India Faces Grid Bottlenecks as Renewable Power Demand Surges

Centrum Institutional Research forecasts that renewable capacity will grow by 45 to 50 gigawatts each year for the next half-decade. Early indicators for the 2026/2027 fiscal year support this trajectory, with 6.8 gigawatts of solar and 712 megawatts of wind capacity already installed in the first two months. This momentum aligns with India’s broader mandate to reach 500 gigawatts of non-fossil fuel capacity by the end of the decade, bolstered by favorable regulatory policies and the rising integration of battery energy storage systems.

Despite hitting the milestone of sourcing 50% of its electricity from non-fossil fuels five years ahead of schedule, the infrastructure reality remains complex. Nuvama analysts expect solar capacity to surge by 22% annually through 2035, fueled largely by the energy-hungry data center sector. Yet, the national electricity grid is struggling to keep pace with this influx of clean power. This disconnect has resulted in frequent energy curtailments, creating a systemic risk that could stall the very progress the government aims to champion.