Two contradictory trends have emerged from India’s energy transition. In one, the country has met its renewable energy goal early and is on track to surpass it, but it is also adding coal to its mix of new power sources. In the other, new power-hungry AI data centers are increasing the country’s energy requirements, but AI itself may also reduce consumption and increase energy efficiency by supporting technological innovation.
Renewables… with coal?
India hit its target of sourcing 50 percent of its energy from renewables five years ahead of schedule. Despite the aggressive push toward clean energy, however, the country will still be adding coal power at the same rate as renewables to meet its future energy needs. India’s rapid expansion in solar manufacturing and favorable policies have accelerated the clean energy transition. But India’s approach is deeply pragmatic, as Samir Shah, Managing Director of Peak Sustainability Ventures, said in a virtual discussion at the 2025 SOVS Climate Tech Summit.
“Ironically, we will be adding coal at the same level as we’re adding renewables. And we are also going to add nuclear, which is, you know, not really a clean fuel,” Mr. Shah says. He explained that while renewables are growing quickly, the mix of fuels is seen as necessary for India to support its economic ambitions and population growth.
Shah went on to describe the dual challenge: as India strives to “bend the curve on climate and to reduce the energy intensity per unit of GDP,” it must still expand its energy supply, including fossil fuels, to remain economically competitive.
The panelists pointed to innovations in biofuels, global technology partnerships, and policies aimed at improving efficiency. But for now, the country’s strategy is to deploy all available resources. As Mr. Shah says, “Do what you can with what you have.”
India now stands as a global leader in renewable energy progress, but coal remains firmly embedded in its path to growth.
AI problems, AI solutions
AI data centers are increasing energy consumption in India, and this trend is expected to accelerate. Data centers, especially those supporting AI applications, consume about 0.5 percent of India’s electricity today, and they are projected to consume up to 4 percent by 2030.
AI may have some solutions to the problem it is causing, however. AI can help reduce energy consumption mainly through technological innovations that improve efficiency in energy-intensive applications. Even in the data centers that AI require. Panelists at the summit discussed a “direct-to-chip cooling” technology, for example, which cools only the chip inside servers instead of the entire data center.
Additionally, AI can optimize resource allocation and process automation within grids and facilities, improving the efficiency of power supply systems. The combination of targeted cooling and AI-driven optimization suggest practical ways AI can directly and indirectly reduce total energy consumption.
The takeaway may be that India has a challenge ahead, discovering how to manage growth and decarbonization in parallel. The path the country is taking appears to rely on innovation and pragmatism to gradually shift toward cleaner energy and resilience. The question remains whether the climate has time for a slow transition.
