February 18, 2026,  New Delhi—India can build on its clean cooking success by expanding decentralized biogas and electric cooking alongside liquefied petroleum gas (LPG) and piped natural gas (PNG), according to a new report.

The report, India’s Clean Cooking Shift: Scaling Non-Fossil Fuel Solutions by the International Institute for Sustainable Development (IISD), finds that non-fossil options—particularly decentralized biogas and electric cooking—can work at scale if supported by finance, services, and targeted regulations.

“Building on the success of LPG, India now has an opportunity to gradually widen its clean cooking options by unlocking non-fossil fuel solutions alongside existing fuels,” said Sunil Mani, policy advisor at IISD. “A more diverse cooking energy mix can strengthen energy security, support climate goals, and help manage costs for both families and the government over time. The question is not whether LPG has worked—it clearly has. The question is how India builds on this success while gradually reducing long-term costs, import dependence, and emissions.”

Over the past decade, India has made major gains through flagship initiatives such as the Pradhan Mantri Ujjwala Yojana (PMUY) and the rapid build-out of city gas distribution networks. LPG connections doubled from 16.6 crore in 2016 to over 33 crore [TP1.1]in 2025, while domestic PNG connections grew from about 0.33 crore to over 1.6 crore. Yet 37% of Indian households still rely primarily on solid fuels for cooking.

Connection growth has also outpaced fuel use. Domestic LPG consumption grew by 48% between 2015–16 and 2023–24, and annual PNG consumption rose by only 11% between 2021–22 and 2023–24 despite a 40% rise in connections. The gap points to affordability constraints, particularly among low-income and rural households who are unable to rely on LPG or PNG as their primary cooking fuel.

While LPG has expanded access to cleaner cooking for millions of households, it has also increased India’s exposure to international fuel markets. India’s annual LPG consumption more than doubled between 2011–12 and 2024–25, rising from around 15 million metric tons to 31 million metric tons, with more than 93% of this growth met through imports. This reliance on imported fossil fuels heightens fiscal exposure to volatile global prices and raises long-term energy security concerns. The report finds that gradually scaling non-fossil alternatives alongside LPG and PNG offers a pathway to improved affordability, greater energy security, and alignment with India’s long-term climate commitments.

Field research in Punjab, Rajasthan, Uttarakhand, Karnataka, and Delhi shows that decentralized biogas systems can provide a locally available renewable solution in rural areas.

Households adopting biogas reduced firewood use by about 70% annually, improving health and environmental outcomes. Users reported high satisfaction and minimal day-to-day maintenance challenges when reliable operations and maintenance networks and accessible financing are available. Prefabricated models performed well due to faster installation and lower maintenance needs.

Upfront costs remain the main barrier: even with a 40% capital subsidy, household contributions can be prohibitive for many households, stressing the value of additional financial support.

In urban and peri-urban areas, electric cooking is becoming an increasingly competitive option. At current prices, annual cooking costs are estimated at INR 6,800–6,900 annually for LPG or PNG, compared to INR 5,800–5,900 for electric cooking. This cost advantage persists even with a moderate increase in electricity tariffs.

Adoption of electric cooking remains limited due to high upfront appliance costs, cooking habit adaptation, reliable electricity supply concerns, and gaps in repair and maintenance services. Many households currently use electric cooking as a backup rather than a primary cooking option.

The analysis shows that scaling electric cooking in urban areas can reduce LPG demand and imports immediately, even before long-term impacts materialize. Under higher adoption scenarios, urban e-cooking could halve LPG demand by mid-century, significantly reducing import dependence while easing pressure on subsidy budgets.

“While the impact by 2030 may be modest, sustained adoption could deliver significant subsidy savings, potentially up to INR 2.4 trillion by 2050. Over time, these savings could be utilized to further support clean cooking consumption among low-income households,” Mani said.

The report recommends a sequenced and targeted approach to diversification, with LPG and PNG continuing to play a critical role as primary fuel while non- fossil options are scaled through focused policy support.

Key recommendations include:

• targeted incentives to lower upfront costs for electric cooking and biogas technologies.
• redirecting a small share of future LPG subsidy savings to support non-fossil cooking options for low-income households.
• integrating clean cooking diversification into India’s climate, energy security, and public health strategies.
  strengthening after-sales service and local capacity to ensure robust operation and maintenance and sustained adoption of non-fossil clean cooking solutions.

“India’s clean cooking story is a success—but it is also evolving. Including non-fossil cooking solutions now allows the country to protect past gains, reduce future risks, and align clean cooking with a net-zero, fiscally resilient energy system,” concludes Mani.

