India's Energy Sector Faces Hard Truths in the Age Digitization As India charges toward clean energy goals and growing electricity demands, a series of hard-hitting roadblocks threatens to slow progress—and some of these challenges are baked into the system itself.
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By all accounts, AI and automation are no longer futuristic concepts in India's energy sector. From predictive maintenance to solar optimization, cutting-edge technologies are slowly being embedded into the infrastructure of one of the world's largest and most complex power ecosystems. But the road to a smarter, more sustainable grid is anything but smooth.
Akarsh Hebbar, president of Vedanta Limited, captures the tension clearly, stating, "AI and automation are rapidly transforming India's energy sector, but several challenges need to be addressed to fully realize their potential." He points first to digital infrastructure gaps, especially in remote areas where real-time monitoring tools can't function reliably. This foundational issue makes the deployment of AI-powered systems like drone surveillance or conveyor belt monitoring, both already in use at Vedanta's mining operations, a high-stakes balancing act between innovation and limitation.
The Achilles heel of AI in energy is data. Without consistent, high-quality, real-time data, AI models can't forecast energy needs accurately or carry out predictive maintenance with confidence. Jaspreet Singh, partner at Grant Thornton Bharat LLP, flags the problem: "Energy data in India is frequently incomplete, unstructured, or segregated among various agencies." That fragmentation hobbles AI's potential from the start.
Even where data exists, legacy systems often can't process or interface with it effectively. Singh suggests a pragmatic fix: gradual modernization using edge computing to bridge old and new technologies. But that requires investment, something not all players can afford. Smaller firms, in particular, struggle with the upfront costs of implementing advanced AI or IoT solutions. Without subsidies, green financing, or policy incentives, the digital divide within the sector will only widen.
There's also a people problem. "Skilled manpower such as engineers, data scientists, and data analysts are a real scarcity—not only in our company but in our nation," Hebbar admits. Limited awareness and expertise in traditional energy companies can paralyze progress. A strong industry-academia collaboration and dedicated AI-energy incubators to create a talent pipeline that aligns with the sector's fast-evolving demands.
Beyond skills, the systems themselves are not yet ready for AI at scale. There are still difficulties in integrating modern AI tools with decades-old grid infrastructure. A call for modernisation has been ringing for a long time. However, modernization can't come at the cost of ethics or equity. AI systems making decisions about who gets how much power, when, and at what cost need transparency and accountability.
Tanuj Mittal, Sr director sales, customer solution experience - Dassault Systèmes, draws attention to this dilemma of integrating renewables like solar and wind into legacy grids. "AI systems depend on clean, real-time data," he says, but outdated sensors and legacy software degrade performance. That's not just an IT issue, it's a strategic vulnerability in an age of volatile energy supply and demand. "Virtual Twin technology offers a game-changing solution by enabling real-time simulation and performance optimization of energy assets," Mittal assures.
And then there's cybersecurity. The more interconnected the grid becomes, the more exposed it is to attacks. Singh warns that rising AI and IoT adoption brings with it "the risk of cyberattacks." Without robust data privacy standards and AI-powered threat detection, the very systems designed to make the grid smarter could become its weak point.
Still, there's no turning back. The momentum is real, backed by public and private ambition alike. Government initiatives like PM-Surya Ghar Yojana and funding into solar corridors and green hydrogen show that policy is beginning to catch up with technology.
The vision for India moving forward is clear: a greener, smarter, and more resilient grid. However, foundational problems still act as the structural barriers. Unless India faces them head-on, the promise of a cleaner future still looks like a distant dream.
