Indian Economy - CMA

Energy Industry of India

India is the world’s seventh largest producer of energy and the fifth largest energy consumer. In any economy, there is a direct correlation between the degree of economic growth, per capita income, and the per capita energy consumption. In this article, we will take a quick look at the energy sector in India.

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Energy Sector in India – An Overview

Energy sources are classified into two types – conventional and non-conventional.

Conventional or Non-renewable Energy Sources

energy sector in india

                                                                                                                                         Source: Pixabay

The conventional energy sources also called non-renewable energy sources, are coal, petroleum, and electricity. They are also called commercial energy sources because they come with a price that the consumer bears.

Some examples of Non-Renewable Energy Sources are

  • Solar Energy
  • Wind Energy
  • Bio-Energy
  • Small Hydropower

However, being non-renewable, these sources will eventually run out. Further, they create a lot of pollutants in the environment.

Non-Conventional or Renewable Energy Sources

Due to the increasing population and a subsequent increase in demand for energy, the energy industry of India has been facing a crunch for many years.

As a result, there has been a steep rise in oil prices, making it costlier for the normal individual. It is evident, that conventional sources alone cannot solve India’s energy crisis.

Therefore, in such a scenario, it is imperative that we explore alternative sources of energy – renewable energy sources.

Learn about Nuclear Energy and Environmental Consequences of Energy here in detail.

Some Examples of Renewable Energy Resources are

  • Bio-Energy
  • Bio Gas
  • Biomass
  • Solar Energy
  • Small Hydropower
  • Wind Power
  • Electric Power


We obtain this energy from organic matter. Two forms of bio-energy are Biogas and Biomass.


Biogas is where we put cow dung into a Gobar Gas Plant to obtain Bio Gas. There are over 4.5 million household biogas plants mainly for producing cooking fuel in our country. India is the second largest producers of biogas plants in the world.


This is an important energy source for India. It is a fuel that we obtain from organic materials. Around 32% of our country’s total primary energy comes from biomass and more than 70% of our population depends on it for their energy requirements.

Solar energy

This is the energy produced from the sunlight. As on December 31, 2018, India has an installed solar energy capacity of 25.21 GW. With around 300 clear sunny days in India every year, the solar energy incidence on the Indian soil is around 5000 trillion kilowatt hours. To put it into perspective, the solar energy available in one year exceeds the possible output of all the fossil fuel energy reserves in the country.

Small hydro-power

Hydropower projects are classified into small and large hydropower projects. Small hydropower projects are ones with a capacity of up to 25 MW. This is the generation of hydroelectric power on a scale suitable for a local community and/or industry. Further, in India, the estimate for power generation from such plants is about 20,000 MW.

Wind power

Windmills harness the power of wind and convert it into wind energy. India has the fourth largest wind power capacity in the world of 34.293 GW. Many investors, including NRIs, are taking up renewable energy projects in states like Gujarat, Karnataka, Andhra Pradesh, and also Kerala.

Electric Power

Electric power is an important aspect of the economic development of a country. It has both commercial and non-commercial uses. Commercially, electric power is used in industries, agriculture, and also transport, etc. The non-commercial uses are domestic lighting, cooking, and also the use of domestic appliances, etc.

Solved Question for You

Q1. What are the main renewable energy sources in India?

Answer: The main sources of renewable energy in India are solar energy, wind energy, bio-energy, and also small hydropower, etc.

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