– As India advances towards an energy transition, actions taken in the transport sector – the fastest-growing sector in terms of energy consumption – will be crucial. Because road transport is a State List subject under India’s Constitution, state-level decisions will be critical for realising an energy transition.
– The Energy Transition Preparedness Initiative (ETPI) provides a framework to assess state-level progress towards an energy transition across India’s electricity, buildings, and transport sectors. It covers ten states that account for more than 50% of India’s transport sector emissions.
– By analysing publicly available data and reports, this study highlights the progress made by states in the base year, 2020–21.
– The study reveals that progress has been made in policy formulation around major aspects of the transport energy transition: prioritising non-motorised transport (NMT) and public transport, encouraging electric vehicle (EV) adoption, scrapping old vehicles, and promoting densification around transit hubs. However, a defined articulation of targets can guide a more focused transition.
– In converting policy to action, intent varies across states. This study highlights that the structures that can guide the focused implementation of energy transition projects are still nascent. Dedicated and consistent funding, integrated governance, and data-driven decision making can play a critical role in accelerating implementation.
– The Energy Transition Preparedness Initiative (ETPI) is an effort to study states’ progress towards achieving the energy transition by analysing their plans, actions, and governance processes through a set of indicators. One of the focus sectors under ETPI is buildings, which falls under state jurisdiction and is guided by state-level policies.
– The ETPI indicator framework for buildings was used in 10 states for the study period FY 2020–21 (the report was published in 2024). These states are Bihar, Delhi, Gujarat, Karnataka, Kerala, Madhya Pradesh, Maharashtra, Rajasthan, Tamil Nadu, and Uttar Pradesh. This report builds on the FY 2020–21 baseline and includes updates through FY 2023–24. The five-building sector indicators cover aspects such as Energy Conservation Building Code (ECBC) compliance and Eco Niwas Samhita (ENS) preparedness; promotion of rooftop solar photovoltaic (RT-SPV) systems, energy-efficient appliances, and energy efficiency and clean energy in public buildings; and energy efficiency and clean energy in affordable housing.
– We have used publicly available information. The goal is to highlight examples of good practice, facilitate cross-learning, and encourage the adoption of approaches suitable for state-specific contexts.
– We find that the studied states are progressing in adopting and notifying building codes. However, for successful implementation, it is important to remove local-level barriers by simplifying compliance procedures, creating a pool of experts to assist with compliance, and enhancing the awareness and capacity of institutions.
– Power distribution companies and State Designated Agencies in some of the studied states, such as Delhi, Karnataka, Kerala, and Maharashtra, are promoting energy-efficient appliances, offering an opportunity for other states to learn from these examples and adopt similar initiatives. Also, stronger market surveillance efforts are needed for the Standards & Labelling programme to drive greater market transformation.
– In state-specific affordable housing schemes and policies, little attention is paid to thermal comfort in the design and construction of projects. However, recently there have been efforts to integrate climate resilience measures into rural affordable housing projects under the Pradhan Mantri Awaas Yojana-Gramin (PMAY-G) programme.
India’s hydrogen demand is expected to double, reaching approximately 12 million metric tonnes per annum (MMTPA) by 2030, driven primarily by the expansion of the fertiliser, refinery, and petrochemical sectors. India currently meets most of its hydrogen demand from natural gas via steam methane reforming. As the country pursues its targets for energy independence by 2047 and Net-Zero emissions by 2070, green hydrogen has arguably emerged as a key component of its energy transition calculus.
India launched the National Green Hydrogen Mission (NGHM) in January 2023 with an outlay of INR 19,744 crores and a target to achieve 5 MMTPA green hydrogen production capacity by 2030. Produced by renewable energy (RE) powered electrolysers, green hydrogen can potentially decarbonise ‘hard-to-abate’ sectors. Building on strong private-sector interest and additional support from state governments, the country now aims to secure 10% of global green hydrogen production capacity, which is projected to surpass 100 MMTPA by 2030.
Can green hydrogen truly become the game-changer it is hailed to be? Our blog analyses India’s pursuit of green hydrogen, examines the opportunities, challenges, and risks in its current approach.
