India targets 60% non-fossil fuel energy in its overall mix by 2035, with financing its next big hurdle - IEEFA | Institute for Energy Economics and Financial Analysis
Published May 31, 2026
India Aims for 60% Non-Fossil Fuel Energy in Its Overall Energy Mix by 2035, Financing Remains a Key Challenge
India has set an ambitious target to achieve 60% of its overall energy mix from non-fossil fuel sources by the year 2035. This goal is part of the country’s broader commitment to transition towards sustainable energy solutions and reduce its reliance on fossil fuels. However, securing adequate financing to support this transition is anticipated to be a significant challenge moving forward.
The Institute for Energy Economics and Financial Analysis (IEEFA) has highlighted the importance of this transition in its latest report, which outlines the current state of India’s energy sector and the necessary steps to achieve the 2035 target. The report emphasizes that while the goal is achievable, it requires substantial investment in renewable energy infrastructure, technology, and capacity building.
Current Energy Landscape
As of now, India’s energy landscape is heavily reliant on fossil fuels, with coal being the dominant source of electricity generation. According to the latest data, coal accounts for approximately 70% of the country’s total electricity generation. This dependence on fossil fuels not only poses environmental challenges but also raises concerns about energy security and sustainability in the long term.
In contrast, renewable energy sources, including solar, wind, and hydropower, have been gaining traction in recent years. The Indian government has implemented various policies and initiatives aimed at promoting renewable energy development, including the National Solar Mission and the Wind Energy Mission. These initiatives have led to significant growth in installed renewable energy capacity, which currently stands at over 150 GW.
Financing Challenges
Despite the progress made in expanding renewable energy capacity, financing remains a critical hurdle for India’s energy transition. The IEEFA report indicates that the country will require an estimated $20 billion annually to achieve its target of 60% non-fossil fuel energy by 2035. This figure underscores the need for innovative financing mechanisms and increased investment from both domestic and international sources.
One of the primary challenges in securing financing is the perceived risk associated with renewable energy projects. Investors often view the renewable sector as less stable compared to traditional fossil fuel investments. Additionally, regulatory uncertainties and bureaucratic hurdles can further deter investment in the renewable energy sector.
Policy Recommendations
To overcome these financing challenges, the IEEFA report outlines several policy recommendations aimed at enhancing the investment climate for renewable energy in India. These recommendations include:
- Streamlining Regulatory Processes: Simplifying the approval process for renewable energy projects can help attract more investors by reducing the time and costs associated with project development.
- Creating Stable Policy Frameworks: Establishing long-term policy frameworks that provide clarity and predictability for investors can enhance confidence in the renewable energy sector.
- Encouraging Public-Private Partnerships: Promoting collaboration between the government and private sector can facilitate investment and drive innovation in renewable energy technologies.
- Leveraging Green Financing: Expanding access to green bonds and other sustainable financing options can help mobilize capital for renewable energy projects.
International Cooperation
International cooperation will also play a crucial role in supporting India’s transition to a more sustainable energy mix. The IEEFA report emphasizes the importance of collaboration with global financial institutions, foreign investors, and technology providers. Such partnerships can provide the necessary financial resources and technical expertise to accelerate the deployment of renewable energy projects in India.
Furthermore, India’s participation in international initiatives, such as the International Solar Alliance, demonstrates its commitment to fostering global cooperation in renewable energy development. These efforts can help mobilize additional resources and facilitate knowledge sharing among countries working towards similar energy transition goals.
Conclusion
India’s target of achieving 60% non-fossil fuel energy in its overall energy mix by 2035 represents a significant step towards a more sustainable and secure energy future. However, addressing the financing challenges associated with this transition will be critical to realizing this goal. By implementing the recommended policy measures and fostering international cooperation, India can enhance its investment climate and drive the growth of renewable energy in the coming years.
The path to achieving this ambitious target will require collaboration among various stakeholders, including government agencies, private investors, and international partners. With concerted efforts and strategic investments, India can pave the way for a cleaner and more sustainable energy future.
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