essay on india becoming a leader in renewable energy

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• Published: 07 January 2020

Renewable energy for sustainable development in India: current status, future prospects, challenges, employment, and investment opportunities

• Charles Rajesh Kumar. J   ORCID: orcid.org/0000-0003-2354-6463 1 &
• M. A. Majid 1  

Energy, Sustainability and Society volume  10 , Article number:  2 ( 2020 ) Cite this article

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The primary objective for deploying renewable energy in India is to advance economic development, improve energy security, improve access to energy, and mitigate climate change. Sustainable development is possible by use of sustainable energy and by ensuring access to affordable, reliable, sustainable, and modern energy for citizens. Strong government support and the increasingly opportune economic situation have pushed India to be one of the top leaders in the world’s most attractive renewable energy markets. The government has designed policies, programs, and a liberal environment to attract foreign investments to ramp up the country in the renewable energy market at a rapid rate. It is anticipated that the renewable energy sector can create a large number of domestic jobs over the following years. This paper aims to present significant achievements, prospects, projections, generation of electricity, as well as challenges and investment and employment opportunities due to the development of renewable energy in India. In this review, we have identified the various obstacles faced by the renewable sector. The recommendations based on the review outcomes will provide useful information for policymakers, innovators, project developers, investors, industries, associated stakeholders and departments, researchers, and scientists.

Introduction

The sources of electricity production such as coal, oil, and natural gas have contributed to one-third of global greenhouse gas emissions. It is essential to raise the standard of living by providing cleaner and more reliable electricity [ 1 ]. India has an increasing energy demand to fulfill the economic development plans that are being implemented. The provision of increasing quanta of energy is a vital pre-requisite for the economic growth of a country [ 2 ]. The National Electricity Plan [NEP] [ 3 ] framed by the Ministry of Power (MoP) has developed a 10-year detailed action plan with the objective to provide electricity across the country, and has prepared a further plan to ensure that power is supplied to the citizens efficiently and at a reasonable cost. According to the World Resource Institute Report 2017 [ 4 , 5 ], India is responsible for nearly 6.65% of total global carbon emissions, ranked fourth next to China (26.83%), the USA (14.36%), and the EU (9.66%). Climate change might also change the ecological balance in the world. Intended Nationally Determined Contributions (INDCs) have been submitted to the United Nations Framework Convention on Climate Change (UNFCCC) and the Paris Agreement. The latter has hoped to achieve the goal of limiting the rise in global temperature to well below 2 °C [ 6 , 7 ]. According to a World Energy Council [ 8 ] prediction, global electricity demand will peak in 2030. India is one of the largest coal consumers in the world and imports costly fossil fuel [ 8 ]. Close to 74% of the energy demand is supplied by coal and oil. According to a report from the Center for monitoring Indian economy, the country imported 171 million tons of coal in 2013–2014, 215 million tons in 2014–2015, 207 million tons in 2015–2016, 195 million tons in 2016–2017, and 213 million tons in 2017–2018 [ 9 ]. Therefore, there is an urgent need to find alternate sources for generating electricity.

In this way, the country will have a rapid and global transition to renewable energy technologies to achieve sustainable growth and avoid catastrophic climate change. Renewable energy sources play a vital role in securing sustainable energy with lower emissions [ 10 ]. It is already accepted that renewable energy technologies might significantly cover the electricity demand and reduce emissions. In recent years, the country has developed a sustainable path for its energy supply. Awareness of saving energy has been promoted among citizens to increase the use of solar, wind, biomass, waste, and hydropower energies. It is evident that clean energy is less harmful and often cheaper. India is aiming to attain 175 GW of renewable energy which would consist of 100 GW from solar energy, 10 GW from bio-power, 60 GW from wind power, and 5 GW from small hydropower plants by the year 2022 [ 11 ]. Investors have promised to achieve more than 270 GW, which is significantly above the ambitious targets. The promises are as follows: 58 GW by foreign companies, 191 GW by private companies, 18 GW by private sectors, and 5 GW by the Indian Railways [ 12 ]. Recent estimates show that in 2047, solar potential will be more than 750 GW and wind potential will be 410 GW [ 13 , 14 ]. To reach the ambitious targets of generating 175 GW of renewable energy by 2022, it is essential that the government creates 330,000 new jobs and livelihood opportunities [ 15 , 16 ].

A mixture of push policies and pull mechanisms, accompanied by particular strategies should promote the development of renewable energy technologies. Advancement in technology, proper regulatory policies [ 17 ], tax deduction, and attempts in efficiency enhancement due to research and development (R&D) [ 18 ] are some of the pathways to conservation of energy and environment that should guarantee that renewable resource bases are used in a cost-effective and quick manner. Hence, strategies to promote investment opportunities in the renewable energy sector along with jobs for the unskilled workers, technicians, and contractors are discussed. This article also manifests technological and financial initiatives [ 19 ], policy and regulatory framework, as well as training and educational initiatives [ 20 , 21 ] launched by the government for the growth and development of renewable energy sources. The development of renewable technology has encountered explicit obstacles, and thus, there is a need to discuss these barriers. Additionally, it is also vital to discover possible solutions to overcome these barriers, and hence, proper recommendations have been suggested for the steady growth of renewable power [ 22 , 23 , 24 ]. Given the enormous potential of renewables in the country, coherent policy measures and an investor-friendly administration might be the key drivers for India to become a global leader in clean and green energy.

Projection of global primary energy consumption

An energy source is a necessary element of socio-economic development. The increasing economic growth of developing nations in the last decades has caused an accelerated increase in energy consumption. This trend is anticipated to grow [ 25 ]. A prediction of future power consumption is essential for the investigation of adequate environmental and economic policies [ 26 ]. Likewise, an outlook to future power consumption helps to determine future investments in renewable energy. Energy supply and security have not only increased the essential issues for the development of human society but also for their global political and economic patterns [ 27 ]. Hence, international comparisons are helpful to identify past, present, and future power consumption.

Table 1 shows the primary energy consumption of the world, based on the BP Energy Outlook 2018 reports. In 2016, India’s overall energy consumption was 724 million tons of oil equivalent (Mtoe) and is expected to rise to 1921 Mtoe by 2040 with an average growth rate of 4.2% per annum. Energy consumption of various major countries comprises commercially traded fuels and modern renewables used to produce power. In 2016, India was the fourth largest energy consumer in the world after China, the USA, and the Organization for economic co-operation and development (OECD) in Europe [ 29 ].

The projected estimation of global energy consumption demonstrates that energy consumption in India is continuously increasing and retains its position even in 2035/2040 [ 28 ]. The increase in India’s energy consumption will push the country’s share of global energy demand to 11% by 2040 from 5% in 2016. Emerging economies such as China, India, or Brazil have experienced a process of rapid industrialization, have increased their share in the global economy, and are exporting enormous volumes of manufactured products to developed countries. This shift of economic activities among nations has also had consequences concerning the country’s energy use [ 30 ].

Projected primary energy consumption in India

The size and growth of a country’s population significantly affects the demand for energy. With 1.368 billion citizens, India is ranked second, of the most populous countries as of January 2019 [ 31 ]. The yearly growth rate is 1.18% and represents almost 17.74% of the world’s population. The country is expected to have more than 1.383 billion, 1.512 billion, 1.605 billion, 1.658 billion people by the end of 2020, 2030, 2040, and 2050, respectively. Each year, India adds a higher number of people to the world than any other nation and the specific population of some of the states in India is equal to the population of many countries.

The growth of India’s energy consumption will be the fastest among all significant economies by 2040, with coal meeting most of this demand followed by renewable energy. Renewables became the second most significant source of domestic power production, overtaking gas and then oil, by 2020. The demand for renewables in India will have a tremendous growth of 256 Mtoe in 2040 from 17 Mtoe in 2016, with an annual increase of 12%, as shown in Table 2 .

Table 3 shows the primary energy consumption of renewables for the BRIC countries (Brazil, Russia, India, and China) from 2016 to 2040. India consumed around 17 Mtoe of renewable energy in 2016, and this will be 256 Mtoe in 2040. It is probable that India’s energy consumption will grow fastest among all major economies by 2040, with coal contributing most in meeting this demand followed by renewables. The percentage share of renewable consumption in 2016 was 2% and is predicted to increase by 13% by 2040.

How renewable energy sources contribute to the energy demand in India

Even though India has achieved a fast and remarkable economic growth, energy is still scarce. Strong economic growth in India is escalating the demand for energy, and more energy sources are required to cover this demand. At the same time, due to the increasing population and environmental deterioration, the country faces the challenge of sustainable development. The gap between demand and supply of power is expected to rise in the future [ 32 ]. Table 4 presents the power supply status of the country from 2009–2010 to 2018–2019 (until October 2018). In 2018, the energy demand was 1,212,134 GWh, and the availability was 1,203,567 GWh, i.e., a deficit of − 0.7% [ 33 ].

According to the Load generation and Balance Report (2016–2017) of the Central Electricity Authority of India (CEA), the electrical energy demand for 2021–2022 is anticipated to be at least 1915 terawatt hours (TWh), with a peak electric demand of 298 GW [ 34 ]. Increasing urbanization and rising income levels are responsible for an increased demand for electrical appliances, i.e., an increased demand for electricity in the residential sector. The increased demand in materials for buildings, transportation, capital goods, and infrastructure is driving the industrial demand for electricity. An increased mechanization and the shift to groundwater irrigation across the country is pushing the pumping and tractor demand in the agriculture sector, and hence the large diesel and electricity demand. The penetration of electric vehicles and the fuel switch to electric and induction cook stoves will drive the electricity demand in the other sectors shown in Table 5 .

According to the International Renewable Energy Agency (IRENA), a quarter of India’s energy demand can be met with renewable energy. The country could potentially increase its share of renewable power generation to over one-third by 2030 [ 35 ].