Pursuit of Green Hydrogen
The hype around green hydrogen has fuelled ambitious targets and high expectations. Meeting the NGHM target would require installing 60-100 GW of electrolyser capacity. It is expected to leverage over INR 8 lakh crore investments and create 6 lakh green jobs. Besides the financial incentives, the Government of India (GoI) has streamlined permits and waived transmission charges for RE procurement. Several states have announced or are working on policies to support green hydrogen and its derivatives.
Four promising narratives shape India’s green hydrogen ambition:
– Generate employment: Green hydrogen production and export are expected to become a significant driver of job creation. The NGHM is expected to generate over 6,00,000 jobs by 2030, an aspiration shared by the states. Andhra Pradesh aims to create 12,000 jobs per MMTPA of green hydrogen production, while Uttar Pradesh’s policy envisions generating 1.2 lakh direct and indirect jobs. Gujarat is projected to create 1.8 lakh jobs owing to opportunities in hydrogen electrolyser manufacturing.
– A vehicle for industrialisation: While India sees green hydrogen as an opportunity to reduce its dependence on fuel imports, it also aims to become a global hub of production, use, and export of green hydrogen and its derivatives. It is looking to tap into the green hydrogen export markets in Europe and East Asia. Cheap RE, lower labour and land costs, and access to multiple ports across the long coastline are claimed to bolster India’s export capabilities. GoI has sanctioned four hydrogen valley clusters in Bhubaneswar (Odisha), Jodhpur (Rajasthan), Kochi (Kerala), and Pune (Maharashtra), and has designated three green hydrogen hubs in Paradip (Odisha), Tuticorin (Tamil Nadu), and Kandla (Gujarat).
– Address regional imbalances: The eastern and north-eastern states, currently lagging in solar and wind energy development, can capitalise on the green hydrogen transition by leveraging their rich mineral and industrial base. A TERI study claims industrial clusters offer a promising opportunity for the early development of hydrogen infrastructure. Notably, the iron and steel industries are concentrated near coal and iron ore deposits in Odisha, Jharkhand, West Bengal, and Chhattisgarh. Green hydrogen is an opportunity for these states to leap forward in their energy transition.
The Challenges
However, the pursuit of green hydrogen is not free from challenges. Realising the promises will require managing these challenges.
– Domestic market: The NGHM has spurred a significant supply-side response, with announced production capacities reaching nearly 2.5 times the 2030 target. However, this momentum has not translated to the demand side. The biggest hurdle right now is cost. Green hydrogen costs about $4–$5 per kg, while grey hydrogen is much cheaper at $2.3–$2.5 per kg. By 2030, financial incentives and falling solar and wind energy prices can bring the cost of green hydrogen production to around $3–$3.75 per kg. Still, it’s unlikely to match grey hydrogen anytime soon. Creating demand through strategies such as blending in high-volume sectors (refining, fertiliser, piped natural gas) or replacing grey hydrogen in niche industries (chemicals, glass, ceramics) might help.
– Export demand: Exports could help boost uptake of green hydrogen. If export opportunities are fully tapped, NGHM targets could be exceeded to 10 MMTPA. To support export, GoI is prioritising the development of port infrastructure, including storage and refuelling capabilities, and has identified strategic export hubs. Encouraging demand signals from markets willing to pay a premium for low-carbon hydrogen, like Germany, Japan, South Korea, the Netherlands, and Belgium, further reinforce this ambition. However, uncertainties surrounding the export market and evolving standards compound the problem. Energy losses across the supply chain (production, compression/liquefaction, storage, and reconversion) of hydrogen and its derivatives further raise doubts on the reliability of the export-oriented strategy.
– Powering green hydrogen: The NGHM envisages an additional 125 GW of RE capacity for green hydrogen production. However, India’s 2030 target for 500 GW non-fossil electricity generation capacity does not account for this demand. Even if the target is met, a CSEP study claims, it will be insufficient to meet rising electricity demand. At the current pace of RE deployment in India, green hydrogen risks competing with other critical electricity demands, thereby spiking demand for coal-fired electricity.
Another critical consideration is India’s RE mix. Wind-Solar Hybrid electrolysers have demonstrated higher capacity utilisation compared to standalone solar or wind systems. Greater reliance on wind within the mix can further optimise utilisation and reduce levelised costs. However, India’s installed wind capacity (52 GW) is less than half of its solar capacity (130 GW), creating an imbalance that could hinder cost-effective green hydrogen production.
