At present, $293 billion needed in investments between 2023 and 2030 to meet NEP14 solar and wind capacity targets
Photo: iStock India will need additional investment of $101 billion to align with International Energy Agency’s (IEA) Net Zero target of tripling renewable energy capacity, compared to the 14th National Electricity Plan (NEP14) pathway, according to a report by energy think tank Ember.
The country requires an investment of $293 billion between 2023 and 2030 to meet the NEP14 solar and wind capacity targets, including storage and transmission. The financing will be essential to put India on track to more than triple its renewable capacity by 2030s, the report estimated.
The renewable-based installed capacity for 2031-32 is 596,275 megawatts (MW), according to National Electricity Plan (NEP) projections. This includes large hydro (62,178 MW), solar (364,566 MW), wind (121,895 MW), small hydro (5,450 MW), biomass (15,500 MW), pump storage plants (26,686 MW) and battery energy storage systems capacity of 47,244 MW/236,220 MWh.
“The share of non-fossil-based capacity is likely to increase to 57.4 per cent by the end of 2026-27 and may likely further increase to 68.4 per cent by the end of 2031-32 from around 42.5 per cent as of April 2023,” said the NEP.
“If we interpolate the projections set out in India’s NEP14, the country’s solar and wind share in total electricity generation in FY 2030-31 would be 24 per cent and 9 per cent, respectively,” Ember researchers wrote in the report. To meet this target, India needs to increase annual additions to 41 gigawatts (GW) of solar and 11.8 GW of wind by 2027.
However, if India were to adopt the IEA targets, then it would have to upgrade its current plan to achieve around 32 per cent of generation from solar and 12 per cent from wind by 2030. This would necessitate annual solar and wind additions of 64 GW and 13.6 GW, respectively, by 2027, according to the report.
The report estimated, “that to achieve these generation levels from solar and wind, India will need to build an additional capacity of 115 GW of solar and 9 GW of wind by 2030 on top of the solar and wind targets set out in its NEP14 plan. It will take India’s total renewable capacity to 448 GW of solar and 122 GW of wind by 2030.”
India has committed to adding 500 GW of installed electricity capacity from non-fossil fuel sources by 2030 and achieving Net Zero by 2070.
The establishment of a grid that integrates renewables would help meet these targets, making interstate transmission system (ISTS) essential. The NEP14 targets for FY 2030-31 outline a target of 227 GW of ISTS and 37 GW of intra-state transmission systems to integrate renewable energy. Additionally, plans include 18 GW of pumped storage and 42 GW (five hours) of battery storage.
To meet the IEA Net Zero target, India will have to further increase storage and transmission capacity, requiring an additional 48 GW of ISTS and at least an additional 14 GW (six hours) of battery storage, the report added.
The report comes before the 28th Conference of Parties (COP28) to the United Nations Framework Convention on Climate Change begins in Dubai, United Arab Emirates on November 30, 2023. At a pre-COP event in Dubai, the COP28 presidency said tripling renewable energy capacity for power generation by 2030 is necessary. While it is not clear what the target means for individual countries, it may be within reach for India based on the NEP14 and IEA targets.
With India securing a G20 commitment in September 2023 to “pursue and encourage efforts to triple renewable energy capacity globally through existing targets and policies,” there is an increasing anticipation to secure a global commitment at COP 28, the researchers said.
Despite investment risks, India needs financing to build capacity in renewables, storage and transmission to even meet the NEP14 targets, Neshwin Rodrigues, Ember’s India electricity policy analyst, said in a press statement.
“To further step up ambitions to match a global net-zero pathway, securing significantly more financing at competitive rates will be vital to ensuring the viability of India to reach the goal. Access to this finance is critical for India to avoid building new coal capacity to meet its growing demand in this decade,” he said.
While on the rise, investment in renewable energy projects is prone to risks. Some of these challenges include payment delays, renegotiation of Power Purchase Agreements and complexities related to land acquisition, Ember said. “Effectively addressing these risk factors and actively attracting investment, particularly from foreign sources despite these risks, is pivotal for ensuring the successful implementation of renewable energy projects,” the report added.
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