India Emerges As Key Player in Global Energy Investment: IEA

India Emerges As Key Player in Global Energy Investment: IEA

India’s rapidly evolving energy landscape features prominently in the International Energy Agency’s (IEA) World Energy Investment 2025 report, underscoring the country’s pivotal role in global energy investment trends.

India has demonstrated a strong pickup in solar investment in 2024, with renewables expanding rapidly alongside continued coal development. The country approved an additional 15 gigawatts (GW) of new coal-fired power plants in 2024 — the highest global approval level since 2015 — reflecting a unique dual path of energy growth.

Green Investments Spiked 

Investment in renewables surged 17% to USD 33 billion in 2024 and is forecasted to increase by another 12% in 2025. India is on track to exceed its 2030 target of achieving 50% non-fossil generation capacity ahead of schedule, thanks to robust policy support that has enabled low-cost solar deployment, alongside significant wind and bioenergy projects, the IEA report said.

However, coal remains a substantial part of India’s energy mix. Final investment decisions (FIDs) for coal power plants reached ten-year highs in both India and China in 2024, collectively accounting for 99% of global coal investments. India’s coal capacity is expected to serve growing electricity demand unmet by renewables, providing essential firming to balance intermittent clean energy sources.

PPA Bottleneck

Renewable energy deployment in India, although robust, faces challenges. Bottlenecks in the issuance of power purchase agreements (PPAs) have created a backlog of around 40 GW of awarded renewable projects awaiting contractual clearance as of Q1 2024. This delay threatens to stall the momentum of clean energy capacity additions.

The report highlights India’s growing significance in emerging markets and developing economies, noting strong domestic and international financing flows supported by macroeconomic stability, mature capital markets, and improved financial health of distribution companies. Despite these positive trends, India’s share of project finance for utility-scale solar and wind remains relatively modest at 25% in 2024.

Battery Storage Investment Projections 

Battery storage investment in India is expected to exceed USD 1 billion in 2025, while investments in electrolyser projects, vital for green hydrogen production, are projected to grow 150% in the same year. One highlighted project in Kakinada is expected to produce 1 million tonnes of low-emissions ammonia annually by 2026, primarily for export to Europe.

India’s electricity demand growth ranks as the third largest worldwide over the past five years, trailing only China and the United States. Clean energy accounted for 83% of India’s power sector investments in 2024, with the country becoming the largest recipient of development finance institution (DFI) funding, receiving approximately USD 2.4 billion for clean energy projects.

The government’s commitment to infrastructure is evident with an approval of USD 110 billion for transmission investments between 2024 and 2032, reflecting long-term grid development planning. Nonetheless, transmission bottlenecks have delayed about 60 GW of renewable capacity.