Table 6 presents the estimated contribution of renewable energy sources to the total energy demand. MoP along with CEA in its draft national electricity plan for 2016 anticipated that with 175 GW of installed capacity of renewable power by 2022, the expected electricity generation would be 327 billion units (BUs), which would contribute to 1611 BU energy requirements. This indicates that 20.3% of the energy requirements would be fulfilled by renewable energy by 2022 and 24.2% by 2027 [ 36 ]. Figure 1 shows the ambitious new target for the share of renewable energy in India’s electricity consumption set by MoP. As per the order of revised RPO (Renewable Purchase Obligations, legal act of June 2018), the country has a target of a 21% share of renewable energy in its total electricity consumption by March 2022. In 2014, the same goal was at 15% and increased to 21% by 2018. It is India’s goal to reach 40% renewable sources by 2030.

Target share of renewable energy in India’s power consumption

Estimated renewable energy potential in India

The estimated potential of wind power in the country during 1995 [ 37 ] was found to be 20,000 MW (20 GW), solar energy was 5 × 10 15 kWh/pa, bioenergy was 17,000 MW, bagasse cogeneration was 8000 MW, and small hydropower was 10,000 MW. For 2006, the renewable potential was estimated as 85,000 MW with wind 4500 MW, solar 35 MW, biomass/bioenergy 25,000 MW, and small hydropower of 15,000 MW [ 38 ]. According to the annual report of the Ministry of New and Renewable Energy (MNRE) for 2017–2018, the estimated potential of wind power was 302.251 GW (at 100-m mast height), of small hydropower 19.749 GW, biomass power 17.536 GW, bagasse cogeneration 5 GW, waste to energy (WTE) 2.554 GW, and solar 748.990 GW. The estimated total renewable potential amounted to 1096.080 GW [ 39 ] assuming 3% wasteland, which is shown in Table 7 . India is a tropical country and receives significant radiation, and hence the solar potential is very high [ 40 , 41 , 42 ].

Gross installed capacity of renewable energy in India

As of June 2018 reports, the country intends to reach 225 GW of renewable power capacity by 2022 exceeding the target of 175 GW pledged during the Paris Agreement. The sector is the fourth most attractive renewable energy market in the world. As in October 2018, India ranked fifth in installed renewable energy capacity [ 43 ].

Gross installed capacity of renewable energy—according to region

Table 8 lists the cumulative installed capacity of both conventional and renewable energy sources. The cumulative installed capacity of renewable sources as on the 31 st of December 2018 was 74081.66 MW. Renewable energy (small hydropower, wind, biomass, WTE, solar) accounted for an approximate 21% share of the cumulative installed power capacity, and the remaining 78.791% originated from other conventional sources (coal, gas diesel, nuclear, and large hydropower) [ 44 ]. The best regions for renewable energy are the southern states that have the highest solar irradiance and wind in the country. When renewable energy alone is considered for analysis, the Southern region covers 49.121% of the cumulative installed renewable capacity, followed by the Western region (29.742%), the Northern region (18.890%), the Eastern region (1.836%), the North-Easter region 0.394%, and the Islands (0.017%). As far as conventional energy is concerned, the Western region with 33.452% ranks first and is followed by the Northern region with 28.484%, the Southern region (24.967%), the Eastern region (11.716%), the Northern-Eastern (1.366%), and the Islands (0.015%).

Gross installed capacity of renewable energy—according to ownership

State government, central government, and private players drive the Indian energy sector. The private sector leads the way in renewable energy investment. Table 9 shows the installed gross renewable energy and conventional energy capacity (percentage)—ownership wise. It is evident from Fig. 2 that 95% of the installed renewable capacity derives from private companies, 2% from the central government, and 3% from the state government. The top private companies in the field of non-conventional energy generation are Tata Power Solar, Suzlon, and ReNew Power. Tata Power Solar System Limited are the most significant integrated solar power players in the country, Suzlon realizes wind energy projects, and ReNew Power Ventures operate with solar and wind power.

Gross renewable energy installed capacity (percentage)—Ownership wise as per the 31.12.2018 [ 43 ]

Gross installed capacity of renewable energy—state wise

Table 10 shows the installed capacity of cumulative renewable energy (state wise), out of the total installed capacity of 74,081.66 MW, where Karnataka ranks first with 12,953.24 MW (17.485%), Tamilnadu second with 11,934.38 MW (16%), Maharashtra third with 9283.78 MW (12.532%), Gujarat fourth with 10.641 MW (10.641%), and Rajasthan fifth with 7573.86 MW (10.224%). These five states cover almost 66.991% of the installed capacity of total renewable. Other prominent states are Andhra Pradesh (9.829%), Madhya Pradesh (5.819%), Telangana (5.137%), and Uttar Pradesh (3.879%). These nine states cover almost 91.655%.

Gross installed capacity of renewable energy—according to source

Under union budget of India 2018–2019, INR 3762 crore (USD 581.09 million), was allotted for grid-interactive renewable power schemes and projects. As per the 31.12.2018, the installed capacity of total renewable power (excluding large hydropower) in the country amounted to 74.08166 GW. Around 9.363 GW of solar energy, 1.766 GW of wind, 0.105 GW of small hydropower (SHP), and biomass power of 8.7 GW capacity were added in 2017–2018. Table 11 shows the installed capacity of renewable energy over the last 10 years until the 31.12.2018. Wind energy continues to dominate the countries renewable energy industry, accounting for over 47% of cumulative installed renewable capacity (35,138.15 MW), followed by solar power of 34% (25,212.26 MW), biomass power/cogeneration of 12% (9075.5 MW), and small hydropower of 6% (4517.45 MW). In the renewable energy country attractiveness index (RECAI) of 2018, India ranked in fourth position. The installed renewable energy production capacity has grown at an accelerated pace over the preceding few years, posting a CAGR of 19.78% between 2014 and 2018 [ 45 ] .

Estimation of the installed capacity of renewable energy

Table 12 gives the share of installed cumulative renewable energy capacity, in comparison with the installed conventional energy capacity. In 2022 and 2032, the installed renewable energy capacity will account for 32% and 35%, respectively [ 46 , 47 ]. The most significant renewable capacity expansion program in the world is being taken up by India. The government is preparing to boost the percentage of clean energy through a tremendous push in renewables, as discussed in the subsequent sections.

Gross electricity generation from renewable energy in India

The overall generation (including the generation from grid-connected renewable sources) in the country has grown exponentially. Between 2014–2015 and 2015–2016, it achieved 1110.458 BU and 1173.603 BU, respectively. The same was recorded with 1241.689 BU and 1306.614 BU during 2015–2016 and 1306.614 BU from 2016–2017 and 2017–2018, respectively. Figure 3 indicates that the annual renewable power production increased faster than the conventional power production. The rise accounted for 6.47% in 2015–2016 and 24.88% in 2017–2018, respectively. Table 13 compares the energy generation from traditional sources with that from renewable sources. Remarkably, the energy generation from conventional sources reached 811.143 BU and from renewable sources 9.860 BU in 2010 compared to 1.206.306 BU and 88.945 BU in 2017, respectively [ 48 ]. It is observed that the price of electricity production using renewable technologies is higher than that for conventional generation technologies, but is likely to fall with increasing experience in the techniques involved [ 49 ].

The annual growth in power generation as per the 30th of November 2018

Gross electricity generation from renewable energy—according to regions

Table 14 shows the gross electricity generation from renewable energy-region wise. It is noted that the highest renewable energy generation derives from the southern region, followed by the western part. As of November 2018, 50.33% of energy generation was obtained from the southern area and 29.37%, 18.05%, 2%, and 0.24% from Western, Northern, North-Eastern Areas, and the Island, respectively.

Gross electricity generation from renewable energy—according to states

Table 15 shows the gross electricity generation from renewable energy—region-wise. It is observed that the highest renewable energy generation was achieved from Karnataka (16.57%), Tamilnadu (15.82%), Andhra Pradesh (11.92%), and Gujarat (10.87%) as per November 2018. While adding four years from 2015–2016 to 2018–2019 Tamilnadu [ 50 ] remains in the first position followed by Karnataka, Maharashtra, Gujarat and Andhra Pradesh.

Gross electricity generation from renewable energy—according to sources

Table 16 shows the gross electricity generation from renewable energy—source-wise. It can be concluded from the table that the wind-based energy generation as per 2017–2018 is most prominent with 51.71%, followed by solar energy (25.40%), Bagasse (11.63%), small hydropower (7.55%), biomass (3.34%), and WTE (0.35%). There has been a constant increase in the generation of all renewable sources from 2014–2015 to date. Wind energy, as always, was the highest contributor to the total renewable power production. The percentage of solar energy produced in the overall renewable power production comes next to wind and is typically reduced during the monsoon months. The definite improvement in wind energy production can be associated with a “good” monsoon. Cyclonic action during these months also facilitates high-speed winds. Monsoon winds play a significant part in the uptick in wind power production, especially in the southern states of the country.

Estimation of gross electricity generation from renewable energy

Table 17 shows an estimation of gross electricity generation from renewable energy based on the 2015 report of the National Institution for Transforming India (NITI Aayog) [ 51 ]. It is predicted that the share of renewable power will be 10.2% by 2022, but renewable power technologies contributed a record of 13.4% to the cumulative power production in India as of the 31st of August 2018. The power ministry report shows that India generated 122.10 TWh and out of the total electricity produced, renewables generated 16.30 TWh as on the 31st of August 2018. According to the India Brand Equity Foundation report, it is anticipated that by the year 2040, around 49% of total electricity will be produced using renewable energy.

Current achievements in renewable energy 2017–2018

India cares for the planet and has taken a groundbreaking journey in renewable energy through the last 4 years [ 52 , 53 ]. A dedicated ministry along with financial and technical institutions have helped India in the promotion of renewable energy and diversification of its energy mix. The country is engaged in expanding the use of clean energy sources and has already undertaken several large-scale sustainable energy projects to ensure a massive growth of green energy.

1. India doubled its renewable power capacity in the last 4 years. The cumulative renewable power capacity in 2013–2014 reached 35,500 MW and rose to 70,000 MW in 2017–2018.