Media contacts:

Sunil Mani, Policy Advisor, [email protected] 
Madhulika Verma, Senior Communications Officer, [email protected]

December 16, 2025, New Delhi — Government support for fossil fuels in India fell to five times the level of clean energy in financial year (FY) 2024—the smallest gap in 5 years—as clean energy subsidies rose sharply, according to a new report released today.

Clean energy subsidies increased by 31% year-on-year to nearly INR 32,000 crore (USD 3.9 billion) in FY 2024, reflecting continued policy support for renewables, according to Mapping India’s Energy Policy 2025, a report by the International Institute for Sustainable Development.

Fossil fuel subsidies, by contrast, fell by 12%—the sharpest decline since the pandemic—although this drop was driven by temporary price dynamics rather than strategic policy reforms. Together, these trends have helped lift India’s non-fossil electricity capacity above 50% in 2025, 5 years ahead of schedule and a key milestone under India’s updated nationally determined contribution 2.0.

These trends signal progress in energy transition, but sustaining the momentum hinges on diversifying major energy-related public sector undertakings (PSUs). India’s public financial institutions, such as the Rural Electrification Corporation and Power Finance Corporation, are already expanding lending for renewables and distribution reforms. However, among PSUs, total capital allocation remains heavily skewed toward fossil fuels. In FY 2024, 83% of capital expenditure by central energy-related PSUs continued to flow into fossil fuel sectors, including coal mining, refinery construction, and oil and gas development. Clean energy diversification among state-owned enterprises (SOEs) remains limited in scale, raising the risk of locking in energy infrastructure that may not align with India’s long-term climate objectives.

“India’s budget shows encouraging signs of a gradual shift toward clean energy, but larger public financial flows reveal a deeper issue,” said Swasti Raizada, senior policy advisor at IISD and a lead author. “New investments in fossil assets are increasingly moving onto the balance sheets of India’s state-owned enterprises due to weak market signals. As critical state actors in ensuring a just and equitable energy transition, SOEs will need stronger policy signals and robust diversification plans to actively participate in India’s clean energy transition.”

The report also finds that electricity subsidies climbed to an all-time high of INR 2.1 lakh crore (USD 25 billion) in FY 2024—an 18% increase, despite electricity demand growing by only 7%. This widening gap between the cost of supply and consumer tariffs continues to strain state finances, indicating that efficiency gains and financial reforms in the power distribution sector are unable to contain rising subsidy burdens.

At the same time, India continued to rely heavily on revenue from fossil fuels, which brought in nearly INR 9 lakh crore (USD 108 billion)—about 16% of all government revenue across the centre and states. Fossil fuels still make up 90% of the country’s energy-related revenues, through excise duties, VAT, and GST collected on coal. This heavy dependence exposes public finances to global fuel price volatility and makes it harder for governments to create stable, long-term funding for clean energy.

"Fossil fuel use imposes significant social costs, but 79% of India’s fossil fuel tax revenue is paid by consumers,” said Saumya Jain, policy analyst at IISD and co-author. “The recent removal of the GST compensation cess on coal and reduction of taxes on ICE vehicles has diluted the polluter-pays approach. The government should align fossil fuel taxation measures to better reflect social and environmental costs, while exploring other goods and services where tax cuts can increase buying power for consumers. Some of the revenues from higher fossil taxation can be used to scale clean energy.”

The report sets out three priority recommendations to help redirect government support toward clean energy while supporting India’s development goals:

1. Improve targeting of electricity subsidies

   Better subsidy delivery—through smart metering, direct benefit transfers, and performance-linked grants to states—can help maintain affordability while containing fiscal growth in subsidy outlays. These reforms also strengthen distribution company finances and enable renewable energy integration through improved price signals.

2. Guide SOE capital expenditure toward clean energy priorities

   As India expands offshore wind, battery storage, and green hydrogen, SOEs can play a catalytic role by diversifying portfolios, adopting sustainability metrics, and reinvesting in emerging clean-tech supply chains. Shifting a part of SOE capital expenditure from fossil fuel expansion to clean infrastructure can accelerate India’s long-term energy independence goals.

3. Build fiscal resilience through revenue diversification

   Introducing next-generation measures—such as targeted carbon pricing, green taxes, and broader tax-base adjustments—can help gradually reduce reliance on volatile fossil revenues while supporting social and environmental objectives.

Media Contacts:

Swasti Raizada, senior policy advisor,  [email protected] 

Madhulika Verma, senior communications officer, [email protected]

December 9, 2025, New Delhi—India can secure reliable, round-the-clock clean power at costs competitive with new thermal plants by 2030 under realistic market conditions, with the possibility of achieving cost parity as early as 2025 under more favourable circumstances, a new report found.

