"India’s Clean Energy Story Is Just Getting Started", Says Vinay Rustagi, CBO, ...
As geopolitical uncertainty and rising commodity prices reshape global energy markets, India’s renewable energy sector is navigating both opportunity and disruption. From the impact of the Middle East conflict and battery storage economics to open access reforms and the government’s 500 GW renewable energy target, the sector is entering a new phase of expansion and transition.In an interaction with BW Businessworld, Vinay Rustagi, CBOPremier Energies Ltd discusses how the Middle East conflict is influencing the energy sector, the drivers behind Premier Energies’ strong financial performance, India’s progress toward its renewable energy goals, the growing viability of storage, floating solar, open access reforms and the readiness of the industry for ALMM implementation.
How has the Middle East conflict impacted the energy sector and Premier Energies in particular? How is the company planning ahead in response to the situation?
The Middle East conflict serves as a wake-up call for the energy sector. It is a significant moment because countries and consumers are being forced to rethink their energy strategies. There is now a greater need to reduce dependence on fossil fuels, lower reliance on imports and build a more resilient and secure energy mix. Over time, this is expected to accelerate the shift toward renewable energy, which is positive for the sector overall. However, the conflict has also created second-order effects, including rising prices of commodities such as aluminium, copper and plastics, along with increased freight rates. These developments have affected pricing, profitability and margins across the industry.
For Premier Energies, the long-term demand impact may take time to materialize because it depends on policy signals from governments and how those changes filter through supply chains. The more immediate impact has been commodity price inflation and related business pressures. Despite this, Premier Energies has been able to mitigate most of the cost increases due to the scale of its operations and prudent risk management practices. The company has focused on protecting margins while remaining vigilant about how the broader sector evolves in response to geopolitical developments.
Premier Energies recently delivered strong quarterly results. What is driving this performance?
The company’s recent performance reflects years of sustained investment across multiple areas of the business. Premier Energies attributes its results to long-term investments in people, technology and manufacturing processes. Another major factor has been the company’s consistent focus on risk management. This includes structured hedging programmes, sharing risks with customers, maintaining supply chain buffers and developing strong supplier relationships.
These measures have helped the company navigate a highly volatile environment while maintaining stability in profitability and operations. The ability to manage supply chain disruptions and commodity price increases has also contributed to the company’s performance. Premier Energies views its recent results not as a short-term outcome but as the product of years of preparation and operational discipline. According to the company, its ability to withstand challenging conditions while continuing to perform is rooted in decisions made over a long period, particularly around manufacturing resilience and supply chain management.
Is India on track to achieve its 500 GW renewable energy target by 2030?
When the government announced the renewable energy target around 2022, many considered it overly ambitious and difficult to achieve. However, recent progress suggests otherwise. In FY26, India commissioned approximately 40–45 GW of solar capacity and 6 GW of wind capacity, representing record additions and exceeding government expectations. Based on current trends, there is growing confidence that India may not only meet but potentially exceed the target.
Several factors are contributing to this momentum. Demand for renewable power is rising across households, agriculture, commercial consumers and discoms. At the same time, the government remains focused on reducing dependence on imported fossil fuels and increasing the share of clean energy in the overall energy mix. Additional growth drivers, including green hydrogen and electric mobility, are also increasing demand for renewable power. Taken together, these factors suggest that India’s renewable energy trajectory remains strong and could surpass official expectations over time.
India has added significant solar capacity, but battery storage remains limited. Are we reaching a stage where battery storage can become commercially viable?
Adding renewable capacity beyond a point without adequate storage is not sustainable because it creates grid imbalances. At present, India is witnessing excess power supply during midday hours when solar generation peaks, while supply shortages continue during morning and evening peak demand periods. This imbalance has widened the pricing arbitrage between peak and off-peak hours to nearly ₹8–10 per unit. That gap itself is becoming a strong economic case for storage technologies.
Although battery costs have increased over the last six months, the commercial viability of storage solutions — including batteries and pumped hydro — is now stronger than before. The economics increasingly support deployment because storage can help shift surplus renewable energy generated during the day to periods of higher demand. As a result, significant storage capacity is expected to come online over the next two to three years. More than 50 GWh of battery storage capacity is currently under construction, while around 80–90 GWh of pumped hydro storage capacity is expected to become operational over the next three to four years.
The sector increasingly recognizes that renewable expansion must be accompanied by storage if India wants to maintain grid stability while scaling clean energy generation.