2. India stands in the fourth and sixth position regarding the cumulative installed capacity in the wind and solar sector, respectively. Furthermore, its cumulative installed renewable capacity stands in fifth position globally as of the 31st of December 2018.

3. As said above, the cumulative renewable energy capacity target for 2022 is given as 175 GW. For 2017–2018, the cumulative installed capacity amounted to 70 GW, the capacity under implementation is 15 GW and the tendered capacity was 25 GW. The target, the installed capacity, the capacity under implementation, and the tendered capacity are shown in Fig. 4 .

4. There is tremendous growth in solar power. The cumulative installed solar capacity increased by more than eight times in the last 4 years from 2.630 GW (2013–2014) to 22 GW (2017–2018). As of the 31st of December 2018, the installed capacity amounted to 25.2122 GW.

5. The renewable electricity generated in 2017–2018 was 101839 BUs.

6. The country published competitive bidding guidelines for the production of renewable power. It also discovered the lowest tariff and transparent bidding method and resulted in a notable decrease in per unit cost of renewable energy.

7. In 21 states, there are 41 solar parks with a cumulative capacity of more than 26,144 MW that have already been approved by the MNRE. The Kurnool solar park was set up with 1000 MW; and with 2000 MW the largest solar park of Pavagada (Karnataka) is currently under installation.

8. The target for solar power (ground mounted) for 2018–2019 is given as 10 GW, and solar power (Rooftop) as 1 GW.

9. MNRE doubled the target for solar parks (projects of 500 MW or more) from 20 to 40 GW.

10. The cumulative installed capacity of wind power increased by 1.6 times in the last 4 years. In 2013–2014, it amounted to 21 GW, from 2017 to 2018 it amounted to 34 GW, and as of 31st of December 2018, it reached 35.138 GW. This shows that achievements were completed in wind power use.

11. An offshore wind policy was announced. Thirty-four companies (most significant global and domestic wind power players) competed in the “expression of interest” (EoI) floated on the plan to set up India’s first mega offshore wind farm with a capacity of 1 GW.

12. 682 MW small hydropower projects were installed during the last 4 years along with 600 watermills (mechanical applications) and 132 projects still under development.

13. MNRE is implementing green energy corridors to expand the transmission system. 9400 km of green energy corridors are completed or under implementation. The cost spent on it was INR 10141 crore (101,410 Million INR = 1425.01 USD). Furthermore, the total capacity of 19,000 MVA substations is now planned to be complete by March 2020.

14. MNRE is setting up solar pumps (off-grid application), where 90% of pumps have been set up as of today and between 2014–2015 and 2017–2018. Solar street lights were more than doubled. Solar home lighting systems have been improved by around 1.5 times. More than 2,575,000 solar lamps have been distributed to students. The details are illustrated in Fig. 5 .

15. From 2014–2015 to 2017–2018, more than 2.5 lakh (0.25 million) biogas plants were set up for cooking in rural homes to enable families by providing them access to clean fuel.

16. New policy initiatives revised the tariff policy mandating purchase and generation obligations (RPO and RGO). Four wind and solar inter-state transmission were waived; charges were planned, the RPO trajectory for 2022 and renewable energy policy was finalized.

17. Expressions of interest (EoI) were invited for installing solar photovoltaic manufacturing capacities associated with the guaranteed off-take of 20 GW. EoI indicated 10 GW floating solar energy plants.

18. Policy for the solar-wind hybrid was announced. Tender for setting up 2 GW solar-wind hybrid systems in existing projects was invited.

19. To facilitate R&D in renewable power technology, a National lab policy on testing, standardization, and certification was announced by the MNRE.

20. The Surya Mitra program was conducted to train college graduates in the installation, commissioning, operations, and management of solar panels. The International Solar Alliance (ISA) headquarters in India (Gurgaon) will be a new commencement for solar energy improvement in India.

21. The renewable sector has become considerably more attractive for foreign and domestic investors, and the country expects to attract up to USD 80 billion in the next 4 years from 2018–2019 to 2021–2022.

22. The solar power capacity expanded by more than eight times from 2.63 GW in 2013–2014 to 22 GW in 2017–2018.

23. A bidding for 115 GW renewable energy projects up to March 2020 was announced.

24. The Bureau of Indian Standards (BIS) acting for system/components of solar PV was established.

25. To recognize and encourage innovative ideas in renewable energy sectors, the Government provides prizes and awards. Creative ideas/concepts should lead to prototype development. The Name of the award is “Abhinav Soch-Nayi Sambhawanaye,” which means Innovative ideas—New possibilities.

Renewable energy target, installed capacity, under implementation and tendered [ 52 ]

Off-grid solar applications [ 52 ]

Solar energy

Under the National Solar Mission, the MNRE has updated the objective of grid-connected solar power projects from 20 GW by the year 2021–2022 to 100 GW by the year 2021–2022. In 2008–2009, it reached just 6 MW. The “Made in India” initiative to promote domestic manufacturing supported this great height in solar installation capacity. Currently, India has the fifth highest solar installed capacity worldwide. By the 31st of December 2018, solar energy had achieved 25,212.26 MW against the target of 2022, and a further 22.8 GW of capacity has been tendered out or is under current implementation. MNRE is preparing to bid out the remaining solar energy capacity every year for the periods 2018–2019 and 2019–2020 so that bidding may contribute with 100 GW capacity additions by March 2020. In this way, 2 years for the completion of projects would remain. Tariffs will be determined through the competitive bidding process (reverse e-auction) to bring down tariffs significantly. The lowest solar tariff was identified to be INR 2.44 per kWh in July 2018. In 2010, solar tariffs amounted to INR 18 per kWh. Over 100,000 lakh (10,000 million) acres of land had been classified for several planned solar parks, out of which over 75,000 acres had been obtained. As of November 2018, 47 solar parks of a total capacity of 26,694 MW were established. The aggregate capacity of 4195 MW of solar projects has been commissioned inside various solar parks (floating solar power). Table 18 shows the capacity addition compared to the target. It indicates that capacity addition increased exponentially.

Wind energy

As of the 31st of December 2018, the total installed capacity of India amounted to 35,138.15 MW compared to a target of 60 GW by 2022. India is currently in fourth position in the world for installed capacity of wind power. Moreover, around 9.4 GW capacity has been tendered out or is under current implementation. The MNRE is preparing to bid out for A 10 GW wind energy capacity every year for 2018–2019 and 2019–2020, so that bidding will allow for 60 GW capacity additions by March 2020, giving the remaining two years for the accomplishment of the projects. The gross wind energy potential of the country now reaches 302 GW at a 100 m above-ground level. The tariff administration has been changed from feed-in-tariff (FiT) to the bidding method for capacity addition. On the 8th of December 2017, the ministry published guidelines for a tariff-based competitive bidding rule for the acquisition of energy from grid-connected wind energy projects. The developed transparent process of bidding lowered the tariff for wind power to its lowest level ever. The development of the wind industry has risen in a robust ecosystem ensuring project execution abilities and a manufacturing base. State-of-the-art technologies are now available for the production of wind turbines. All the major global players in wind power have their presence in India. More than 12 different companies manufacture more than 24 various models of wind turbines in India. India exports wind turbines and components to the USA, Europe, Australia, Brazil, and other Asian countries. Around 70–80% of the domestic production has been accomplished with strong domestic manufacturing companies. Table 19 lists the capacity addition compared to the target for the capacity addition. Furthermore, electricity generation from the wind-based capacity has improved, even though there was a slowdown of new capacity in the first half of 2018–2019 and 2017–2018.

The national energy storage mission—2018

The country is working toward a National Energy Storage Mission. A draft of the National Energy Storage Mission was proposed in February 2018 and initiated to develop a comprehensive policy and regulatory framework. During the last 4 years, projects included in R&D worth INR 115.8 million (USD 1.66 million) in the domain of energy storage have been launched, and a corpus of INR 48.2 million (USD 0.7 million) has been issued. India’s energy storage mission will provide an opportunity for globally competitive battery manufacturing. By increasing the battery manufacturing expertise and scaling up its national production capacity, the country can make a substantial economic contribution in this crucial sector. The mission aims to identify the cumulative battery requirements, total market size, imports, and domestic manufacturing. Table 20 presents the economic opportunity from battery manufacturing given by the National Institution for Transforming India, also called NITI Aayog, which provides relevant technical advice to central and state governments while designing strategic and long-term policies and programs for the Indian government.

Small hydropower—3-year action agenda—2017

Hydro projects are classified as large hydro, small hydro (2 to 25 MW), micro-hydro (up to 100 kW), and mini-hydropower (100 kW to 2 MW) projects. Whereas the estimated potential of SHP is 20 GW, the 2022 target for India in SHP is 5 GW. As of the 31st of December 2018, the country has achieved 4.5 GW and this production is constantly increasing. The objective, which was planned to be accomplished through infrastructure project grants and tariff support, was included in the NITI Aayog’s 3-year action agenda (2017–2018 to 2019–2020), which was published on the 1st of August 2017. MNRE is providing central financial assistance (CFA) to set up small/micro hydro projects both in the public and private sector. For the identification of new potential locations, surveys and comprehensive project reports are elaborated, and financial support for the renovation and modernization of old projects is provided. The Ministry has established a dedicated completely automatic supervisory control and data acquisition (SCADA)—based on a hydraulic turbine R&D laboratory at the Alternate Hydro Energy Center (AHEC) at IIT Roorkee. The establishment cost for the lab was INR 40 crore (400 million INR, 95.62 Million USD), and the laboratory will serve as a design and validation facility. It investigates hydro turbines and other hydro-mechanical devices adhering to national and international standards [ 54 , 55 ]. Table 21 shows the target and achievements from 2007–2008 to 2018–2019.

