INVESTMENT IN INDIA’S RENEWABLE ENERGY SECTOR

TAG: GS 3: ECOLOGY AND ENVIRONMENT

THE CONTEXT: According to a report by energy think tank Ember, 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.

EXPLANATION:

• India requires substantial investment to meet its renewable energy (RE) targets set by the National Electricity Plan (NEP14) and align with the International Energy Agency’s (IEA) Net Zero objectives.
• A report by energy think tank Ember highlights the investment gap and necessary actions to achieve these goals.

Investment Requirements:

• According to the Ember report, India needs an additional investment of $101 billion to fulfill the IEA’s target of tripling renewable energy capacity compared to NEP14.
• The country necessitates a total investment of $293 billion between 2023 and 2030 to meet NEP14 solar and wind capacity objectives, including storage and transmission infrastructure.

NEP14 Renewable Capacity Targets:

• NEP projections outline renewable-based installed capacity for 2031-32, estimating 596,275 MW, encompassing various sources like solar, wind, hydro, biomass, and storage systems.
• The plan indicates a rising share of non-fossil-based capacity, projected to reach 68.4% by 2031-32 from 42.5% in April 2023.

Comparing NEP14 and IEA Targets:

• The report compares NEP14 projections with IEA targets, suggesting that to meet the latter, India must significantly increase annual solar and wind additions by 2027.
• While NEP14 aims for 24% generation from solar and 9% from wind by 2030, IEA’s goals entail 32% from solar and 12% from wind by 2030, requiring higher annual additions.

Additional Capacity Requirement:

• To achieve these targets, India needs an additional 115 GW of solar and 9 GW of wind capacity by 2030, surpassing NEP14 plans.
• Meeting IEA Net Zero targets necessitates even higher capacities, totaling 448 GW of solar and 122 GW of wind by 2030.

Transmission and Storage Requirements:

• The establishment of robust transmission systems is crucial to integrate renewables.
• NEP14 targets include interstate and intra-state transmission systems and storage capacities.
• To align with IEA Net Zero targets, India needs to enhance storage and transmission, requiring an additional 48 GW of ISTS and 14 GW of battery storage.

Pre-COP28 Context and Global Commitments:

• With the COP28 approaching, there’s an increasing push for tripling renewable energy capacity globally.
• India’s G20 commitment in 2023 aligns with these objectives, reflecting growing anticipation for a global commitment at COP28.

Challenges and Financing Needs:

• Despite rising investment in renewables, challenges persist, including payment delays, renegotiation of agreements, and land acquisition complexities.
• The report emphasizes the necessity for financing to meet NEP14 targets and urges even more substantial financial support to align with global net-zero pathways.

The 14th National Electricity Plan (NEP14):

• The 14th National Electricity Plan (NEP14) is a significant initiative in India’s energy sector, aiming to increase the country’s renewable energy capacity.
• According to the plan, India sets out solar capacity targets of 185.6 GW by fiscal 2026-27, reaching 364.6 GW by fiscal 2031-32.
• To achieve these targets, India needs to increase its current annual solar capacity addition by about 36% each year leading up to 2026-27.
• The plan also estimates India’s total annual electricity generation to grow by 1,174 TWh in fiscal 2022-32, reaching a total of 2,666 TWh in fiscal 2032.

Conclusion:

• India faces significant investment requirements to achieve ambitious renewable energy targets set by NEP14 and to align with global Net Zero goals.
• Addressing challenges and attracting substantial financing remains pivotal for successful implementation, ensuring a shift away from coal towards sustainable energy sources.

SOURCE: https://www.downtoearth.org.in/news/renewable-energy/india-needs-a-surplus-of-101-billion-in-investment-to-triple-re-targets-finds-report-93065