Currently, coal, oil and natural gas are the three primary energy sources in India and India ranks fourth amongst the coal-producing countries in the world, producing 222.4 million metric tonnes of coal in 2011. Being the most abundant fossil fuel in India, coal continues to be one of the most important sources for meeting the domestic energy needs and accounts for almost 63 percent of the country’s total energy supplies. Despite increasing dependency on commercial fuels, a sizeable quantum of energy requirements (40 percent of total energy requirement), especially in the rural household sector, is met by non-commercial energy sources, which includes wood, crop residue and animal waste for cooking and heating. Other existing energy options in rural communities, such as diesel generator sets and kerosene lanterns, can have a bad impact on the environment. They are polluting, prohibitively expensive and logistically difficult to disseminate.
Resource augmentation and growth in energy supply has not kept pace with increasing demand and, therefore, India continues to face serious energy shortages. To this day more than 56 percent of households in India do not have electricity connections. Moreover, poor quality of power supply and frequent power cuts and shortages impose a heavy burden on India’s fast-growing industry. It is estimated that primary energy demand in India will double by 2030.
Renewable energy sources offer viable options to address the energy security concerns of a country. In recent years the country has invested in renewable sources of energy such as wind energy. India is the world’s fifth largest producer of wind power after Denmark, Germany, Spain and the USA.
There is a significant potential in India for the generation of power from renewable energy sources—, small hydro, biomass and solar. In July 2009, India unveiled a 19 billion USD plan to produce 20,000 MW of solar power by 2020, the "National Solar Mission". Whether this mission will be successful remains to be seen.