COP30: India will decide fate of global energy markets in the next decade

An Indigenous man takes part in a demonstration in defense of the Amazon during the COP30 U.N. Climate Summit, in Belem, Para state, Brazil, Thursday, Nov. 6, 2025. (AP Photo)

The International Energy Agency’s 2025 World Energy Outlook, released during the UN climate talks in Brazil, paints an optimistic picture. Renewable energy is surging, electricity demand is about to transform global energy systems, and coal and oil will begin their long decline within the next decade. However, beneath this reassuring narrative lies a far more unsettling truth, one that becomes clear only when reading this report alongside another study released earlier this year by the United Nations Environment Programme.

Governments worldwide plan to produce more than double the amount of coal, oil and natural gas by 2030 than would be consistent with limiting global warming to 1.5 degrees Celsius. As many as 11 of the 20 largest fossil fuel-producing nations have actually increased their expansion plans since 2023, according to the UN Production Gap Report 2025.

“The IEA’s latest report underscores the daunting challenge ahead for rapidly decarbonizing the world's economy,” said Rachel Cleetus, Senior Policy Director for Climate and Energy at the Union of Concerned Scientists. “A fast and fair phaseout of fossil fuels is essential, yet nations continue to recklessly expand these polluting sources of energy.”

Stephan Singer, Senior Advisor for Global Energy at Climate Action Network International, was more pointed. “In a nutshell, the IEA is backsliding,” he said. The IEA sees a world where markets self-correct, but the production gap report documents a reality where governments actively bet against that correction.

India’s outsized role

The IEA projects that India will account for roughly 80% of global electricity demand growth by 2035. The country will add the equivalent of an entire Bengaluru’s population annually for the next decade. Air conditioners will proliferate, transport will electrify and GDP will expand at around 6.1% yearly, which is faster than any other major economy. India’s energy appetite will reshape global markets more profoundly than any nation since China’s industrial ascent, according to the IEA World Energy Outlook 2025.

Yet, here is where the analysis becomes more complex. India is simultaneously excelling at renewable deployment while its overall energy infrastructure strains under the weight of its ambitions. Across the country, 44 GW of completed solar and wind projects sit idle, unable to transmit their power into the grid. In Rajasthan alone, 8 GW of capacity sits stranded while another 3.8 GW faces curtailment, which is power literally thrown away.

India has inverted its investment patterns dramatically. For every $1 spent on fossil fuel power plants, $4 now go to renewables, a complete reversal from a 1:1 ratio a decade ago. In fact, India met its 50% non-fossil electricity capacity target five years ahead of schedule.

“This report confirms India is a global leader in energy transition, having met its 50% non-fossil capacity target five years ahead of schedule,” said Harjeet Singh, Founding Director of Satat Sampada Climate Foundation. “India is showing the world how to power a growing economy with clean energy.”

At the same time, coal still supplies 74% of India’s actual electricity generation, and the government’s National Electricity Plan projects adding 80+ GW of new coal capacity through 2032. This creates a paradox. India is the world's fastest-growing renewable energy deployer, the largest fossil fuel consumer and the geopolitical centre of future energy demand simultaneously.

Contradictory capital flows

The disconnect between global investment abundance and developing-world capital access defines a second contradiction. In the first half of 2025 alone, $386 billion flowed into renewable energy globally, which is a record, according to the State of Climate Action 2025 report. But, emerging markets, excluding China, captured only 19% of this capital in 2024. India, despite leading renewable deployment, remains capital-starved.

The problem is not that capital doesn’t exist. It is that the cost of capital for utility-scale solar in emerging economies runs double or triple that in advanced nations. For instance, Indian renewable tariffs remain stubbornly high compared to Saudi Arabia’s, whose solar costs run 50% lower.

Meanwhile, a different kind of capital flows without constraint. Banks and private equity have committed over $200 billion to liquefied natural gas (LNG) expansion since 2021. This represents a deliberate choice by the global financial system. Money flows abundantly to fossil fuel expansion, but dries up for renewable infrastructure in the Global South.

India’s annual climate finance requirement stands at $68 billion, but actual annual flows total roughly $2-3 billion. Distribution companies, the backbone of India’s power system, faced $7 billion in delayed payments as of October 2025, harming their ability to finance any modernization.

Critical choice ahead

The stakes are stark, according to David Tong, Global Industry Campaign Manager at Oil Change International. “This year's World Energy Outlook makes the choices clear,” Tong said. “Uphold 1.5 C with no new fossil fuel and a just energy transition, accept a business as usual path to 2.5 C, or backslide to a nightmare future.”

For India, this distinction matters enormously. If the IEA is correct and markets eventually discipline fossil fuel investment, India might muddle through, expanding renewables while coal gradually becomes economically irrational. But, if critics are right and governments persist in fossil fuel expansion indefinitely, then India faces something far more challenging. It will be a geopolitical energy landscape shaped by resources it does not control, a financing system that demands unsustainable debt, and infrastructure that cannot absorb the renewable capacity its own ambitions create.

The reports disagree on which future will materialize. What both confirm is that India’s energy choices will decide not just its own trajectory but global energy markets for the next decade. That responsibility, and the contradictions it embodies, deserves far more careful analysis than recent energy assessments have provided.