– Resource constraints: Low volumetric energy density poses challenges for hydrogen’s transportation, storage, and distribution infrastructure. Delays in infrastructure development, insufficient subsidies, policy uncertainties, lack of mandates, unreliable grid power, and land availability are delaying Final Investment Decisions (FID). Furthermore, India’s reliance on China for critical and rare-earth minerals needed in electrolyser manufacturing raises significant supply chain concerns.
The cost of electrolysers is expected to decline, aided by policy measures like production-linked incentives. However, low demand may defer commissioning of electrolysers. Financial professionals estimate the technology risk associated with green hydrogen, given evolving technologies such as electrolysers, fuel cells, and storage, as compared to proven technologies like solar and wind. India’s limited focus on hydrogen technology research and development (R&D) leaves it ill-equipped to adapt to rapid advancements.
India’s hydrogen demand is projected to grow over 50 MMTPA by 2070, prompting calls to explore alternative low-carbon sources. Geological surveys suggest that India may hold 3,475 million tonnes of natural hydrogen (white hydrogen), which can potentially meet the demand until green hydrogen becomes viable. Other potential options include pink hydrogen, produced using nuclear power, and blue hydrogen, derived from natural gas with carbon capture and storage. However, these options involve unproven technologies and high costs.
Beyond its role in decarbonisation and energy security, green hydrogen presents new development paths for late-industrialising countries like India. India regards green hydrogen as a first-mover advantage to secure technological and market leadership in clean energy. However, current policies and fiscal measures are geared largely toward deployment rather than innovation. India’s modest public spending on R&D does not reflect the scale of its ambitions. For more details on the green hydrogen R&D landscape, see our blog.
The global surge in green hydrogen is criticised as a form of green extractivism, framing resource appropriation as a climate imperative. India’s current strategy, along with that of other developing nations, focuses on leveraging export opportunities, risks replicating the extractive patterns of fossil-fuel economies. Mitigating these risks calls for an approach grounded in environmental justice, redistribution, and a transformative vision.
India’s cities are at the centre of the global climate and energy transition. They remain deeply dependent on fossil fuels as hubs of high consumption and emissions, yet simultaneously drive economic growth, industry, and employment. As India pursues its Net Zero commitments, the way its cities restructure energy use will shape national and global low-carbon trajectories.
In this context, using examples from a few large and medium-sized cities, this paper explores how cities of different sizes in India are creating different clean energy pathways and examines the political economy of the energy transition in cities. The article discusses the multifaceted nature of the transition, emphasising the difficulties associated with evolving energy systems within urban environments. The paper also reflects on the issues and challenges, and discusses the adoption and participation of different sections of city dwellers in this transition.
India has set a short-term goal to increase its nuclear power capacity to 22.5 GW by 2032, and a long-term target ambition to reach 100 GW by 2047, as part of its broader strategy to achieve energy independence. In the Budget 2025-26, the Government of India introduced a Nuclear Energy Mission and allocated INR 20,000 crores to develop at least five domestically designed and operational small modular reactors (SMRs) by 2033. These ambitions represent a strategic shift, positioning atomic energy as an integral component of India’s 21st century energy portfolio and a vital driver of economic growth towards realising Viksit Bharat (Developed India) by 2047.
Nuclear energy, a symbol of scientific prowess in the mid-20th century, has been an important part of the global electricity mix for the last five decades. It accounted for about one-fifth of global electricity generation in the 1990s, subsequently plateaued, and currently accounts for just below one-tenth of global electricity (see Fig. 1). Yet, it is the second largest source of clean energy after hydropower (see Fig. 2).
Despite a long history of initiatives, ambitious promises, and consistent public spendings, nuclear power currently accounts for less than 2% of India’s total electricity capacity and about 3% of overall generation – a meagre share compared to other major economies (see Fig. 3). Achieving the 2047 targets will require a 12-fold increase in installed capacity. What drives the renewed push for nuclear energy? How does this align with India’s energy transition goals? What are the challenges to realising this ambition?
