India’s bioenergy capacity is expected to expand significantly over the next decade, reaching 15.5 GW by FY32 from 11.58 GW in FY25, driven by stronger policy support, rising availability of agricultural residue and growth in waste-to-energy projects, according to a report by CARE Analytics and Advisory Pvt Ltd.
The report noted that bioenergy accounted for 11.6 GW of India’s renewable energy mix as of March 2025, with bagasse-based cogeneration continuing to dominate the segment, supported by biomass power and waste-to-energy (WtE) projects.
Over the past five years, the country added around 868 MW of biomass power and cogeneration capacity, along with 693 MW of WtE capacity, reflecting continued government support.
India’s total bioenergy capacity rose from 10.53 GW in FY21 to 11.58 GW in FY25, marking a compound annual growth rate of 2.24%. Biomass power and bagasse cogeneration increased from 9.37 GW to 9.82 GW during this period, while non-bagasse biomass cogeneration rose from 0.77 GW to 0.92 GW.
Waste-to-energy emerged as the fastest-growing segment, nearly doubling from 0.17 GW in FY21 to 0.31 GW in FY25, driven by policy focus on converting municipal and agricultural waste into energy and reducing landfill dependence.
India generated around 750 million tonnes of agricultural residue in FY24, including wheat straw, rice straw and sugarcane bagasse. Wheat residue accounted for nearly 25% of the total, while rice residue contributed about 24%.
Surplus biomass availability was estimated at 250 million tonnes in FY24, enough to support nearly 28 GW of energy generation. This is expected to rise to 295 million tonnes in FY25, with total biomass availability projected to increase by nearly 27% to 948 million tonnes. As a result, potential bioenergy generation could reach 35 GW.
The report highlighted that India’s large biomass surplus—estimated at over 230 million tonnes annually—offers significant potential to scale up biomass-based power, pelletisation, cogeneration and co-firing in thermal plants.
Government initiatives such as the National Bioenergy Programme, Waste-to-Energy Programme Guidelines and biomass co-firing policy are supporting project development through financial incentives, technology support and long-term offtake mechanisms.
Beyond power generation, bioenergy projects can help reduce stubble burning, cut emissions, improve soil health and provide additional income streams for farmers. They also support decentralised power supply in rural areas and generate employment across the biomass supply chain.
However, the sector continues to face challenges including seasonal availability of biomass, fragmented supply chains, high logistics costs and competition from cheaper solar and wind power.
The report emphasised the need for organised biomass supply networks, digital logistics systems, long-term procurement contracts and multi-supplier sourcing strategies to address these issues.
Investment in bioenergy projects is expected to rise steadily, with annual opportunities projected to increase from Rs 50.6 billion in FY25 to Rs 58.7 billion by FY30.
While biomass-based projects are more capital-intensive—requiring Rs 6.97–7.44 crore per MW compared to Rs 4–4.5 crore per MW for solar—they offer shorter payback periods of four to five years, compared to eight to ten years for solar and wind.
Tanvi Shah, Senior Director at CARE Analytics and Advisory Pvt Ltd, said treating agricultural residue as a valuable resource rather than waste could unlock significant economic and environmental benefits.
Nitu Singh, Associate Director at the firm, said a coordinated policy approach, supported by better biomass mapping and stronger institutional alignment, would be essential to fully realise the sector’s long-term potential.
