$215 billion needed for India’s green energy push as coal keeps dominance, ET EnergyWorld

New Delhi: India’s renewable energy capacity has been growing at an annual rate of 10 Percent , with the country on track to meet its 2030 goal of having more than 50 Percent of installed power capacity from non-fossil fuel sources. To achieve this target, an estimated investment of $190 billion to $215 billion will be required over the next seven years, according to a Moody’s report.

Despite this rapid growth in renewables, coal remains the dominant player in India’s power generation sector. In fiscal 2023-24, coal accounted for 74.7 Percent of the total electricity generated, a rise from 71.5 Percent in 2020-21. The share of coal in India’s installed power capacity has decreased to 49.2 Percent , but coal’s dominance is expected to persist for at least another decade. Power consumption in the country is forecast to rise from 1,734 terawatt hours (TWh) in 2023-24 to 2,524 TWh by 2030-31, driven by industrial growth and an increasing population.

India, the third-largest greenhouse gas emitter in the world, saw its global emissions share rise to 7.5 Percent in 2022, up from 6.7 Percent in 2019. As the country strives to achieve its net-zero target by 2070, balancing economic growth with decarbonization efforts is proving to be a challenge. While the renewable sector is expanding, carbon-intensive industries such as oil, gas, and steel are scaling up production to meet growing demand, which is limiting reductions in emissions.
The government’s efforts to accelerate decarbonization include a planned emissions trading scheme, set to launch in 2026, that will regulate key industries such as aluminum, cement, and steel. However, financial challenges loom large. The power sector alone will need investments equal to 3.4 Percent of GDP annually through fiscal 2030-31 to meet climate goals. Given fiscal constraints, the bulk of this funding is expected to come from the private sector.India’s energy transition also faces obstacles in the transportation and manufacturing sectors, where progress toward decarbonization has been slower. The government has rolled out supportive policies, such as waivers on interstate transmission charges for renewable energy projects and incentives for domestic photovoltaic module production, helping renewable energy’s share of installed capacity reach 43 Percent in fiscal 2023-24.

Despite these efforts, coal’s role in India’s energy mix will remain crucial for the foreseeable future. The country is expected to add 40-50 GW of coal-based capacity over the next six to seven years to meet rising energy demands, further complicating the path to decarbonization. The government will need to strike a balance between expanding renewable capacity and ensuring reliable, affordable energy supply while addressing social and economic risks tied to the carbon transition.

• Published On Oct 18, 2024 at 07:56 AM IST

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