Fig 1: Nuclear Power Generation, India & World (terawatt hours – TWh). Source: Our World in DataFig 2: Electricity Generation by Source, World (TWh). Source: Our World in DataFig 3: Share of Nuclear Power in Electricity Generation by Country, 2023. Source: IEA
The first major push for nuclear power occurred during an energy supply crisis – the oil crises of the 1970s. After half a century, the resurgence of interest in nuclear power is largely driven by exceptional growth in energy demand alongside increasing pressures to decarbonise energy consumption. Global electricity demand is rising fast, not only for conventional end-uses (lighting and thermal comfort) and energy switch (transport electrification), but also for new demands from data centres, cryptocurrency, and artificial intelligence. The earlier assumption about the global energy demand trajectory – that developed economies have already peaked energy demand and can taper their energy consumption for climate action – is proving wrong. Additionally, the escalation of geopolitical conflicts, exemplified by the Ukraine-Russia conflict and its impact on the global energy supply chain, has re-emphasised the importance of national energy security as a priority. Consequently, there is an emerging global policy shift that puts national energy security first, making space for nuclear power as a key solution for energy security and decarbonisation.
India’s current nuclear ambition might be influenced by the global hype, but it is not abrupt. While championing a rapid global transition to renewable energy (RE), India’s own energy transition goals have always been pursued within the broader framework of its domestic energy security, with an all-of-the-above approach to capacity addition. Responding to the demand surge in recent years and economic growth aspirations, India is doubling down on RE, hydro, coal, and nuclear simultaneously.
India’s current nuclear ambition represents a significant shift in approach from its previously protected and public-funded nuclear programme. First, the Atomic Energy Act was amended to enable Nuclear Power Corporation of India (NPCIL) to form joint ventures (JVs) with other public sector undertakings (PSUs) for setting up nuclear power plants. The expectation is that the PSU partner will bring investible surplus capital, while the NPCIL brings nuclear expertise and keeps a controlling stake. NPCIL has launched JVs with Indian Oil Corporation, NALCO, and NTPC. Second, the government is planning to amend the laws to open nuclear energy to private and foreign players. The private sector is expected to advance technological upgrades, fill the finance gap, and address time and cost overrun challenges, and thus, make nuclear power cost competitive. Third, keeping with the global trend, India is also betting heavily on SMRs (16 MW – 300 MW size) through the Nuclear Energy Mission. SMRs promise to have a short gestation period, better upfront capital cost affordability, and fit for captive use and co-generation for industrial decarbonisation. Finally, India seeks to boost domestic capacity by designing indigenous reactors to avoid risks of import dependency.
India’s current nuclear promises are based on two recent studies. An IIM Ahmedabad study (supported by the Principal Scientific Advisor to the Government of India and NPCIL) suggests that an energy mix with half of the electricity generated from nuclear power is the most likely scenario to achieve the lowest levelised cost of electricity in 2070, while meeting India’s net-zero targets. Another study by Vivekananda International Foundation makes similar projections for nuclear energy. Both studies emphasise the promise of nuclear power to be the most cost-effective and low-carbon option for baseload generation that can power India’s ambitious economic growth trajectory.
How does nuclear power fit into India’s energy mix?
India faces the challenge of meeting growing energy demand while reducing its reliance on fossil fuels to achieve net-zero emissions. Is nuclear power a suitable alternative to reduce India’s dependency on coal? Will nuclear power complement India’s ambitious plan for RE or compete with it? To answer these questions, we need to understand the comparative advantages of nuclear and RE as clean energy options.
1. Dispatchability: RE generation is intermittent, and requires complementary energy storage to be dispatchable — where output can be adjusted to meet variable demand. Planning for seasonal variations in RE generation and exposure to extreme weather events requires oversizing both RE and storage capacity. The practicality of large-scale storage solutions required for a complete shift to RE are currently unclear.
Nuclear power is advocated as an alternative clean and dispatchable energy source. Though nuclear power plants are often designed to run at full capacity to meet baseload, they can also be designed to ramp up or down at a rate of 3 to 4% of plant capacity per minute.
2. Cost competitiveness: Cost projections are optimistic for both RE-plus-storage and nuclear power. Solar-plus-storage bids have come at INR 3.10 – 3.50/kWh (with limited storage), and 100% reliability is estimated to cost below INR 6/kWh. RE-plus-storage price is on a declining trend.