National policy regarding biofuels—2018

Modernization has generated an opportunity for a stable change in the use of bioenergy in India. MNRE amended the current policy for biomass in May 2018. The policy presents CFA for projects using biomass such as agriculture-based industrial residues, wood produced through energy plantations, bagasse, crop residues, wood waste generated from industrial operations, and weeds. Under the policy, CFA will be provided to the projects at the rate of INR 2.5 million (USD 35,477.7) per MW for bagasse cogeneration and INR 5 million (USD 70,955.5) per MW for non-bagasse cogeneration. The MNRE also announced a memorandum in November 2018 considering the continuation of the concessional customs duty certificate (CCDC) to set up projects for the production of energy using non-conventional materials such as bio-waste, agricultural, forestry, poultry litter, agro-industrial, industrial, municipal, and urban wastes. The government recently established the National policy on biofuels in August 2018. The MNRE invited an expression of interest (EOI) to estimate the potential of biomass energy and bagasse cogeneration in the country. A program to encourage the promotion of biomass-based cogeneration in sugar mills and other industries was also launched in May 2018. Table 22 shows how the biomass power target and achievements are expected to reach 10 GW of the target of 2022 before the end of 2019.

The new national biogas and organic manure program (NNBOMP)—2018

The National biogas and manure management programme (NBMMP) was launched in 2012–2013. The primary objective was to provide clean gaseous fuel for cooking, where the remaining slurry was organic bio-manure which is rich in nitrogen, phosphorus, and potassium. Further, 47.5 lakh (4.75 million) cumulative biogas plants were completed in 2014, and increased to 49.8 lakh (4.98 million). During 2017–2018, the target was to establish 1.10 lakh biogas plants (1.10 million), but resulted in 0.15 lakh (0.015 million). In this way, the cost of refilling the gas cylinders with liquefied petroleum gas (LPG) was greatly reduced. Likewise, tons of wood/trees were protected from being axed, as wood is traditionally used as a fuel in rural and semi-urban households. Biogas is a viable alternative to traditional cooking fuels. The scheme generated employment for almost 300 skilled laborers for setting up the biogas plants. By 30th of May 2018, the Ministry had issued guidelines for the implementation of the NNBOMP during the period 2017–2018 to 2019–2020 [ 56 ].

The off-grid and decentralized solar photovoltaic application program—2018

The program deals with the energy demand through the deployment of solar lanterns, solar streetlights, solar home lights, and solar pumps. The plan intended to reach 118 MWp of off-grid PV capacity by 2020. The sanctioning target proposed outlay was 50 MWp by 2017–2018 and 68 MWp by 2019–2020. The total estimated cost amounted to INR 1895 crore (18950 Million INR, 265.547 million USD), and the ministry wanted to support 637 crores (6370 million INR, 89.263 million USD) by its central finance assistance. Solar power plants with a 25 KWp size were promoted in those areas where grid power does not reach households or is not reliable. Public service institutions, schools, panchayats, hostels, as well as police stations will benefit from this scheme. Solar study lamps were also included as a component in the program. Thirty percent of financial assistance was provided to solar power plants. Every student should bear 15% of the lamp cost, and the ministry wanted to support the remaining 85%. As of October 2018, lantern and lamps of more than 40 Lakhs (4 million), home lights of 16.72 lakhs (1.672 million) number, street lights of 6.40 lakhs (0.64 million), solar pumps of 1.96 lakhs (0.196 million), and 187.99 MWp stand-alone devices had been installed [ 57 , 58 ].

Major government initiatives for renewable energy

Technological initiatives.

The Technology Development and Innovation Policy (TDIP) released on the 6th of October 2017 was endeavored to promote research, development, and demonstration (RD&D) in the renewable energy sector [ 59 ]. RD&D intended to evaluate resources, progress in technology, commercialization, and the presentation of renewable energy technologies across the country. It aimed to produce renewable power devices and systems domestically. The evaluation of standards and resources, processes, materials, components, products, services, and sub-systems was carried out through RD&D. A development of the market, efficiency improvements, cost reductions, and a promotion of commercialization (scalability and bankability) were achieved through RD&D. Likewise, the percentage of renewable energy in the total electricity mix made it self-sustainable, industrially competitive, and profitable through RD&D. RD&D also supported technology development and demonstration in wind, solar, wind-solar hybrid, biofuel, biogas, hydrogen fuel cells, and geothermal energies. RD&D supported the R&D units of educational institutions, industries, and non-government organizations (NGOs). Sharing expertise, information, as well as institutional mechanisms for collaboration was realized by use of the technology development program (TDP). The various people involved in this program were policymakers, industrial innovators, associated stakeholders and departments, researchers, and scientists. Renowned R&D centers in India are the National Institute of Solar Energy (NISE), Gurgaon, the National Institute of Bio-Energy (NIBE), Kapurthala, and the National Institute of Wind Energy (NIWE), Chennai. The TDP strategy encouraged the exploration of innovative approaches and possibilities to obtain long-term targets. Likewise, it efficiently supported the transformation of knowledge into technology through a well-established monitoring system for the development of renewable technology that meets the electricity needs of India. The research center of excellence approved the TDI projects, which were funded to strengthen R&D. Funds were provided for conducting training and workshops. The MNRE is now preparing a database of R&D accomplishments in the renewable energy sector.

The Impacting Research Innovation and Technology (IMPRINT) program seeks to develop engineering and technology (prototype/process development) on a national scale. IMPRINT is steered by the Indian Institute of Technologies (IITs) and Indian Institute of science (IISCs). The expansion covers all areas of engineering and technology including renewable technology. The ministry of human resource development (MHRD) finances up to 50% of the total cost of the project. The remaining costs of the project are financed by the ministry (MNRE) via the RD&D program for renewable projects. Currently (2018–2019), five projects are under implementation in the area of solar thermal systems, storage for SPV, biofuel, and hydrogen and fuel cells which are funded by the MNRE (36.9 million INR, 0.518426 Million USD) and IMPRINT. Development of domestic technology and quality control are promoted through lab policies that were published on the 7th of December 2017. Lab policies were implemented to test, standardize, and certify renewable energy products and projects. They supported the improvement of the reliability and quality of the projects. Furthermore, Indian test labs are strengthened in line with international standards and practices through well-established lab policies. From 2015, the MNRE has provided “The New and Renewable Energy Young Scientist’s Award” to researchers/scientists who demonstrate exceptional accomplishments in renewable R&D.

Financial initiatives

One hundred percent financial assistance is granted by the MNRE to the government and NGOs and 50% financial support to the industry. The policy framework was developed to guide the identification of the project, the formulation, monitoring appraisal, approval, and financing. Between 2012 and 2017, a 4467.8 million INR, 62.52 Million USD) support was granted by the MNRE. The MNRE wanted to double the budget for technology development efforts in renewable energy for the current three-year plan period. Table 23 shows that the government is spending more and more for the development of the renewable energy sector. Financial support was provided to R&D projects. Exceptional consideration was given to projects that worked under extreme and hazardous conditions. Furthermore, financial support was applied to organizing awareness programs, demonstrations, training, workshops, surveys, assessment studies, etc. Innovative approaches will be rewarded with cash prizes. The winners will be presented with a support mechanism for transforming their ideas and prototypes into marketable commodities such as start-ups for entrepreneur development. Innovative projects will be financed via start-up support mechanisms, which will include an investment contract with investors. The MNRE provides funds to proposals for investigating policies and performance analyses related to renewable energy.

Technology validation and demonstration projects and other innovative projects with regard to renewables received a financial assistance of 50% of the project cost. The CFA applied to partnerships with industry and private institutions including engineering colleges. Private academic institutions, accredited by a government accreditation body, were also eligible to receive a 50% support. The concerned industries and institutions should meet the remaining 50% expenditure. The MNRE allocated an INR 3762.50 crore (INR 37625 million, 528.634 million USD) for the grid interactive renewable sources and an INR 1036.50 crore (INR 10365 million, 145.629 million USD) for off-grid/distributed and decentralized renewable power for the year 2018–2019 [ 60 ]. The MNRE asked the Reserve Bank of India (RBI), attempting to build renewable power projects under “priority sector lending” (priority lending should be done for renewable energy projects and without any limit) and to eliminate the obstacles in the financing of renewable energy projects. In July 2018, the Ministry of Finance announced that it would impose a 25% safeguard duty on solar panels and modules imported from China and Malaysia for 1 year. The quantum of tax might be reduced to 20% for the next 6 months, and 15% for the following 6 months.

Policy and regulatory framework initiatives

The regulatory interventions for the development of renewable energy sources are (a) tariff determination, (b) defining RPO, (c) promoting grid connectivity, and (d) promoting the expansion of the market.

Tariff policy amendments—2018

On the 30th of May 2018, the MoP released draft amendments to the tariff policy. The objective of these policies was to promote electricity generation from renewables. MoP in consultation with MNRE announced the long-term trajectory for RPO, which is represented in Table 24 . The State Electricity Regulatory Commission (SERC) achieved a favorable and neutral/off-putting effect in the growth of the renewable power sector through their RPO regulations in consultation with the MNRE. On the 25th of May 2018, the MNRE created an RPO compliance cell to reach India’s solar and wind power goals. Due to the absence of implementation of RPO regulations, several states in India did not meet their specified RPO objectives. The cell will operate along with the Central Electricity Regulatory Commission (CERC) and SERCs to obtain monthly statements on RPO compliance. It will also take up non-compliance associated concerns with the relevant officials.

Repowering policy—2016

On the 09th of August 2016, India announced a “repowering policy” for wind energy projects. An about 27 GW turnaround was possible according to the policy. This policy supports the replacing of aging wind turbines with more modern and powerful units (fewer, larger, taller) to raise the level of electricity generation. This policy seeks to create a simplified framework and to promote an optimized use of wind power resources. It is mandatory because the up to the year 2000 installed wind turbines were below 500 kW in sites where high wind potential might be achieved. It will be possible to obtain 3000 MW from the same location once replacements are in place. The policy was initially applied for the one MW installed capacity of wind turbines, and the MNRE will extend the repowering policy to other projects in the future based on experience. Repowering projects were implemented by the respective state nodal agencies/organizations that were involved in wind energy promotion in their states. The policy provided an exception from the Power Purchase Agreement (PPA) for wind farms/turbines undergoing repowering because they could not fulfill the requirements according to the PPA during repowering. The repowering projects may avail accelerated depreciation (AD) benefit or generation-based incentive (GBI) due to the conditions appropriate to new wind energy projects [ 61 ].