The government plans to invest over Rs 5,000 crore in floating solar. Who is likely to benefit, and do we have the infrastructure to utilize such investments effectively?
India has the infrastructure required to support floating solar deployment. The biggest beneficiary, ultimately, is expected to be the consumer. The primary rationale behind floating solar is to reduce land availability and transmission constraints typically associated with ground-mounted solar projects. Floating solar eliminates the need for additional land because installations are built on water bodies, many of which are already owned by government agencies.
In many cases, these water bodies already have transmission infrastructure nearby, reducing project development timelines and costs. This makes floating solar easier and faster to deploy compared to conventional projects. By easing land and transmission bottlenecks, floating solar can accelerate renewable capacity addition and improve energy access. As a result, consumers stand to benefit through increased clean energy availability.
For Premier Energies, government initiatives such as floating solar, PM Surya Yojana, the Kusum scheme and green open access reforms are expected to directly support demand growth. As one of the country’s larger module manufacturers serving multiple segments across India, the company expects to benefit from rising sector demand.
Open access reforms are gaining traction. Are state-level policies becoming conducive to an open access system?
Open access is one of the sector’s least-discussed success stories. While attention often focuses on schemes such as PM Surya Yojana or Kusum, open access capacity addition has increased nearly fivefold over the last two to three years. The market is increasingly moving toward disintermediation, similar to trends seen in financial services where consumers are bypassing traditional intermediaries. In energy, consumers are increasingly choosing to buy power directly from generators instead of relying on discoms as intermediaries.
Government reforms have supported this transition. Commercial and industrial consumers are expected to see tariff reductions over time and will increasingly have the flexibility to purchase electricity from multiple discoms or directly from generators. Another important reform has been lowering the threshold for open access eligibility from 1 MW to 100 kW, significantly expanding the addressable market. Given these changes, open access is expected to grow substantially and become an increasingly important segment within India’s power market.
If open access becomes a major success story, how will the relationship between discoms and private companies evolve in the future?
Traditionally, discoms have operated through two primary business models. The first involves investing in, building, upgrading and maintaining electricity distribution networks. The second involves purchasing power from generators and supplying it to consumers. The second part of this model is increasingly being disrupted. With greater competition and more private participation, consumers are beginning to purchase electricity directly from generators rather than relying solely on discoms. However, this does not diminish the role of discoms. Their core responsibility going forward is expected to shift toward maintaining and modernizing distribution infrastructure. This includes digitizing networks, upgrading systems and ensuring grid reliability, especially as renewable energy penetration increases.
With higher renewable capacity in the system, managing grid imbalances and maintaining stable distribution networks will become increasingly important. Discoms are likely to continue functioning as natural monopolies when it comes to owning and maintaining distribution infrastructure, even as the electricity supply business becomes more competitive. As open access expands, the role of discoms may evolve rather than diminish, with infrastructure management becoming more central to their long-term business model.
The ALMM deadline is approaching on June 1. What developments are taking place, and is there any expectation of an extension?
ALMM implementation is progressing through two separate tracks. Private sector projects are expected to comply beginning June 1, while government projects awarded by various agencies follow an adjusted timeline linked to the September 2025 bidding date. From June 1 onward, nearly 60–70 per cent of the market is expected to transition toward ALMM compliance, translating into an estimated module demand of around 35–40 GW peak.
According to industry assessments, manufacturers are prepared for the transition. India’s domestic cell manufacturing capacity has nearly tripled over the last two years, supported by substantial investment across the sector. Capacity is expected to increase further to nearly 60 GW by the end of the year. From the perspective of manufacturing scale, technology and quality, the industry considers itself ready for implementation. Companies have had significant time to prepare, and investments made over recent years are now supporting compliance readiness. The transition is expected to strengthen domestic manufacturing and deepen localization across the solar value chain.
What are Premier Energies’ plans going forward?
The clean energy sector continues to present strong opportunities due to rising demand and ongoing technological advancement. Premier Energies sees considerable scope for expansion, both horizontally and vertically, across clean energy technologies. The company’s broader aspiration is to become an integrated supplier of clean energy equipment spanning multiple technologies and market segments.
As part of this strategy, Premier Energies is expanding into batteries, inverters and transformers while continuing to evaluate additional opportunities within the clean energy ecosystem. The company expects several of these plans to materialize over the coming years as the market continues to evolve and demand for renewable energy infrastructure grows. Premier Energies views the sector as entering an important growth phase, driven by policy support, decarbonization efforts and increasing consumer demand for clean energy solutions.
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