Material, storage constraints key hurdles in clean energy push: Economic Survey

New Delhi: Material intensity and energy storage requirements have emerged as two major roadblocks to the greater utilisation of clean energy sources as India moves ahead with its Nationally Determined Contribution (NDC) targets, the Economic Survey has said.

The Economic Survey for 2025–26 was tabled in Parliament on Thursday.

India is adopting a multi-faceted approach to mitigate global warming by diversifying its energy sources and enhancing access, while increasing the share of non-fossil fuels, improving energy efficiency and promoting stability across its energy systems.

These strategies are aligned with the country’s development and sustainability objectives, and a comprehensive set of policies has been implemented to achieve the 2030 NDC targets.

The energy transition is being pursued through initiatives across sectors such as nuclear, solar and wind energy, green hydrogen, battery storage and critical minerals, addressing energy security and transition imperatives simultaneously. However, despite progress in expanding non-fossil fuel energy, challenges remain, the Survey noted.

Renewable energy systems such as solar and wind are highly material-intensive and require capital-intensive energy storage technologies for integration into the power grid, it said, adding that material and storage requirements represent the two key constraints to wider adoption.

The material challenge extends beyond access to critical minerals and has implications for mining and energy requirements for material processing.

The survey also said that to sustain India’s renewable energy momentum, challenges such as high capital costs, land acquisition delays, and grid availability need to be addressed through appropriate instruments including innovative financing mechanisms and optimised project execution.

Further, large-scale integration of Battery Energy Storage Systems (BESS) and Pumped Storage Hydropower (PSP) can address the inherent variability of renewables, ensure grid stability and peak-load management, and enable reliable, large-scale adoption of renewables to support the transition to a clean, secure, and resilient power system.

On energy technology, the Survey said the challenge is not limited to the development of new technologies but also involves substantial investment needs. The unit cost of installed storage capacity depends on the number of times each megawatt of storage is used annually, which is likely to be lower for short-term storage capacities than for long-term ones.

The Central Electricity Authority has estimated that India will require about 336 gigawatt-hours of energy storage capacity by 2029–30 and 411 GWh by 2031–32 to support reliable integration of renewable energy sources. To enable this scale-up, a coordinated set of policy, regulatory, demand-side and supply-side measures is being implemented.

The Survey observed that metals such as lithium, cobalt, nickel, copper and rare earth elements have emerged as strategic chokepoints in shaping a low-carbon economy, influencing energy security, industrial competitiveness and geopolitical power, as reflected in trade restrictions imposed by source countries on exports of critical minerals.

The document noted that India has already surpassed the target of 50 per cent installed power capacity from non-fossil fuel sources, which stood at 51.93 per cent at the end of December 2025, supported by record annual additions of renewable energy capacity.

During 2025-26, up to December 31, a total of 38.61 GW of renewable energy capacity was installed, including 30.16 GW of solar, 4.47 GW of wind, 0.03 GW of bio-power and 3.24 GW of hydro power.

According to the International Renewable Energy Agency’s Renewable Energy Statistics 2025, India now ranks fourth globally in total installed renewable energy capacity, after China, the United States and Brazil, underscoring its growing influence in global clean energy markets.