The wind-solar hybrid policy—2018

On the 14th of May 2018, the MNRE announced a national wind-solar hybrid policy. This policy supported new projects (large grid-connected wind-solar photovoltaic hybrid systems) and the hybridization of the already available projects. These projects tried to achieve an optimal and efficient use of transmission infrastructure and land. Better grid stability was achieved and the variability in renewable power generation was reduced. The best part of the policy intervention was that which supported the hybridization of existing plants. The tariff-based transparent bidding process was included in the policy. Regulatory authorities should formulate the necessary standards and regulations for hybrid systems. The policy also highlighted a battery storage in hybrid projects for output optimization and variability reduction [ 62 ].

The national offshore wind energy policy—2015

The National Offshore Wind Policy was released in October 2015. On the 19th of June 2018, the MNRE announced a medium-term target of 5 GW by 2022 and a long-term target of 30 GW by 2030. The MNRE called expressions of Interest (EoI) for the first 1 GW of offshore wind (the last date was 08.06.2018). The EoI site is located in Pipavav port at the Gulf of Khambhat at a distance of 23 km facilitating offshore wind (FOWIND) where the consortium deployed light detection and ranging (LiDAR) in November 2017). Pipavav port is situated off the coast of Gujarat. The MNRE had planned to install more such equipment in the states of Tamil Nadu and Gujarat. On the 14 th of December 2018, the MNRE, through the National Institute of Wind Energy (NIWE), called tender for offshore environmental impact assessment studies at intended LIDAR points at the Gulf of Mannar, off the coast of Tamil Nadu for offshore wind measurement. The timeline for initiatives was to firstly add 500 MW by 2022, 2 to 2.5 GW by 2027, and eventually reaching 5 GW between 2028 and 2032. Even though the installation of large wind power turbines in open seas is a challenging task, the government has endeavored to promote this offshore sector. Offshore wind energy would add its contribution to the already existing renewable energy mix for India [ 63 ] .

The feed-in tariff policy—2018

On the 28th of January 2016, the revised tariff policy was notified following the Electricity Act. On the 30th May 2018, the amendment in tariff policy was released. The intentions of this tariff policy are (a) an inexpensive and competitive electricity rate for the consumers; (b) to attract investment and financial viability; (c) to ensure that the perceptions of regulatory risks decrease through predictability, consistency, and transparency of policy measures; (d) development in quality of supply, increased operational efficiency, and improved competition; (e) increase the production of electricity from wind, solar, biomass, and small hydro; (f) peaking reserves that are acceptable in quantity or consistently good in quality or performance of grid operation where variable renewable energy source integration is provided through the promotion of hydroelectric power generation, including pumped storage projects (PSP); (g) to achieve better consumer services through efficient and reliable electricity infrastructure; (h) to supply sufficient and uninterrupted electricity to every level of consumers; and (i) to create adequate capacity, reserves in the production, transmission, and distribution that is sufficient for the reliability of supply of power to customers [ 64 ].

Training and educational initiatives

The MHRD has developed strong renewable energy education and training systems. The National Council for Vocational Training (NCVT) develops course modules, and a Modular Employable Skilling program (MES) in its regular 2-year syllabus to include SPV lighting systems, solar thermal systems, SHP, and provides the certificate for seven trades after the completion of a 2-year course. The seven trades are plumber, fitter, carpenter, welder, machinist, and electrician. The Ministry of Skill Development and Entrepreneurship (MSDE) worked out a national skill development policy in 2015. They provide regular training programs to create various job roles in renewable energy along with the MNRE support through a skill council for green jobs (SCGJ), the National Occupational Standards (NOS), and the Qualification Pack (QP). The SCGJ is promoted by the Confederation of Indian Industry (CII) and the MNRE. The industry partner for the SCGJ is ReNew Power [ 65 , 66 ].

The global status of India in renewable energy

Table 25 shows the RECAI (Renewable Energy Country Attractiveness Index) report of 40 countries. This report is based on the attractiveness of renewable energy investment and deployment opportunities. RECAI is based on macro vitals such as economic stability, investment climate, energy imperatives such as security and supply, clean energy gap, and affordability. It also includes policy enablement such as political stability and support for renewables. Its emphasis lies on project delivery parameters such as energy market access, infrastructure, and distributed generation, finance, cost and availability, and transaction liquidity. Technology potentials such as natural resources, power take-off attractiveness, potential support, technology maturity, and forecast growth are taken into consideration for ranking. India has moved to the fourth position of the RECAI-2018. Indian solar installations (new large-scale and rooftop solar capacities) in the calendar year 2017 increased exponentially with the addition of 9629 MW, whereas in 2016 it was 4313 MW. The warning of solar import tariffs and conflicts between developers and distribution firms are growing investor concerns [ 67 ]. Figure 6 shows the details of the installed capacity of global renewable energy in 2016 and 2017. Globally, 2017 GW renewable energy was installed in 2016, and in 2017, it increased to 2195 GW. Table 26 shows the total capacity addition of top countries until 2017. The country ranked fifth in renewable power capacity (including hydro energy), renewable power capacity (not including hydro energy) in fourth position, concentrating solar thermal power (CSP) and wind power were also in fourth position [ 68 ].

Globally installed capacity of renewable energy in 2017—Global 2018 status report with regard to renewables [ 68 ]

The investment opportunities in renewable energy in India

The investments into renewable energy in India increased by 22% in the first half of 2018 compared to 2017, while the investments in China dropped by 15% during the same period, according to a statement by the Bloomberg New Energy Finance (BNEF), which is shown in Table 27 [ 69 , 70 ]. At this rate, India is expected to overtake China and become the most significant growth market for renewable energy by the end of 2020. The country is eyeing pole position for transformation in renewable energy by reaching 175 GW by 2020. To achieve this target, it is quickly ramping up investments in this sector. The country added more renewable capacity than conventional capacity in 2018 when compared to 2017. India hosted the ISA first official summit on the 11.03.2018 for 121 countries. This will provide a standard platform to work toward the ambitious targets for renewable energy. The summit will emphasize India’s dedication to meet global engagements in a time-bound method. The country is also constructing many sizeable solar power parks comparable to, but larger than, those in China. Half of the earth’s ten biggest solar parks under development are in India.

In 2014, the world largest solar park was the Topaz solar farm in California with a 550 MW facility. In 2015, another operator in California, Solar Star, edged its capacity up to 579 MW. By 2016, India’s Kamuthi Solar Power Project in Tamil Nadu was on top with 648 MW of capacity (set up by the Adani Green Energy, part of the Adani Group, in Tamil Nadu). As of February 2017, the Longyangxia Dam Solar Park in China was the new leader, with 850 MW of capacity [ 71 ]. Currently, there are 600 MW operating units and 1400 MW units under construction. The Shakti Sthala solar park was inaugurated on 01.03.2018 in Pavagada (Karnataka, India) which is expected to become the globe’s most significant solar park when it accomplishes its full potential of 2 GW. Another large solar park with 1.5 GW is scheduled to be built in the Kadappa region [ 72 ]. The progress in solar power is remarkable and demonstrates real clean energy development on the ground.

The Kurnool ultra-mega solar park generated 800 million units (MU) of energy in October 2018 and saved over 700,000 tons of CO 2 . Rainwater was harvested using a reservoir that helps in cleaning solar panels and supplying water. The country is making remarkable progress in solar energy. The Kamuthi solar farm is cleaned each day by a robotic system. As the Indian economy expands, electricity consumption is forecasted to reach 15,280 TWh in 2040. With the government’s intent, green energy objectives, i.e., the renewable sector, grow considerably in an attractive manner with both foreign and domestic investors. It is anticipated to attract investments of up to USD 80 billion in the subsequent 4 years. The government of India has raised its 175 GW target to 225 GW of renewable energy capacity by 2022. The competitive benefit is that the country has sun exposure possible throughout the year and has an enormous hydropower potential. India was also listed fourth in the EY renewable energy country attractive index 2018. Sixty solar cities will be built in India as a section of MNRE’s “Solar cities” program.

In a regular auction, reduction in tariffs cost of the projects are the competitive benefits in the country. India accounts for about 4% of the total global electricity generation capacity and has the fourth highest installed capacity of wind energy and the third highest installed capacity of CSP. The solar installation in India erected during 2015–2016, 2016–2017, 2017–2018, and 2018–2019 was 3.01 GW, 5.52 GW, 9.36 GW, and 6.53 GW, respectively. The country aims to add 8.5 GW during 2019–2020. Due to its advantageous location in the solar belt (400 South to 400 North), the country is one of the largest beneficiaries of solar energy with relatively ample availability. An increase in the installed capacity of solar power is anticipated to exceed the installed capacity of wind energy, approaching 100 GW by 2022 from its current levels of 25.21226 GW as of December 2018. Fast falling prices have made Solar PV the biggest market for new investments. Under the Union Budget 2018–2019, a zero import tax on parts used in manufacturing solar panels was launched to provide an advantage to domestic solar panel companies [ 73 ].

Foreign direct investment (FDI) inflows in the renewable energy sector of India between April 2000 and June 2018 amounted to USD 6.84 billion according to the report of the department of industrial policy and promotion (DIPP). The DIPP was renamed (gazette notification 27.01.2019) the Department for the Promotion of Industry and Internal Trade (DPIIT). It is responsible for the development of domestic trade, retail trade, trader’s welfare including their employees as well as concerns associated with activities in facilitating and supporting business and startups. Since 2014, more than 42 billion USD have been invested in India’s renewable power sector. India reached US$ 7.4 billion in investments in the first half of 2018. Between April 2015 and June 2018, the country received USD 3.2 billion FDI in the renewable sector. The year-wise inflows expanded from USD 776 million in 2015–2016 to USD 783 million in 2016–2017 and USD 1204 million in 2017–2018. Between January to March of 2018, the INR 452 crore (4520 Million INR, 63.3389 million USD) of the FDI had already come in. The country is contributing with financial and promotional incentives that include a capital subsidy, accelerated depreciation (AD), waiver of inter-state transmission charges and losses, viability gap funding (VGF), and FDI up to 100% under the automated track.

