India is set to see investments to the tune of around $500 billion in the renewables sector if the country has to achieve the target of 450 gigawatts of capacity by 2030, said a report by the Institute for Energy Economics and Financial Analysis (IEEFA).
The report highlighted that a huge global capital pool is mobilizing to invest in renewable energy and grid projects in India, with pull factors including solar power tariffs hitting record lows, plunging solar module costs, record low-interest rates, and the security of government-backed, 25-year power purchase agreements (PPAs). The renewable energy sector in India has received more than $42 billion in investment since 2014.
“We estimate that striving for 450 gigawatts of renewable energy by 2030 would require deploying $500 billion of investment over the coming decade $300 billion for wind and solar infrastructure, $50 billion on grid firming investments such as gas-peakers, hydro and batteries, and $150 billion on expanding and modernizing transmission and distribution,” said Tim Buckley, Director Energy Finance Studies, South Asia, at the IEEFA.
The country’s untapped renewable potential at 900 gigawatts is the most in the world. It is estimated that India’s peak power demand will rise to 295GW by 2021-22 and 690GW by 2035.
“Domestic and global institutions across the financial, corporate, energy, utility, and government sectors are primed to deploy a wall of capital that India needs to fund its ambitious renewable energy targets,” he added.