India’s renewable energy future

Energy demand in India is growing rapidly with major implications for the global energy market. The Government of India has made remarkable progress in providing access to electricity and clean cooking while implementing a range of energy market reforms and integrating a high share of renewable energy sources into the grid. India, with a population of 1.36 billion and a fast growing economy, has seen its energy demand increasing rapidly as the country continues to urbanize and the manufacturing sector develops. This growing demand is met through various energy sources, with coal set to remain the largest source of energy supply. India also continues to develop the institutional framework needed to attract the investment required to satisfy this growing energy need.

Electricity security has improved through the creation of one national power system and major investments in clean energy. India is now working on integrating higher shares of variable renewable energy into the energy mix.

Battery prices have declined more than two-thirds over the last decade, driven by R&D and economies of scale in manufacturing, and now represent one of the fastest growing clean energy technologies. Deploying batteries on site with renewables can provide dispatchable clean power, reducing variability in renewable output and allowing projects to provide grid balancing and ancillary services.

India has also been prioritizing access to electricity and clean cooking. Progress in both have been remarkable: 700 million people gained access to electricity since 2000, and 80 million new LPG connections for clean cooking were created. The Government of India is continuing to focus on providing secure, affordable and sustainable energy, while achieving its ambitious renewable energy targets and reducing local air pollution.

India's natural gas demand is forecast to increase by nearly 60% by 2030, a new IEA report finds, marking a significant shift in the country's energy landscape and putting India’s projected gas demand on a par with some of the world’s largest consumers.

The report, India Gas Market Report: Outlook to 2030, shows the country’s gas consumption is set to reach 103 billion cubic meters (bcm) annually by the end of the decade. Following over a decade of slow growth and periodic declines, India’s natural gas demand increased by more than 10% in both 2023 and 2024, indicating an inflection point.

"India's gas market is entering a new phase of growth, supported by significant infrastructure development and clear policy direction," said IEA Director of Energy Markets and Security Keisuke Sadamori. "The prospect of higher gas demand in India coincides with an expected wave of new global LNG supply. However, it will require careful planning and market coordination to ensure supply security and to help gas to compete in a price-sensitive market."

Infrastructure development is playing a crucial role in enabling market growth. Since 2019, India has almost quadrupled its number of compressed natural gas (CNG) stations and more than doubled the number of residential gas connections, while extending its transmission pipeline network by 40%. By 2030, the number of CNG stations and residential connections is expected to nearly double again, with the gas transmission grid expanding by an additional 50%.

The city gas distribution sector is expected to lead consumption growth in India between now and 2030, supported by rapid CNG infrastructure expansion and competitive pricing against liquid fuels. The heavy industry and manufacturing sectors are expected to add around 15 bcm of demand during this period, while gas use in oil refining is forecast to increase by more than 4 bcm as more refineries connect to the network.

India’s domestic gas production, which met 50% of demand in 2023, is projected to grow gradually, reaching just under 38 bcm by 2030. This would put it around 8% above 2023 levels. The limited growth in domestic supply means India's LNG imports will need to more than double to around 65 bcm a year by 2030 to meet rising demand.

India is looking to increase the share of gas in its energy mix and the report identifies potential for even higher growth under an accelerated scenario, where targeted policy measures could push total demand to approximately 120 bcm by 2030 – comparable to the current gas consumption of South America. This scenario would require additional policy support to drive higher utilisation of gas-fired power plants, faster adoption of LNG in heavy-duty transport, and more rapid expansion of city gas infrastructure.

Looking ahead, the report emphasises the need for strategic planning in LNG procurement and import infrastructure. As legacy contracts expire, India faces a widening gap between contracted supply and projected demand after 2028, potentially increasing exposure to spot market volatility unless new long-term contracts are secured in the coming years.