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India Needs to Triple Solar and Wind Capacity to 494 GW by 2030 for Net Zero, Reckons BNEF Report

BloombergNEF's New Energy Outlook report for India emphasises the need for India to rapidly scale up its renewable energy capacity to achieve its decarbonisation targets and remain aligned with the Paris Agreement's climate goals.

September 06, 2024. By EI News Network

To meet the Net Zero Scenario, India must rapidly decarbonise its power sector by more than tripling its solar and wind capacity to 494 GW by 2030, according to a report by BloombergNEF.

The report reckons that the energy mix needs to transform significantly, with all unabated fossil-fuel-based power generation phased out by 2045. This transition involves a shift to low-cost renewables paired with flexible technologies such as batteries, pumped hydro, and gas peakers.

Shantanu Jaiswal, Head of BNEF in India and Southeast Asia said, “India’s window to stay on a well-below-2-degrees pathway is closing, fast. Rapidly moving to a clean power system based on wind, solar and energy storage will be essential to cost-effectively reduce carbon emissions. A low-carbon power sector will form the bedrock for emissions-reduction efforts in other areas of the economy in the years to come. Most of the heavy lifting in India’s emission-abatement trajectory must be done in the next decade as emissions from all sectors must peak within the next 10 years.”

The report introduces two scenarios: the Net Zero Scenario (NZS), which aims for a 67 percent chance of limiting global warming to 1.75 degrees Celsius, and the Economic Transition Scenario (ETS), which assumes no new policies and results in a global warming increase of 2.6 degrees Celsius.

Under the NZS, India's emissions from power, transport, and buildings must peak in this decade, followed by industrial emissions by the early 2030s, then decline rapidly using a combination of mature and emerging technologies. The ETS scenario, however, would exceed the Paris Agreement limits and demonstrate the extent of energy transition possible with existing technologies.

As per the report, India is on track to achieve its updated Nationally Determined Contribution (NDC) under the base-case economics-led pathway. However, to align with the NZS, India's energy-related emissions increase needs to be limited to 106% by 2030 relative to the 2005 baseline, well below the 175% increase under the ETS and the 192% jump implied by its NDC.

BNEF India analyst Siddharth Shetty, the lead author of the report said, “India’s 4 TW of wind and solar build from now through mid-century represents a USD 2.1 trillion investment opportunity for the industry.”

He further added, “A renewables-heavy system also poses severe grid-balancing challenges. We need flexibility in the system not just in the form of batteries and pumped hydro on the supply side but also in the form of electrolyzers and smart vehicles charging on the demand side.”

The technologies and clean fuels needed to abate the remaining two-fifths of emissions are among the most challenging to scale: biofuels for shipping and aviation; clean hydrogen as well as carbon capture and storage for use by heavy industry and power.

The report forecasts that by 2050, India’s annual hydrogen consumption jumps more than 10-fold to 64 million tons relative to 2023, and carbon capture increases to 1.4 billion metric tons per year under the Net Zero Scenario.

India’s energy sector investment and spending under the Net Zero Scenario, at USD 12.4 trillion over 2024-50, is 34 percent (or about USD 3 trillion) higher than in the Economic Transition Scenario, highlighted the report.

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BloombergNEF

BloombergNEF's New Energy Outlook report