forum: India needs to make the shift from 'petro state' to 'electro state'
India needs to shift from a “petro state” to an “electro state” as rising power demand from EVs, AI and data centres accelerates the push for renewable and nuclear energy, speakers at the ET World Leaders Forum said.
By ET Bureau |
India has weathered recent geopolitical volatility relatively well, helped by the rapid expansion of renewable energy capacity in recent years, with non-fossil fuel installations now exceeding 300 GW and the country on track to meet its 500 GW target by 2030.
The country needs to shift focus from being a "petro state" to an "electro state" as rising electricity demand from electric vehicles, artificial intelligence and data centres drives the need for round-the-clock renewable power and nuclear energy, speakers said .
The panel discussion on 'The New Energy Order: Balancing Security, Affordability and Sustainability', moderated by ET's Anubhuti Vishnoi, discussed the possibility of this shift, with panellists highlighting the need for higher renewable capacity, long-term capital, stronger transmission infrastructure and greater private participation in nuclear energy.
"At some point of time we need to put our focus back on converting this economy from being a petro state to an electro state," renewable energy secretary Santosh Kumar Sarangi said.
That would require behavioural change and push supply side abilities in supplying the required number of electric vehicles, induction cooking systems and home appliances where demand shifting can easily be done, he said.
"So, a combination of this will actually result in shifting India into an electro state and that would bring about a lot of resilience in the economy, a lot of reduction in our import dependence," he said.
India has already crossed 300 GW of non-fossil fuel capacity and is on track to reach the target of 500 GW by 2030, Sarangi said.
Echoing the sentiment, Girish Tanti, co-founder, Suzlon Group, said India should consider raising its renewable energy ambitions, given the good base that has been built in the last decade and the opportunity because of rising electricity demand from artificial intelligence, electric vehicles and economic growth.
"It is an excellent opportunity in India. It is time to step them [targets] up. Prime Minister Narendra Modi has set out very clear and ambitious goals but I think it's time to kind of step them up and it's an excellent opportunity for India," he said.
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Globally, almost 80% of all new energy that has got built out, including in India, has come from renewables and this trend isn't going anywhere with the demand that has come up whether it's from artificial intelligence, electric vehicles and general economic growth, Tanti said, adding that India could need nearly five times its current power capacity by 2050, with a large share expected to come from renewables. India has tapped only a fraction of its renewable potential, with less than 10% of its solar resources and less than 5% of its wind potential developed so far, he added. But scaling up will require capital with a longer horizon. Renewable projects need financing of 30 years or more, while much of the capital available in India has a tenure of less than 10 years.
This is where the role of development finance is changing. World Bank India country director Paul Procee said the institution expects to move away from financing renewable generation directly as private capital becomes more capable of funding solar and wind.
Instead, the focus will increasingly be on areas such as grids, smart grids, battery storage, manufacturing and skills, where investments still need to be de-risked. The World Bank's role, he said, is shifting from financing projects to using its capital and knowledge to bring in more private investment.
"So, we have the famous saying now and you will hear our President saying this very often, we are moving from being a financing bank to a leveraging bank," he said. The question of firm power also brings nuclear power into the transition. The Sustainable Harnessing and Advancement of Nuclear Energy for Transforming India (SHANTI) Act, 2025 has opened the sector to private participation, creating an opportunity to build India's nuclear capacity as well as its technology and talent base, Sunita Kumar, president & CEO, nuclear business, Bajaj Energy, said.
"It's not a competition [between renewable energy and nuclear power]. We're really complementing the landscape of energy and the mix in India," she said.
For providing firm clean energy to meet rising demand, the recent tender from the Solar Energy Corporation of India for round-the-clock power combining solar, wind and battery storage, with a tariff of ₹5.25/unit, could be a game changer.
The emergence of firm, affordable and reliable renewable power has put India in a position to potentially revolutionise electricity supply in the future, Sarangi said, pointing to the latest competitive tariff discovered through the tender. This development could address one of the key challenges facing renewable energy-the need to provide firm, round-the-clock power-and mark a fundamental shift in the sector, Tanti said.