3. Modularity: RE technology is modular, which allows deployment at a faster pace and varied scale. Traditional nuclear power has been very large, with higher cost and geographical requirements. SMRs are being designed to bring modularity through factory fabrication, which in turn will address time and cost overruns, and unlock nuclear power from large capital requirements. While RE, particularly solar, is an option for small consumers (household, commercial and farm use), SMRs, if successful, could fit for captive useby energy intensive industries.
4. Land intensity: As RE projects are land intensive, land acquisition and use are emerging as concerns in RE transition. India is already experiencing early land conflicts in case of RE projects. Even though nuclear power has specific geographical requirements, it is still considered the most land efficient among various energy technologies (see Fig. 4). SMRs used for captive use may further reduce land requirement.
5. Safety: Safety risks associated with nuclear power have been a major reason for public resistance and have caused slowdown in capacity expansion in the last two decades. Radiation leaks and exposure to natural disasters have led to nuclear accidents in the past. The risks are even higher for SMRs, as they tend to produce more voluminous and radioactive wastes. Lack of proper waste disposal infrastructure and robust regulatory safeguards heightens the risks.
RE waste also has potential toxic impacts on human and environmental health. However, studies estimate that RE (wind and solar) waste will still be less voluminous compared to coal and other wastes in 2050. A substantial part of RE waste could potentially be recycled. Rising concerns over RE waste and scarcity of materials and critical minerals are likely to boost the imperative for circularity in the RE supply chain.
Fig 4: Land use of energy sources per unit of electricity. Source: Our World in Data
Key challenges to realise India’s nuclear ambition
Nuclear power promises to be a complementary option for India’s 21st century energy portfolio. While its dispatchability and projected cost-competitiveness makes it an option for coal substitutions, potential for faster ramp-up and ramp-down makes it a complement to variable RE. However, nuclear power has to pass many tests before it can deliver on its potential.
– Social legitimacy: Risk perceptions associated with nuclear radiation have been a barrier to nuclear power projects in India and globally. The first test would be to gain social legitimacy through effective regulatory and enforcement mechanisms for secure waste management, better risk management, and public awareness.
– Finance & private sector participation: Nuclear power requires larger capital investment than its alternatives. India’s nuclear ambitions rely on the effective mobilisation of capital, which would be consequential to its cost competitiveness and pace of development. The scale of investment requires private capital and private sector participation, which could be unlocked through enabling regulations, policy certainty and risk sharing. The Government of India is already planning necessary legislative reforms and the private sector has shown keen interest.
– Domestic manufacturing: Nuclear power expansion requires heavy engineering manufacturing capacity. While this is a constraint with limited capacity in India (dominated by players like Larsen & Toubro, Bharat Heavy Electricals Ltd. and Bharat Forge Ltd.), it is also an opportunity to boost domestic capacity and reduce dependency on global equipment supply chains.
– Fuel supply security: Expanding nuclear capacity requires a strategic uranium fuel reserve to maintain supply chain resilience. India relies on Kazakhstan and Russia for additional uranium fuel due to insufficient domestic supply. Its historical three phase programme has always been on a path towards making thorium reactors viable, thereby utilising a fuel source which is available in abundance in India. While thorium reactors are yet to be deployed commercially, China built the world’s first operational (experimental) thorium reactor in April 2025. India’s prototype fast breeder reactor in Kalpakkam is yet to be commissioned.
– SMRs: SMRs are a promising option for flexible electricity generation and specific end-uses. Globally, there are more than 80 SMR designs and concepts at various developmental stages. India is also investing in SMR technology. The maturity of this technology will have significant implications for India’s nuclear development.
– Exposure to climate hazards: Existing and new nuclear power plants are susceptible to rising climate-related extreme weather events, including heatwaves, droughts, sea-level rise, altered precipitation patterns, and storms. In 2025, several nuclear power plants in Europe reduced operations or temporarily shut down due to heatwaves. The cooling water reached temperatures that were not suitable for effective cooling processes. Adaptation strategies and enhanced safety measures could help address these risks, though they may require additional costs and time.
