Published on 04th July 2019
The latest Economic Survey of India 2018-19 indicates that an additional investment in renewable plants for up to the year 2022 (without transmission lines) would be about USD 80 billion at today’s prices and USD 250 billion would be required for the period 2023-2030. Thus, on an annualized basis, investment opportunity for over USD 30 billion per year is expected to come up for the next decade and beyond. India comes at fourth and fifth respectively in installed wind and solar capacity as per the survey.
The survey states that India’s various energy conservation and efficiency programs showed phenomenal performance reducing energy consumption and lowering carbon emissions. However, investors will continue to face downsides in the renewable sector in India due to the country’s continued legacy problems including but not limited to financing, speed of approvals, land procurement.
While optimistic about India making a large footprint in renewables, the government is cautious in terms of pursuing a more open energy mix. Since the current energy storage solutions are inadequate to meet the exorbitant demands characteristic of a rapidly growing Indian economy, the government sees the future in renewables as conditioned by the level of progress on the technology front.
The survey reports that currently the energy landscape is transforming as declining cost and improved efficiency of renewables have upped its prospects. But India’s overwhelming dependence on conventional energy sources such as coal is hard to beat until the economics of renewables including transmission and storage comes out really strong. Whereas coal is a stable source of energy, renewables such as wind and solar in which India staked out a position globally is not. And that can impact the pace or the intensity of investment in renewables to replace conventional and stable energy sources in a country that will be seeing a growing demand for energy for decades to come.