India’s renewable energy share in total power generation has reached 19% in the first 10 days of June 2025, up from 14% during the same period last year, according to a recent HSBC report. This increase is attributed to a combination of factors, including a steady rise in renewable capacity and a decline in overall power demand due to above-average rainfall.
The report notes that overall power demand in May 2025 fell by 4%, while peak demand decreased by 7%. In the first 10 days of June, both metrics declined by 1%. These reductions are largely attributed to significantly above-average rainfall during this period, which led to lower consumption levels. As a result of the reduced demand, renewable energy sources, which have a “must-run” status in India’s power grid, were able to generate more electricity without the need for thermal power plants to compensate. This shift led to an increase in the share of renewables in the energy mix.
With the increased contribution from renewable sources, thermal power plants were required to scale down their generation. Consequently, the average Plant Load Factor (PLF) of thermal units dropped to 65% in May 2025, compared to 72% in the same month the previous year. This reduction in thermal power generation led to a rise in coal stockpiles at power stations, which reached 61 million tonnes—sufficient for 21 days of demand, up from 17 days a year ago. The surplus in power generation during solar hours resulted in power prices dropping to zero on May 25, 2025, highlighting the growing dominance of renewable energy during peak sunlight hours.
To address the challenges posed by the intermittency of renewable energy sources, the Indian government is expanding its support for battery storage solutions. A new tranche of ₹54 billion in viability gap funding (VGF) has been announced to support 30 GWh of battery storage capacity. This translates to a government subsidy of approximately $21 per kWh for new battery systems. Of the proposed 30 GWh, 25 GWh will be allocated to state-level projects, and the remaining 5 GWh will be assigned to NTPC. This initiative builds upon the previously announced ₹37 billion in VGF, under which 13 GWh of storage is currently under implementation. India’s renewable energy sector continues to grow rapidly, with solar power playing a significant role in this expansion. As of April 2025, the country’s installed solar power capacity stood at 107.94 GW, with solar electricity generation increasing to 144.15 terawatt-hours (TWh) from 115.97 TWh in the same period a year ago. This growth is expected to continue, driven by supportive government policies, technological advancements, and falling costs.
The increase in renewable energy share, coupled with declining power demand, signifies a positive trend towards a more sustainable and resilient energy system in India. However, challenges remain in ensuring grid stability and integrating higher shares of variable renewable energy sources. Continued investment in storage solutions and grid infrastructure will be crucial to maintaining this momentum and achieving India’s renewable energy targets. As India moves towards its goal of 500 GW of renewable energy capacity by 2030, the developments in May and June 2025 serve as a promising indicator of the country’s progress in transitioning to a cleaner and more sustainable energy future.
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