India needs to invest $223bn to meet 2030 climate goals: Study

REPORT FOUND THAT CORPORATE COMMITMENTS FROM INDIAN POWER COMPANIES COULD HELP THE COUNTRY ACHIEVE 86% OF ITS GOALS

NEW DELHI: India will require $223 billion investment to meet its goal of wind and solar capacity installations by 2030, according to a report released by research company BloombergNEF (BNEF) on Wednesday.

Prime Minister Narendra Modi at the Glasgow climate summit on November 1 last year had set a target of taking India’s non-fossil energy capacity to 500GW by 2030, meeting 50% of the country’s energy requirements by then.

“India is one of the largest renewable energy markets in the world and its rising power demand coupled with government’s support for clean power makes it the most attractive investment destination for renewables among emerging markets. The country now needs to scale up its financing activities by tapping into alternative sources of financing and by learning from international experiences to raise $223 billion in the next eight years,” the report titled ‘ Financing India’s 2030 Renewables Ambition’ published in association with the Power Foundation of India said.

India has already invested around $75 billion in renewable energy in the past eight years, between 2014 and 2021, to install 165GW of renewable energy which now needs to treble to $223 billion to meet India’s 500GW goal by 2030, the report added.

The report also found that corporate commitments from Indian power companies could help the country achieve 86% of its 2030 goals. By 2021, India had also already installed 165GW of renewable energy, it noted.

The Central Electricity Authority (CEA) has forecast that India’s reliance on coal will decrease from 53% of installed capacity in 2021 to 33% in 2030, whereas solar and wind together will make up 51% by then, up from 23% in 2021.

“To date, the growth of renewable energy in India has been funded by a diverse set of financiers. Debt and equity structures have evolved as the market grew and new risks emerged. India’s ambitious renewable energy targets now require further scaling up of financing with new instruments and learnings from other global markets,” Shantanu Jaiswal, lead author of the report and head of India research at BloombergNEF, said.

However, scaling up of renewables in India faces regulatory, project and financing risks, with power purchase agreement, land acquisition and payment delays cited as key risks by industry stakeholders to BloombergNEF. Rising interest rates and inflation, coupled with depreciation of the rupee against US dollar are creating new challenges for the sector, the report said.