Clean energy needs Rs 31 trillion investments by 2030 – EQ
In Short : India’s clean energy sector requires Rs 31 trillion in investments by 2030 to achieve its sustainability targets. This substantial funding is essential for expanding renewable energy infrastructure, enhancing energy efficiency, and meeting the nation’s climate goals.
In Detail : The clean energy sector in India saw new investment of Rs 8.5 trillion between 2014 and 2023, as per the survey.
The government expects the country’s energy needs to grow 2-2.5 times by 2047 to meet a growing economy’s developmental priorities and aspirations, according to the economic survey. To govern the same, the renewable energy sector is expected to attract investments of about Rs 30.5 trillion between 2024 and 2030.
The clean energy sector in India saw new investment of Rs 8.5 trillion between 2014 and 2023, as per the survey. In addition to this, the sector attracted foreign direct investment of approximately $17.88 billion from April 2000 till March 2024, the survey pointed out.
“Considering that resources are limited, the pace of energy transition would need to factor in alternative demands on the resources for improving resilience to climate change and for sustained social and economic development,” the survey said.
India’s primary energy mix in 2022-23 was fossil-fuel dominant, with almost 84% met from coal, oil, and natural gas combined. However, the composition in the electricity sector has significantly changed due to the phasing in of renewables, with the share of non-fossil power capacity being 45.4% as of May 2024 from around 32% in April 2014.
The government highlighted that the country has taken many measures to improve the business environment and catalyse greater quantum of resources. “The government undertook the issue of sovereign green bonds amounting to Rs 16,000 crore in January-February 2023 to raise proceeds for public sector projects that would contribute in reducing the intensity of the country’s emissions, followed by Rs 20,000 crore raised through sovereign green bonds in October-December 2023,” it said.
As the efforts to increase the share of renewable energy and investments in the same continue, large-scale phasing-in of renewables poses several risks associated with intermittency and dispatchability in the energy system. “Renewable energy faces intermittency and discontinuous supply, impacting grid stability in the absence of battery storage,” the government noted in the economic survey.
The survey also discusses various challenges the country needs to deal with in order to scale its renewable energy capacity. A concomitant rise in renewable capacity may lead to a decline in base load efficiency as the supply composition changes.
“India’s ambitious green hydrogen production target is subject to various constraints, including on the supply side – the cost of production and delivery, and, on the demand side – readiness to consume green hydrogen in traditional industrial processes.”
Even as the government aims at ramping up RE capacity, it projects coal to continue as the backbone of the Indian energy system until the next two decades. This will also include a significant role for thermal power, especially coal-based power plants, in providing base-load to support large-scale deployment of renewables.
“Coal phase-down will be heavily dependent on the import of critical minerals required for renewable energy and battery storage unless the country invests in the development of technologies based on domestically available mineral resources and those that enable the reuse, recovery, and recycling of critical minerals.”
The survey underscored the importance of supplementing renewable energy with other non-fossil fuel sources such as nuclear, biofuels, and hydrogen. “India must avoid shifting its high dependency on petroleum imports to a high dependency on solar PV panels and critical minerals, whose supply chains and geopolitics may be even trickier,” it said.
