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India is at risk of missing its ambitious clean energy targets if it doesn’t significantly boost investment in renewable energy, which is only a fifth of what is required annually through 2030, clean energy think tank Ember said in a report.
India’s investments in renewable power generation and transmission were estimated at $13.3 billion for the fiscal year 2024.
While this figure is a massive 40% jump from the previous fiscal year, it is still far behind the $68 billion annual investment required to achieve India’s goal of having 500 gigawatts (GW) of renewable energy capacity installed by 2030 and more than 600 GW by 2032.
India will need a total capital flow of $300 billion by 2032 to remain on track to meet its renewable capacity commitments, Ember said.
Significant challenges remain in India’s push for a fast rollout of renewable energy. These include project commissioning delays, driven by land acquisition challenges, grid connectivity issues, and regulatory hurdles, according to Ember’s report.
Delays could raise the cost of capital by 4%, which, in turn, could lead to India falling short of its 2030 renewable energy target by as much as 100 GW, the think tank reckons.
India will also need massive investments in the power sector to support the country’s goal to reach net zero by 2070.
Moody’s, for example, says that India will need $700 billion in investment over the next 10 years alone to get on track for net zero by 2070.
India’s power sector continues to rely on coal, and a massive effort is needed to attract investments in renewables and convince investors that the higher-risk capital invested in India would reap higher rewards.
In India, coal use is rising – demand increased in 2024 by more than 5% to hit 1.3 billion tons—a level that only China has reached previously, per IEA data.
India has recently reduced coal imports, but that’s only because it aims to hike domestic output to source more coal at home. With industry expected to expand and power demand to soar, India is set to use more of its lower-quality domestic coal to meet its consumption needs.
