India risks falling short of its ambitious clean energy targets unless it significantly increases investment in renewable energy, according to a report from the clean energy think tank Ember.
For the fiscal year 2024, India’s investment in renewable energy generation and transmission is estimated at $13.3 billion. While this represents a 40% increase from the previous year, it is still far from the $68 billion needed annually to meet the country’s goal of 500 gigawatts (GW) of renewable energy capacity by 2030, and more than 600 GW by 2032.
To stay on track for these goals, Ember estimates that India will need a total investment of $300 billion in the renewable energy sector by 2032.
However, significant hurdles remain in India’s efforts to rapidly scale up renewable energy. These include delays in project commissioning due to challenges with land acquisition, grid connectivity, and regulatory issues. Ember warns that such delays could increase capital costs by 4%, potentially resulting in a shortfall of up to 100 GW in renewable capacity by 2030.
India will also need substantial investment in its power sector to achieve its target of reaching net zero emissions by 2070. According to Moody’s, India will require $700 billion in investments over the next decade to be on track for this goal.
Currently, India’s power sector remains heavily reliant on coal. While coal imports have been reduced recently, this is mainly due to an increase in domestic production. As India’s industrial sector expands and power demand grows, the country is expected to rely more on its lower-quality domestic coal to meet its energy needs. In 2024, coal demand rose by over 5%, reaching 1.3 billion tons, a level previously only seen in China, according to the International Energy Agency (IEA).
To meet its renewable energy goals and transition to a greener future, India will need to attract more investment in clean energy and demonstrate to investors that the higher-risk capital invested will yield substantial returns.
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