The study, Budgeting for Net Zero: Powering India’s Reliable Clean Energy Future by the International Institute for Sustainable Development (IISD) and the Center for Study of Science, Technology and Policy, finds that firm and dispatchable renewable energy (FDRE)—hybrid projects combining solar, wind, and battery storage—can match or undercut the cost of new thermal power plants when developers are able to monetize both a portion of surplus electricity generated by oversized renewable sources and additional storage capacity.

FDRE projects install slightly more renewable and storage capacity than required for their contracted supply; selling this surplus power plays a critical role in lowering overall costs. FDRE—one of several types of tenders for firm clean energy—is already much cheaper than new coal when the full social costs of thermal power plants are considered. 

Without accounting for social costs, the study identifies three cost-parity timelines, depending on how much surplus power developers can sell into the market:

• 2025 when 100% of surplus power is monetized,
• 2030 when 50% of surplus power is monetized, and
• 2047 when only 30% of surplus power is monetized.

“Firm and dispatchable renewables are not just a clean alternative—they are an increasingly competitive source of reliable power. With thoughtful tender design and market reforms, India can tap into FDRE to meet rising electricity demand, cut long-term costs, and build a power system that is both resilient and future-ready,” said Sunil Mani, policy advisor at IISD.

The study examines when and under what conditions FDRE can compete with new thermal, whether government support is needed to accelerate deployment, and the macroeconomic impacts of scaling FDRE. It also evaluates how tender design, developer strategies, and electricity market reforms influence FDRE’s affordability.

FDRE marks an important shift in India’s clean energy procurement. Instead of simply adding variable renewable energy to the grid, FDRE tenders require developers to supply clean electricity at specific, often peak hours aligned with distribution companies’ (discoms’) demand patterns. This is becoming increasingly relevant as India’s power needs rise and discoms face higher costs from managing variability through short-term markets and limited access to flexible supply. FDRE offers one pathway to scale renewables while maintaining reliability and cost predictability for both discoms and consumers.

Although early FDRE tenders have faced challenges—such as uncertainty around the optimal renewable–storage mix and the monetization of surplus power—9.7 GW of FDRE capacity is already under construction, and bid prices closely match the cost projections in the study.

The report stresses that FDRE is not meant to replace all other clean energy solutions. Because FDRE guarantees firm delivery, it is naturally more expensive than standalone solar, wind, or storage when round-the-clock supply is not required. The authors of the report highlight that a balanced approach—deploying FDRE where demand profiles justify it and expanding lower-cost clean energy and storage elsewhere—will deliver the most efficient outcomes for India’s evolving power system.

“FDRE can play an important role alongside standalone renewables, storage, and smarter grid management to support India’s clean energy transition,” says Dr Anasuya Gangopadhyay,  senior associate in the Climate Change Mitigation team at CSTEP.

Beyond Energy Costs: Health, climate, and jobs

The report also highlights that comparing FDRE and coal solely on energy costs ignores coal’s full societal costs.  When air pollution and climate damages are included, the effective cost of new pithead coal rises from INR 4.65/kWh to INR 13.19/kWh, making FDRE immediately cheaper in all scenarios.

In addition, FDRE provides energy security advantages: it reduces exposure to fossil fuel price volatility and can be deployed in 2–2.5 years, compared to 5–7 years for new coal plants.

Beyond costs, scaling FDRE would raise India’s GDP by 1.8% by 2050, create 64,000 net new jobs, and reduce public health costs linked to air pollution while strengthening energy security by lowering dependence on fuel imports.

The study identifies several policy options to strengthen FDRE tender design and create market conditions that support deployment, including more flexible demand-fulfilment ratios, capacity payments for storage, improved penalty structures, expanded revenue opportunities, and enhanced resource adequacy planning at the state level.

Media contacts:  

Sunil Mani, policy advisor, IISD – [email protected]

Madhulika Verma, senior communications officer, IISD: [email protected]

About CSTEP

The Center for Study of Science, Technology and Policy (CSTEP) is one of India’s leading think tanks, with a mission to enrich policy-making with innovative approaches using science and technology for a sustainable, secure, and inclusive society. Our current work is anchored in the grand challenges of our time, namely, Clean Energy Transition, Clean Air for All, and Sustainable and Secure Future for All. Our work focuses on ensuring that our ideas are born out of evidence and implementable at scale. We are continuously exploring new ideas that will play a crucial role in addressing our grand challenges. We are committed to an Ecosystem Approach and to achieving this through multiple partnerships across the ecosystem.