If India can address these challenges, nuclear power may help reduce its reliance on coal. However, it is not a substitute for its RE pursuits. India has to be mindful that capital requirements for nuclear energy do not cannibalise RE investments. Rather, as nuclear power gestation period is longer, India must double down on RE deployment to meet the interim demands. Besides, India has to plan carefully for potential geopolitical instabilities (like USA’s attack on Iran’s nuclear sites) and its implications for pace of development, fuel supply security, and thus, for its energy independence goal. Overlooking these challenges may render nuclear power an expensive and hazardous distraction in the 21st century energy transition.
At COP26 in Glasgow, India announced a long-term ambition to achieve net-zero greenhouse gas emissions by 2070. Existing emissions-economy modelling studies highlight that India’s emissions show no sign of peaking before mid-century and will not reach net zero by 2070 in a business-as-usual scenario with current policies. Using a mixed methodology of expert elicitation and system dynamics modelling, this article examines the policy gap that needs to be bridged for India to realize its net zero by 2070 commitment. The study discusses a socio-economically sensitive policy mix that could set India on a trajectory to peak its emissions in a decade and zero out its carbon dioxide (CO2) emissions by mid-century, leaving about one gigaton of other greenhouse gases to be decarbonized by 2070 to meet India’s net-zero goal. The policy mix realizes this goal while maintaining the government’s fiscal stability, and increasing employment and GDP beyond business-as-usual. The trajectory reported here is one of many possible low-carbon development pathways that could potentially be a net socio-economic positive for India. However, barriers such as the country’s lack of clean energy innovation and industrial policies, the gap between its domestic manufacturing capacity and deployment requirements, individual sector readiness for decarbonization, and the distributional implications of government revenue shifts through the energy transition remain significant challenges that need to be addressed to realize these potential socio-economic benefits of decarbonization.
India’s clean energy landscape has developed rapidly over the last decade, enabled by an improving policy and regulatory architecture. Nevertheless, challenges remain that have impacted the scale and direction of climate finance flows to this sector, particularly from international sources. As India aims to further ramp up the pace of its RE deployment, both large- and small-scale, this brief analyzes these challenges from regulatory, institutional mandate, coordination and market development angles, and explores ways to address them.
Based on a literature review and 13 expert interviews in the large scale renewable energy, rooftop solar, and energy efficiency sectors, we find that regulatory challenges are relatively minor in the large scale RE sector, and that this may cause international funders to channel finance accordingly. In other words, the established governance structure facilitates a relatively easy flow of climate finance. On the other hand, the small scale renewables and energy efficiency sectors have received comparatively less policy support, and a lack of awareness and scale contributes to considerably less funding flowing to these sectors.
Overall, while the government has an important role to play in continuing to improve the policy and regulatory environment for clean energy finance – including international flows into the country – there is an equal role for funders to adapt their funding processes and scopes to the domestic context. Harmonizing these parallel efforts will require improved coordination between the various actors, including through more defined processes for consultations within the overall institutional architecture for climate action in India.
India’s buildings sector will play a critical role in meeting the country’s climate targets while promoting resilient cities (IEA 2021b). Buildings also represent the demand side of the energy transition, which is otherwise generally dominated by discourses on the supply side. The sector is undergoing clean energy transition while also contributing to it. Urgent political attention and coordinated action between national and sub-national actors across the buildings value chain are needed if energy transition goals must be achieved in a cost-effective and timely manner.
The Energy Transition Preparedness Initiative (ETPI) provides a framework to study and understand state-level plans, actions, and governance processes towards energy transition. The framework covers multiple themes in 24 indicators, representing crucial aspects of energy transition in the electricity, buildings, and transport sectors. The buildings sector covers many themes across five indicators.
Buildings are a state subject and therefore energy transition actions in the sector must be studied at the state level. Evidence suggests that buildings are contributing to national and state-level energy transition goals in many ways. There are examples of effective and ambitious policy initiatives with varying scales of action to facilitate transition. Despite the progress, greater efforts are required to implement stated policies in order to achieve the sector’s transition objectives.
This study aims to understand the energy transition preparedness of the buildings sector of 10 states in India and highlights good examples from the states. Drawing on information available in the public domain, it sheds light on the level of energy transition preparedness in these states for FY 2020-21.
This report studies energy transition preparedness across multiple states, facilitates cross learning between them, and promotes adoption of approaches suitable to their specific contexts.