The DIPP/DPIIT compiles and manages the data of the FDI equity inflow received in India [ 74 ]. The FDI equity inflow between April 2015 and June 2018 in the renewable sector is illustrated in Fig. 7 . It shows that the 2018–2019 3 months’ FDI equity inflow is half of that of the entire one of 2017–2018. It is evident from the figure that India has well-established FDI equity inflows. The significant FDI investments in the renewable energy sectors are shown in Table 28 . The collaboration between the Asian development bank and Renew Power Ventures private limited with 44.69 million USD ranked first followed by AIRRO Singapore with Diligent power with FDI equity inflow of 44.69 USD million.

The FDI equity inflow received between April 2015 and June 2018 in the renewable energy sector [ 73 ]

Strategies to promote investments

Strategies to promote investments (including FDI) by investors in the renewable sector:

Decrease constraints on FDI; provide open, transparent, and dependable conditions for foreign and domestic firms; and include ease of doing business, access to imports, comparatively flexible labor markets, and safeguard of intellectual property rights.

Establish an investment promotion agency (IPA) that targets suitable foreign investors and connects them as a catalyst with the domestic economy. Assist the IPA to present top-notch infrastructure and immediate access to skilled workers, technicians, engineers, and managers that might be needed to attract such investors. Furthermore, it should involve an after-investment care, recognizing the demonstration effects from satisfied investors, the potential for reinvestments, and the potential for cluster-development due to follow-up investments.

It is essential to consider the targeted sector (wind, solar, SPH or biomass, respectively) for which investments are required.

Establish the infrastructure needed for a quality investor, including adequate close-by transport facilities (airport, ports), a sufficient and steady supply of energy, a provision of a sufficiently skilled workforce, the facilities for the vocational training of specialized operators, ideally designed in collaboration with the investor.

Policy and other support mechanisms such as Power Purchase Agreements (PPA) play an influential role in underpinning returns and restricting uncertainties for project developers, indirectly supporting the availability of investment. Investors in renewable energy projects have historically relied on government policies to give them confidence about the costs necessary for electricity produced—and therefore for project revenues. Reassurance of future power costs for project developers is secured by signing a PPA with either a utility or an essential corporate buyer of electricity.

FiT have been the most conventional approach around the globe over the last decade to stimulate investments in renewable power projects. Set by the government concerned, they lay down an electricity tariff that developers of qualifying new projects might anticipate to receive for the resulting electricity over a long interval (15–20 years). These present investors in the tax equity of renewable power projects with a credit that they can manage to offset the tax burden outside in their businesses.

Table 29 presents the 2018 renewable energy investment report, source-wise, by the significant players in renewables according to the report of the Bloomberg New Energy Finance Report 2018. As per this report, global investment in renewable energy was USD of 279.8 billion in 2017. The top ten in the total global investments are China (126.1 $BN), the USA (40.5 $BN), Japan (13.4 $BN), India (10.9 $BN), Germany (10.4 $BN), Australia (8.5 $BN), UK (7.6 $BN), Brazil (6.0 $BN), Mexico (6.0 $BN), and Sweden (3.7 $BN) [ 75 ]. This achievement was possible since those countries have well-established strategies for promoting investments [ 76 , 77 ].

The appropriate objectives for renewable power expansion and investments are closely related to the Nationally Determined Contributions (NDCs) objectives, the implementation of the NDC, on the road to achieving Paris promises, policy competence, policy reliability, market absorption capacity, and nationwide investment circumstances that are the real purposes for renewable power expansion, which is a significant factor for the investment strategies, as is shown in Table 30 .

The demand for investments for building a Paris-compatible and climate-resilient energy support remains high, particularly in emerging nations. Future investments in energy grids and energy flexibility are of particular significance. The strategies and the comparison chart between China, India, and the USA are presented in Table 31 .

Table 32 shows France in the first place due to overall favorable conditions for renewables, heading the G20 in investment attractiveness of renewables. Germany drops back one spot due to a decline in the quality of the global policy environment for renewables and some insufficiencies in the policy design, as does the UK. Overall, with four European countries on top of the list, Europe, however, directs the way in providing attractive conditions for investing in renewables. Despite high scores for various nations, no single government is yet close to growing a role model. All countries still have significant room for increasing investment demands to deploy renewables at the scale required to reach the Paris objectives. The table shown is based on the Paris compatible long-term vision, the policy environment for renewable energy, the conditions for system integration, the market absorption capacity, and general investment conditions. India moved from the 11th position to the 9th position in overall investments between 2017 and 2018.

A Paris compatible long-term vision includes a de-carbonization plan for the power system, the renewable power ambition, the coal and oil decrease, and the reliability of renewables policies. Direct support policies include medium-term certainty of policy signals, streamlined administrative procedures, ensuring project realization, facilitating the use of produced electricity. Conditions for system integration include system integration-grid codes, system integration-storage promotion, and demand-side management policies. A market absorption capacity includes a prior experience with renewable technologies, a current activity with renewable installations, and a presence of major renewable energy companies. General investment conditions include non-financial determinants, depth of the financial sector as well, as an inflation forecast.

Employment opportunities for citizens in renewable energy in India

Global employment scenario.

According to the 2018 Annual review of the IRENA [ 78 ], global renewable energy employment touched 10.3 million jobs in 2017, an improvement of 5.3% compared with the quantity published in 2016. Many socio-economic advantages derive from renewable power, but employment continues to be exceptionally centralized in a handful of countries, with China, Brazil, the USA, India, Germany, and Japan in the lead. In solar PV employment (3.4 million jobs), China is the leader (65% of PV Jobs) which is followed by Japan, USA, India, Bangladesh, Malaysia, Germany, Philippines, and Turkey. In biofuels employment (1.9 million jobs), Brazil is the leader (41% of PV Jobs) followed by the USA, Colombia, Indonesia, Thailand, Malaysia, China, and India. In wind employment (1.1 million jobs), China is the leader (44% of PV Jobs) followed by Germany, USA, India, UK, Brazil, Denmark, Netherlands, France, and Spain.

Table 33 shows global renewable energy employment in the corresponding technology branches. As in past years, China maintained the most notable number of people employed (3880 million jobs) estimating for 43% of the globe’s total which is shown in Fig. 8 . In India, new solar installations touched a record of 9.6 GW in 2017, efficiently increasing the total installed capacity. The employment in solar PV improved by 36% and reached 164,400 jobs, of which 92,400 represented on-grid use. IRENA determines that the building and installation covered 46% of these jobs, with operations and maintenance (O&M) representing 35% and 19%, individually. India does not produce solar PV because it could be imported from China, which is inexpensive. The market share of domestic companies (Indian supplier to renewable projects) declined from 13% in 2014–2015 to 7% in 2017–2018. If India starts the manufacturing base, more citizens will get jobs in the manufacturing field. India had the world’s fifth most significant additions of 4.1 GW to wind capacity in 2017 and the fourth largest cumulative capacity in 2018. IRENA predicts that jobs in the wind sector stood at 60,500.

Renewable energy employment in selected countries [ 79 ]

The jobs in renewables are categorized into technological development, installation/de-installation, operation, and maintenance. Tables 34 , 35 , 36 , and 37 show the wind industry, solar energy, biomass, and small hydro-related jobs in project development, component manufacturing, construction, operations, and education, training, and research. As technology quickly evolves, workers in all areas need to update their skills through continuing training/education or job training, and in several cases could benefit from professional certification. The advantages of moving to renewable energy are evident, and for this reason, the governments are responding positively toward the transformation to clean energy. Renewable energy can be described as the country’s next employment boom. Renewable energy job opportunities can transform rural economy [ 79 , 80 ]. The renewable energy sector might help to reduce poverty by creating better employment. For example, wind power is looking for specialists in manufacturing, project development, and construction and turbine installation as well as financial services, transportation and logistics, and maintenance and operations.

The government is building more renewable energy power plants that will require a workforce. The increasing investments in the renewable energy sector have the potential to provide more jobs than any other fossil fuel industry. Local businesses and renewable sectors will benefit from this change, as income will increase significantly. Many jobs in this sector will contribute to fixed salaries, healthcare benefits, and skill-building opportunities for unskilled and semi-skilled workers. A range of skilled and unskilled jobs are included in all renewable energy technologies, even though most of the positions in the renewable energy industry demand a skilled workforce. The renewable sector employs semi-skilled and unskilled labor in the construction, operations, and maintenance after proper training. Unskilled labor is employed as truck drivers, guards, cleaning, and maintenance. Semi-skilled labor is used to take regular readings from displays. A lack of consistent data on the potential employment impact of renewables expansion makes it particularly hard to assess the quantity of skilled, semi-skilled, and unskilled personnel that might be needed.

Key findings in renewable energy employment

The findings comprise (a) that the majority of employment in the renewable sector is contract based, and that employees do not benefit from permanent jobs or security. (b) Continuous work in the industry has the potential to decrease poverty. (c) Most poor citizens encounter obstacles to entry-level training and the employment market due to lack of awareness about the jobs and the requirements. (d) Few renewable programs incorporate developing ownership opportunities for the citizens and the incorporation of women in the sector. (e) The inadequacy of data makes it challenging to build relationships between employment in renewable energy and poverty mitigation.

Recommendations for renewable energy employment

When building the capacity, focus on poor people and individuals to empower them with training in operation and maintenance.

Develop and offer training programs for citizens with minimal education and training, who do not fit current programs, which restrict them from working in renewable areas.

Include women in the renewable workforce by providing localized training.

Establish connections between training institutes and renewable power companies to guarantee that (a) trained workers are placed in appropriate positions during and after the completion of the training program and (b) training programs match the requirements of the renewable sector.

