India needs $500 billion investment to meet 450GW of renewable target: IEEFA

India’s renewable energy sector will require an investment of at least $500 billion over the next ten years to fulfill its 450GW targets by 2030, as said by The Institute for Energy Economics and Financial Analysis’s (IEEFA) report.

Since 2014, the renewable energy sector has only received an investment of more than $42 billion. But factors including; low solar energy tariffs, dropping solar panel prices, record low-interest rates, and the government-backed long-term power purchase agreements (PPAs) – have created a favorable sentiment among global investors for the Indian market.

“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,” says report co-author Tim Buckley, Director Energy Finance Studies, South Asia, IEEFA.

“India has a once-in-a-generation opportunity to transform its energy system, and the benefits of doing so are huge,” he further added.

Soon to be the third-largest electricity consumer by the end of this decade, however with per capita energy consumption equal to one-third of the world, as per the recent IEA report – India can tap renewable energy potential to fuel its future growth prospects, and reduce its dependency on traditional fossil fuels.

“India could dramatically improve its energy security by reducing reliance on expensive fossil fuel imports. The ongoing solar energy deflation – now around Rs.2/kWh, below the marginal fuel cost of coal-fired power plants – gives India the economic incentive to accelerate its energy transition and be a world leader in helping to solve the climate crisis, plus address chronic air pollution and water stress.

The report also mentions that many dominant power producers such as ReNew Power, Greenko, Adani Green, Tata Power, etc. are facing stiff competition from the likes of Vena Energy/Vector Green, O2 Power, Ayana Renewable Power, Torrent Power, and Spring Energy, that clearly defines the scope for further investments in the market.