India’s bioenergy installed capacity is projected to grow from around 11.6 gigawatts (GW) as of March 2025 to approximately 15.5 GW by FY32, driven by favourable policy support and the country’s vast biomass resources. However, the sector still faces several operational and structural challenges that could influence the pace of expansion, according to a report by CareEdge Ratings. Bioenergy currently forms an important part of India’s renewable energy mix, with bagasse-based cogeneration accounting for the largest share, followed by biomass power and waste-to-energy (WtE) projects.
Steady Capacity Growth in Recent Years
Over the past five years, India’s bioenergy sector has recorded steady but moderate growth. According to the report, the industry added nearly 868 MW of biomass power and cogeneration capacity, along with 693 MW of waste-to-energy capacity. As a result, the country’s total bioenergy capacity increased from 10.53 GW in FY21 to around 11.58 GW in FY25, reflecting a compound annual growth rate (CAGR) of about 2.24%.
Policy Support Driving Sector Expansion
The report highlights that several government initiatives are playing a crucial role in accelerating bioenergy development. These initiatives provide financial incentives, standardised technology frameworks, and assured offtake mechanisms, which help improve project viability and encourage investment in the sector.
Strong Biomass Availability Supports Growth
India’s abundant biomass resources continue to provide a strong foundation for long-term sector growth. The country generates nearly 750 million tons of agricultural residue annually, with surplus biomass estimated at around 250 million tons in FY24. This surplus alone could support approximately 28 GW of bioenergy generation capacity. Biomass availability is expected to increase further. Estimates suggest that total biomass production may reach 948 million tonnes, while surplus biomass could rise to around 295 million tonnes by FY25. The vast resource base positions India as one of the largest potential markets for bioenergy development.
Waste-to-Energy Emerging as a Key Segment
Among the different segments, waste-to-energy projects are gaining prominence due to their dual role in power generation and urban waste management. WtE plants help reduce landfill dependency while converting municipal waste into electricity, making them a critical component of sustainable urban infrastructure. However, these projects remain capital-intensive, with investment costs ranging between ₹6.38 crore and ₹7.44 crore per MW. Although this is higher than solar energy projects, the costs are broadly comparable to those of wind power installations.
Investment Requirements Set to Rise
As the sector moves toward its 15.5 GW capacity target by FY32, investment requirements are expected to increase steadily. The report estimates that annual funding needs may rise from ₹50.6 billion in FY25 to about ₹58.7 billion by FY30, reflecting growing demand for infrastructure, supply chains, and technology upgrades. As reported by knnindia.co.in, with the right policy support and infrastructure development, bioenergy could play a significant role in India’s clean energy transition and circular economy goals.