Poverty impact assessments might be embedded in program design to know how programs motivate poverty reduction, whether and how they influence the community.

Allow people to have a sense of ownership in renewable projects because this could contribute to the growth of the sector.

The details of the job being offered (part time, full time, contract-based), the levels of required skills for the job (skilled, semi-skilled and unskilled), the socio-economic status of the employee data need to be collected for further analysis.

Conduct investigations, assisted by field surveys, to learn about the influence of renewable energy jobs on poverty mitigation and differences in the standard of living.

Challenges faced by renewable energy in India

The MNRE has been taking dedicated measures for improving the renewable sector, and its efforts have been satisfactory in recognizing various obstacles.

Policy and regulatory obstacles

A comprehensive policy statement (regulatory framework) is not available in the renewable sector. When there is a requirement to promote the growth of particular renewable energy technologies, policies might be declared that do not match with the plans for the development of renewable energy.

The regulatory framework and procedures are different for every state because they define the respective RPOs (Renewable Purchase Obligations) and this creates a higher risk of investments in this sector. Additionally, the policies are applicable for just 5 years, and the generated risk for investments in this sector is apparent. The biomass sector does not have an established framework.

Incentive accelerated depreciation (AD) is provided to wind developers and is evident in developing India’s wind-producing capacity. Wind projects installed more than 10 years ago show that they are not optimally maintained. Many owners of the asset have built with little motivation for tax benefits only. The policy framework does not require the maintenance of the wind projects after the tax advantages have been claimed. There is no control over the equipment suppliers because they undertake all wind power plant development activities such as commissioning, operation, and maintenance. Suppliers make the buyers pay a premium and increase the equipment cost, which brings burden to the buyer.

Furthermore, ready-made projects are sold to buyers. The buyers are susceptible to this trap to save income tax. Foreign investors hesitate to invest because they are exempted from the income tax.

Every state has different regulatory policy and framework definitions of an RPO. The RPO percentage specified in the regulatory framework for various renewable sources is not precise.

RPO allows the SERCs and certain private firms to procure only a part of their power demands from renewable sources.

RPO is not imposed on open access (OA) and captive consumers in all states except three.

RPO targets and obligations are not clear, and the RPO compliance cell has just started on 22.05.2018 to collect the monthly reports on compliance and deal with non-compliance issues with appropriate authorities.

Penalty mechanisms are not specified and only two states in India (Maharashtra and Rajasthan) have some form of penalty mechanisms.

The parameter to determine the tariff is not transparent in the regulatory framework and many SRECs have established a tariff for limited periods. The FiT is valid for only 5 years, and this affects the bankability of the project.

Many SERCs have not decided on adopting the CERC tariff that is mentioned in CERCs regulations that deal with terms and conditions for tariff determinations. The SERCs have considered the plant load factor (PLF) because it varies across regions and locations as well as particular technology. The current framework does not fit to these issues.

Third party sale (TPS) is not allowed because renewable generators are not allowed to sell power to commercial consumers. They have to sell only to industrial consumers. The industrial consumers have a low tariff and commercial consumers have a high tariff, and SRCS do not allow OA. This stops the profit for the developers and investors.

Institutional obstacles

Institutes, agencies stakeholders who work under the conditions of the MNRE show poor inter-institutional coordination. The progress in renewable energy development is limited by this lack of cooperation, coordination, and delays. The delay in implementing policies due to poor coordination, decrease the interest of investors to invest in this sector.

The single window project approval and clearance system is not very useful and not stable because it delays the receiving of clearances for the projects ends in the levy of a penalty on the project developer.

Pre-feasibility reports prepared by concerned states have some deficiency, and this may affect the small developers, i.e., the local developers, who are willing to execute renewable projects.

The workforce in institutes, agencies, and ministries is not sufficient in numbers.

Proper or well-established research centers are not available for the development of renewable infrastructure.

Customer care centers to guide developers regarding renewable projects are not available.

Standards and quality control orders have been issued recently in 2018 and 2019 only, and there are insufficient institutions and laboratories to give standards/certification and validate the quality and suitability of using renewable technology.

Financial and fiscal obstacles

There are a few budgetary constraints such as fund allocation, and budgets that are not released on time to fulfill the requirement of developing the renewable sector.

The initial unit capital costs of renewable projects are very high compared to fossil fuels, and this leads to financing challenges and initial burden.

There are uncertainties related to the assessment of resources, lack of technology awareness, and high-risk perceptions which lead to financial barriers for the developers.

The subsidies and incentives are not transparent, and the ministry might reconsider subsidies for renewable energy because there was a sharp fall in tariffs in 2018.

Power purchase agreements (PPA) signed between the power purchaser and power generators on pre-determined fixed tariffs are higher than the current bids (Economic survey 2017–2018 and union budget on the 01.02.2019). For example, solar power tariff dropped to 2.44 INR (0. 04 USD) per unit in May 2017, wind power INR 3.46 per unit in February 2017, and 2.64 INR per unit in October 2017.

Investors feel that there is a risk in the renewable sector as this sector has lower gross returns even though these returns are relatively high within the market standards.

There are not many developers who are interested in renewable projects. While newly established developers (small and local developers) do not have much of an institutional track record or financial input, which are needed to develop the project (high capital cost). Even moneylenders consider it risky and are not ready to provide funding. Moneylenders look exclusively for contractors who have much experience in construction, well-established suppliers with proven equipment and operators who have more experience.

If the performance of renewable projects, which show low-performance, faces financial obstacles, they risks the lack of funding of renewable projects.

Financial institutions such as government banks or private banks do not have much understanding or expertise in renewable energy projects, and this imposes financial barriers to the projects.

Delay in payment by the SERCs to the developers imposes debt burden on the small and local developers because moneylenders always work with credit enhancement mechanisms or guarantee bonds signed between moneylenders and the developers.

Market obstacles

Subsidies are adequately provided to conventional fossil fuels, sending the wrong impression that power from conventional fuels is of a higher priority than that from renewables (unfair structure of subsidies)

There are four renewable markets in India, the government market (providing budgetary support to projects and purchase the output of the project), the government-driven market (provide budgetary support or fiscal incentives to promote renewable energy), the loan market (taking loan to finance renewable based applications), and the cash market (buying renewable-based applications to meet personal energy needs by individuals). There is an inadequacy in promoting the loan market and cash market in India.

The biomass market is facing a demand-supply gap which results in a continuous and dramatic increase in biomass prices because the biomass supply is unreliable (and, as there is no organized market for fuel), and the price fluctuations are very high. The type of biomass is not the same in all the states of India, and therefore demand and price elasticity is high for biomass.

Renewable power was calculated based on cost-plus methods (adding direct material cost, direct labor cost, and product overhead cost). This does not include environmental cost and shields the ecological benefits of clean and green energy.

There is an inadequate evacuation infrastructure and insufficient integration of the grid, which affects the renewable projects. SERCs are not able to use all generated power to meet the needs because of the non-availability of a proper evacuation infrastructure. This has an impact on the project, and the SERCs are forced to buy expensive power from neighbor states to fulfill needs.

Extending transmission lines is not possible/not economical for small size projects, and the seasonality of generation from such projects affect the market.

There are few limitations in overall transmission plans, distribution CapEx plans, and distribution licenses for renewable power. Power evacuation infrastructure for renewable energy is not included in the plans.

Even though there is an increase in capacity for the commercially deployed renewable energy technology, there is no decline in capital cost. This cost of power also remains high. The capital cost quoted by the developers and providers of equipment is too high due to exports of machinery, inadequate built up capacity, and cartelization of equipment suppliers (suppliers join together to control prices and limit competition).

There is no adequate supply of land, for wind, solar, and solar thermal power plants, which lead to poor capacity addition in many states.

Technological obstacles

Every installation of a renewable project contributes to complex risk challenges from environmental uncertainties, natural disasters, planning, equipment failure, and profit loss.

MNRE issued the standardization of renewable energy projects policy on the 11th of December 2017 (testing, standardization, and certification). They are still at an elementary level as compared to international practices. Quality assurance processes are still under starting conditions. Each success in renewable energy is based on concrete action plans for standards, testing and certification of performance.

The quality and reliability of manufactured components, imported equipment, and subsystems is essential, and hence quality infrastructure should be established. There is no clear document related to testing laboratories, referral institutes, review mechanism, inspection, and monitoring.

There are not many R&D centers for renewables. Methods to reduce the subsidies and invest in R&D lagging; manufacturing facilities are just replicating the already available technologies. The country is dependent on international suppliers for equipment and technology. Spare parts are not manufactured locally and hence they are scarce.

Awareness, education, and training obstacles

There is an unavailability of appropriately skilled human resources in the renewable energy sector. Furthermore, it faces an acute workforce shortage.

After installation of renewable project/applications by the suppliers, there is no proper follow-up or assistance for the workers in the project to perform maintenance. Likewise, there are not enough trained and skilled persons for demonstrating, training, operation, and maintenance of the plant.

There is inadequate knowledge in renewables, and no awareness programs are available to the general public. The lack of awareness about the technologies is a significant obstacle in acquiring vast land for constructing the renewable plant. Moreover, people using agriculture lands are not prepared to give their land to construct power plants because most Indians cultivate plants.

The renewable sector depends on the climate, and this varying climate also imposes less popularity of renewables among the people.

The per capita income is low, and the people consider that the cost of renewables might be high and they might not be able to use renewables.

The storage system increases the cost of renewables, and people believe it too costly and are not ready to use them.

The environmental benefits of renewable technologies are not clearly understood by the people and negative perceptions are making renewable technologies less prevalent among them.

Environmental obstacles

A single wind turbine does not occupy much space, but many turbines are placed five to ten rotor diameters from each other, and this occupies more area, which include roads and transmission lines.

In the field of offshore wind, the turbines and blades are bigger than onshore wind turbines, and they require a substantial amount of space. Offshore installations affect ocean activities (fishing, sand extraction, gravel extraction, oil extraction, gas extraction, aquaculture, and navigation). Furthermore, they affect fish and other marine wildlife.

