India’s energy demand is expected to increase more than that of any other country in the coming decade. India ranks 4th in the world in terms of installed renewable energy capacity, and India’s non-fossil fuel energy has grown by over 25% in the previous 7 years.
Australia is one of the largest exporters of coal, natural gas, and uranium in the world. The country has a diversified energy mix, with coal, natural gas, and renewables making up the bulk of its energy production.
SOLID DEMAND:
- The Central Electricity Authority estimates India’s power requirement to grow to reach 817 GW by 2030. Most of the demand will come from real estate and transport sectors.
- In June 2021, Prime Minister Mr. Narendra Modi stated that renewable energy capacity in India increased by 250% between 2014 and 2021.
DRIVING ADVANTAGE:
- Globally, India ranks fourth in renewable energy capacity and wind power and fifth in solar power capacity.
- India retained its third rank on the EY Renewable Energy Country Attractive Index October 2021.
GOVERNMENT POLICIES:
- In the Union Budget 2022-23, the government allocated Rs. 19,500 crores (US$ 2.57 billion) for a PLI scheme to boost the manufacturing of high-efficiency solar modules.
- India launched the Mission Innovation CleanTech Exchange, a global initiative that will help accelerate clean energy innovation.
RISE IN INVESTMENTS:
- Rising foreign investment in the renewable sector (such as the US$ 75 billion investment from the UAE) is expected to promote further investments in the country.
- Non-conventional energy sector received an FDI inflow of US$ 12.57 billion between April 2000- June 2022.
INTRODUCTION
India is the market with the fastest growth in renewable electricity, and by 2026, new capacity additions are expected to double. The Indian renewable energy sector is the fourth most attractive renewable energy market in the world. India was ranked fourth in wind power, fifth in solar power and fourth in renewable power installed capacity, as of 2020. Installed renewable power generation capacity has gained pace over the past few years, posting a CAGR of 15.92% between FY16-22. India’s energy demand is expected to increase more than that of any other country in the coming decades due to its sheer size and enormous potential for growth and development. Therefore, it is imperative that most of this new energy demand is met by low-carbon, renewable sources. India’s announcement India that it intends to achieve net zero carbon emissions by 2070 and to meet 50% of its electricity needs from renewable sources by 2030 marks a historic point in the global effort to combat climate change. With the increased support of the Government and improved economics, the sector has become attractive from an investors perspective. As India looks to meet its energy demand on its own, which is expected to reach 15,820 TWh by 2040, renewable energy is set to play an important role.
MARKET DIMENSIONS
The country is targeting about 450 Gigawatt (GW) of installed renewable energy capacity by 2030 – about 280 GW (over 60%) is expected from solar. The non-hydro renewable energy capacity addition stood at 4.2 GW for the first three months of FY23 against 2.6 GW for the first three months of FY22. Solar power installed capacity has increased by more than 18 times, from 2.63 GW in March 2014 to 49.3 GW at the end of 2021. In 2022, till November, India has added 12 GW of solar power capacity. India’s installed renewable energy capacity (including hydro) stood at 165.94 GW, representing 40.6% of the overall installed power capacity as of October 2022. Power generation from renewable energy sources, excluding hydro, stood at 16.18 billion units (BU) in September 2022, up from 14.49 BU in September 2021.With a potential capacity of 363 GW and with policies focused on the renewable energy sector, Northern India is expected to become the hub for renewable energy in India.
INVESTMENTS AND GROWTH
Some major investments and developments in the Indian renewable energy sector are as follows:
India generated 47.64 BU of solar power in the first half of 2022, a 34% YoY increase.
In August 2022, Norfund, who manage the Norwegian Climate Investment Fund, and KLP, Norway’s biggest pension company, signed an agreement to buy a 49% share of a 420 MW solar power plant in Rajasthan for Rs. 2.8 billion (US$ 35.05 million).
Delhi’s Indira Gandhi International Airport (IGIA) has become the first Indian airport to run entirely on hydro and solar power. Around 6% of the airport’s electricity requirement is met from
the onsite solar power plants. •
In February 2022, Creduce Technologies-HCPL JV announced winning the bid for India’s single largest hydro power carbon credits project with Satluj Jal Vidyut Nigam, which will create more than 80 million carbon credits.
Husk Power Systems, a renewable energy company working towards rural electrification, secured a US$ 4.2 million loan from the Indian Renewable Energy Development Agency (IREDA) in February 2022.
The NTPC is expected to commission India’s largest floating solar power plant in Ramagundam, Telangana by May-June 2022. The expected total installed capacity is 447MW.
GOVERNMENT POLICIES
Some initiatives by Government of India to boost India’s renewable energy sector are as follows:
In the Union Budget 2022-23, the allocation for the Solar Energy Corporation of India (SECI), which is currently responsible for the development of the entire renewable energy sector, stood at Rs. 1,000 crores (US$ 132 million).
In February 2022, Nepal and India agreed to form a Joint Hydro Development Committee to explore the possibility of viable hydropower project.
In the Budget, the government allocated Rs. 19,500 crore (US$ 2.57 billion) for a PLI scheme to boost manufacturing of high-efficiency solar modules.
In November 2021, at the Cop-26 Summit in Glasgow, Prime Minister Mr. Narendra Modi made a promise to increase India’s renewable energy generation capacity to 500 GW, and meet 50% of India’s energy needs through renewable means by the year 2030.
The Government of India has announced plans to implement a US$ 238 million National Mission on advanced ultra-supercritical technologies for cleaner coal utilisation.
On November 9 2022, Minister for Finance & Corporate Affairs, Ms. Nirmala Sitharaman, approved the final Sovereign Green Bonds framework of India. The Paris Agreement’s Nationally Determined Contribution (NDC) targets will be further strengthened by this approval, which will also aid in attracting foreign and domestic capital to green projects.
Indian Railways is taking increased efforts through sustained energy efficient measures and maximum use of clean fuel to cut down emission level by 33% by 2030.
THE FUTURE AHEAD
The rising population and widespread electrification in rural homes is fuelling the demand for energy to power homes, businesses and communities. Clean energy will reduce pollution levels as villages become self-sustainable with their use of clean energy. In 2022, India’s renewable energy sector is expected to boom with a likely investment of US$ 15 billion this year, as the government focuses on electric vehicles, green hydrogen, and manufacturing of solar equipment. India’s ambitious renewables energy goals are transforming its power sector.
It is expected that by 2040, around 49% of the total electricity will be generated by renewable energy as more efficient batteries will be used to store electricity, which will further cut the solar energy cost by 66% as compared to the current cost. Use of renewables in place of coal will save India Rs. 54,000 crore (US$ 8.43 billion) annually. Around 15,000 MW of wind-solar hybrid capacity is expected to be added between 2020-25.
According to the Central Electricity Authority (CEA) estimates, by 2029-30, the share of renewable energy generation would increase from 18% to 44%, while that of thermal is expected to reduce from 78% to 52%. The CEA also estimates India’s power requirement to grow to reach 817 GW by 2030.
The Australian government has set a target to achieve net-zero emissions by 2050, which will require a significant shift in the country’s energy sector. The government has announced a $18 billion investment plan to support low-emissions technologies, including renewable energy, hydrogen, and carbon capture and storage. The growth of renewable energy in Australia has been driven by declining costs and increasing demand from consumers and businesses. Australia should help India achieve its energy needs by providing reliable, powerful goods and services and joining India’s inner circle of dependable energy partners.