India’s bioenergy installed capacity is projected to rise to 15.5 GW by FY32 from about 11.6 GW as of March 2025, driven by sustained policy support and abundant biomass availability, even as supply chain bottlenecks and cost pressures remain key concerns, according to a CareEdge report.
Bioenergy currently contributes 11.6 GW to India’s renewable energy mix, with bagasse cogeneration forming the dominant share, supported by biomass and waste-to-energy (WtE) segments. Over the last five years, the sector has added around 868 MW of biomass power/cogeneration capacity and 693 MW of WtE capacity, indicating steady expansion backed by government initiatives.
The report highlighted that the sector’s growth is being accelerated by multiple national programmes including the National Bioenergy Programme, Waste-to-Energy Programme Guidelines, Biomass Co-firing Policy and biofuel blending targets, which are providing “targeted financial support, technology standards and stable offtake mechanisms” to improve project viability.
Strong biomass base
India’s strong biomass base continues to underpin long-term growth. The country generates nearly 750 million tonne of agricultural residue annually, with surplus biomass availability estimated at around 250 million tonne in FY24 — enough to support energy generation of nearly 28 GW. This is expected to increase further, with total biomass availability projected to rise to 948 million tonne and surplus biomass to 295 million tonne in FY25.
Despite this strong resource base, the report flagged structural challenges that could constrain growth. “Major challenges remain in biomass supply chains, seasonality, logistics, storage constraints and high aggregation costs, along with the difficulty of matching falling tariffs of solar and wind,” it noted.
Moderate growth
The installed capacity trend shows steady but moderate growth. Bioenergy capacity increased from 10.53 GW in FY21 to 11.58 GW in FY25, reflecting a compound annual growth rate (CAGR) of 2.24%. Within this, biomass power and bagasse cogeneration rose from 9.37 GW to 9.82 GW, while non-bagasse biomass increased from 0.77 GW to 0.92 GW. Waste-to-energy capacity nearly doubled from 0.17 GW to 0.31 GW, indicating a stronger policy push towards urban waste utilisation.
The report noted that WtE is emerging as a critical segment, supported by the need to reduce landfill dependence and improve waste management. However, it also remains capital intensive, with project costs ranging between ₹6.38 crore and ₹7.44 crore per MW for biomass-based projects, higher than solar but comparable to wind.
Investment requirements are also expected to rise steadily, with annual funding needs projected to increase from ₹50.6 billion in FY25 to ₹58.7 billion by FY30, reflecting growing capacity addition targets.
The report underscored the broader economic and environmental impact of scaling bioenergy. It highlighted benefits such as reduction in stubble burning, improved waste management, decentralised power generation and additional income opportunities for farmers.
“Reframing agricultural residue from ‘waste’ to a strategic national bioenergy resource can unlock significant socio-economic and environmental gains,” said Tanvi Shah, senior director at CareEdge Analytics and Advisory.
At the same time, the report stressed the need for systemic policy alignment. “Realising Waste to Energy potential requires a coordinated and systems-based policy approach… a data-driven biomass mapping framework and strong institutional alignment will be critical,” said Nitu Singh, Associate Director at CareEdge.