A new analysis by the International Institute for Sustainable Development finds that nine state-owned energy companies could progressively redirect a significant share of their annual capital expenditure towards clean and reliable power. In fiscal year 2025 these firms commanded Rs 2.6 trillion (tn) in investments across fossil fuels and clean energy, positioning them to reshape long-term strategic priorities.

The report found that Rs 2.3 tn of that total was directed to fossil fuels while about Rs 0.3 tn went to clean energy in FY 2025, indicating substantial scope to rebalance spending. Progressively redirecting a portion of existing CapEx could free up close to Rs two tn a year for clean energy investment and support India’s net zero trajectory.

In FY 2025 the nine PSUs generated Rs 26 tn in revenues, nearly eight per cent of India’s GDP, and transferred Rs six tn to governments in taxes and dividends, giving them leverage to align public finances with long-term investment priorities. The analysis frames their scale and public ownership as decisive for system-wide change.

On a Scope 1 basis eight of the nine firms account for around 11 per cent of national greenhouse gas emissions, and when Scope 3 downstream combustion is included the footprint rises by 33 percentage points to nearly 44 per cent. The study emphasised the interdependence across the group, noting that coal mined by Coal India Limited is burned by National Thermal Power Corporation and that NTPC electricity supplies PSU refineries.

The report argued that PSUs have the financial strength, access to low-cost financing, and system-wide influence to scale firm renewable capacity, storage, and grid improvements. It noted NTPC’s shift towards a 60 gigawatt (GW) clean energy target as an example of state firms expanding portfolios and contracting for reliable renewables and storage.

IISD consultant Deepak Sharma said that with aligned mandates and coordinated planning PSUs can rebalance risk, reduce exposure to volatile fuel markets, and accelerate emissions reductions, turning public sector scale into a decisive lever for India’s low-carbon transition and energy security.