Wind turbines influence wildlife (birds and bats) because of the collisions with them and due to air pressure changes caused by wind turbines and habitat disruption. Making wind turbines motionless during times of low wind can protect birds and bats but is not practiced.

Sound (aerodynamic, mechanical) and visual impacts are associated with wind turbines. There is poor practice by the wind turbine developers regarding public concerns. Furthermore, there are imperfections in surfaces and sound—absorbent material which decrease the noise from turbines. The shadow flicker effect is not taken as severe environmental impact by the developers.

Sometimes wind turbine material production, transportation of materials, on-site construction, assembling, operation, maintenance, dismantlement, and decommissioning may be associated with global warming, and there is a lag in this consideration.

Large utility-scale solar plants require vast lands that increase the risk of land degradation and loss of habitat.

The PV cell manufacturing process includes hazardous chemicals such as 1-1-1 Trichloroethene, HCL, H 2 SO 4 , N 2 , NF, and acetone. Workers face risks resulting from inhaling silicon dust. The manufacturing wastes are not disposed of properly. Proper precautions during usage of thin-film PV cells, which contain cadmium—telluride, gallium arsenide, and copper-indium-gallium-diselenide are missing. These materials create severe public health threats and environmental threats.

Hydroelectric power turbine blades kill aquatic ecosystems (fish and other organisms). Moreover, algae and other aquatic weeds are not controlled through manual harvesting or by introducing fish that can eat these plants.

Discussion and recommendations based on the research

Policy and regulation advancements.

The MNRE should provide a comprehensive action plan or policy for the promotion of the renewable sector in its regulatory framework for renewables energy. The action plan can be prepared in consultation with SERCs of the country within a fixed timeframe and execution of the policy/action plan.

The central and state government should include a “Must run status” in their policy and follow it strictly to make use of renewable power.

A national merit order list for renewable electricity generation will reduce power cost for the consumers. Such a merit order list will help in ranking sources of renewable energy in an ascending order of price and will provide power at a lower cost to each distribution company (DISCOM). The MNRE should include that principle in its framework and ensure that SERCs includes it in their regulatory framework as well.

SERCs might be allowed to remove policies and regulatory uncertainty surrounding renewable energy. SERCs might be allowed to identify the thrust areas of their renewable energy development.

There should be strong initiatives from municipality (local level) approvals for renewable energy-based projects.

Higher market penetration is conceivable only if their suitable codes and standards are adopted and implemented. MNRE should guide minimum performance standards, which incorporate reliability, durability, and performance.

A well-established renewable energy certificates (REC) policy might contribute to an efficient funding mechanism for renewable energy projects. It is necessary for the government to look at developing the REC ecosystem.

The regulatory administration around the RPO needs to be upgraded with a more efficient “carrot and stick” mechanism for obligated entities. A regulatory mechanism that both remunerations compliance and penalizes for non-compliance may likely produce better results.

RECs in India should only be traded on exchange. Over-the-counter (OTC) or off-exchange trading will potentially allow greater participation in the market. A REC forward curve will provide further price determination to the market participants.

The policymakers should look at developing and building the REC market.

Most states have defined RPO targets. Still, due to the absence of implemented RPO regulations and the inadequacy of penalties when obligations are not satisfied, several of the state DISCOMs are not complying completely with their RPO targets. It is necessary that all states adhere to the RPO targets set by respective SERCs.

The government should address the issues such as DISCOM financials, must-run status, problems of transmission and evacuation, on-time payments and payment guarantees, and deemed generation benefits.

Proper incentives should be devised to support utilities to obtain power over and above the RPO mandated by the SERC.

The tariff orders/FiTs must be consistent and not restricted for a few years.

Transmission requirements

The developers are worried that transmission facilities are not keeping pace with the power generation. Bays at the nearest substations are occupied, and transmission lines are already carrying their full capacity. This is due to the lack of coordination between MNRE and the Power Grid Corporation of India (PGCIL) and CEA. Solar Corporation of India (SECI) is holding auctions for both wind and solar projects without making sure that enough evacuation facilities are available. There is an urgent need to make evacuation plans.

The solution is to develop numerous substations and transmission lines, but the process will take considerably longer time than the currently under-construction projects take to get finished.

In 2017–2018, transmission lines were installed under the green energy corridor project by the PGCIL, with 1900 circuit km targeted in 2018–2019. The implementation of the green energy corridor project explicitly meant to connect renewable energy plants to the national grid. The budget allocation of INR 6 billion for 2018–2019 should be increased to higher values.

The mismatch between MNRE and PGCIL, which are responsible for inter-state transmission, should be rectified.

State transmission units (STUs) are responsible for the transmission inside the states, and their fund requirements to cover the evacuation and transmission infrastructure for renewable energy should be fulfilled. Moreover, STUs should be penalized if they fail to fulfill their responsibilities.

The coordination and consultation between the developers (the nodal agency responsible for the development of renewable energy) and STUs should be healthy.

Financing the renewable sector

The government should provide enough budget for the clean energy sector. China’s annual budget for renewables is 128 times higher than India’s. In 2017, China spent USD 126.6 billion (INR 9 lakh crore) compared to India’s USD 10.9 billion (INR 75500 crore). In 2018, budget allocations for grid interactive wind and solar have increased but it is not sufficient to meet the renewable target.

The government should concentrate on R&D and provide a surplus fund for R&D. In 2017, the budget allotted was an INR 445 crore, which was reduced to an INR 272.85 crore in 2016. In 2017–2018, the initial allocation was an INR 144 crore that was reduced to an INR 81 crore during the revised estimates. Even the reduced amounts could not be fully used, there is an urgent demand for regular monitoring of R&D and the budget allocation.

The Goods and Service Tax (GST) that was introduced in 2017 worsened the industry performance and has led to an increase in costs and poses a threat to the viability of the ongoing projects, ultimately hampering the target achievement. These GST issues need to be addressed.

Including the renewable sector as a priority sector would increase the availability of credit and lead to a more substantial participation by commercial banks.

Mandating the provident funds and insurance companies to invest the fixed percentage of their portfolio into the renewable energy sector.

Banks should allow an interest rebate on housing loans if the owner is installing renewable applications such as solar lights, solar water heaters, and PV panels in his house. This will encourage people to use renewable energy. Furthermore, income tax rebates also can be given to individuals if they are implementing renewable energy applications.

Improvement in manufacturing/technology

The country should move to domestic manufacturing. It imports 90% of its solar cell and module requirements from Malaysia, China, and Taiwan, so it is essential to build a robust domestic manufacturing basis.

India will provide “safeguard duty” for merely 2 years, and this is not adequate to build a strong manufacturing basis that can compete with the global market. Moreover, safeguard duty would work only if India had a larger existing domestic manufacturing base.

The government should reconsider the safeguard duty. Many foreign companies desiring to set up joint ventures in India provide only a lukewarm response because the given order in its current form presents inadequate safeguards.

There are incremental developments in technology at regular periods, which need capital, and the country should discover a way to handle these factors.

To make use of the vast estimated renewable potential in India, the R&D capability should be upgraded to solve critical problems in the clean energy sector.

A comprehensive policy for manufacturing should be established. This would support capital cost reduction and be marketed on a global scale.

The country should initiate an industry-academia partnership, which might promote innovative R&D and support leading-edge clean power solutions to protect the globe for future generations.

Encourage the transfer of ideas between industry, academia, and policymakers from around the world to develop accelerated adoption of renewable power.

Awareness about renewables

Social recognition of renewable energy is still not very promising in urban India. Awareness is the crucial factor for the uniform and broad use of renewable energy. Information about renewable technology and their environmental benefits should reach society.

The government should regularly organize awareness programs throughout the country, especially in villages and remote locations such as the islands.

The government should open more educational/research organizations, which will help in spreading knowledge of renewable technology in society.

People should regularly be trained with regard to new techniques that would be beneficial for the community.

Sufficient agencies should be available to sell renewable products and serve for technical support during installation and maintenance.

Development of the capabilities of unskilled and semiskilled workers and policy interventions are required related to employment opportunities.

An increase in the number of qualified/trained personnel might immediately support the process of installations of renewables.

Renewable energy employers prefer to train employees they recruit because they understand that education institutes fail to give the needed and appropriate skills. The training institutes should rectify this issue. Severe trained human resources shortages should be eliminated.

Upgrading the ability of the existing workforce and training of new professionals is essential to achieve the renewable goal.

Hybrid utilization of renewables

The country should focus on hybrid power projects for an effective use of transmission infrastructure and land.

India should consider battery storage in hybrid projects, which support optimizing the production and the power at competitive prices as well as a decrease of variability.

Formulate mandatory standards and regulations for hybrid systems, which are lagging in the newly announced policies (wind-solar hybrid policy on 14.05.2018).

The hybridization of two or more renewable systems along with the conventional power source battery storage can increase the performance of renewable technologies.

Issues related to sizing and storage capacity should be considered because they are key to the economic viability of the system.

Fiscal and financial incentives available for hybrid projects should be increased.

The renewable sector suffers notable obstacles. Some of them are inherent in every renewable technology; others are the outcome of a skewed regulative structure and marketplace. The absence of comprehensive policies and regulation frameworks prevent the adoption of renewable technologies. The renewable energy market requires explicit policies and legal procedures to enhance the attention of investors. There is a delay in the authorization of private sector projects because of a lack of clear policies. The country should take measures to attract private investors. Inadequate technology and the absence of infrastructure required to establish renewable technologies should be overcome by R&D. The government should allow more funds to support research and innovation activities in this sector. There are insufficiently competent personnel to train, demonstrate, maintain, and operate renewable energy structures and therefore, the institutions should be proactive in preparing the workforce. Imported equipment is costly compared to that of locally manufactured; therefore, generation of renewable energy becomes expensive and even unaffordable. Hence, to decrease the cost of renewable products, the country should become involve in the manufacturing of renewable products. Another significant infrastructural obstacle to the development of renewable energy technologies is unreliable connectivity to the grid. As a consequence, many investors lose their faith in renewable energy technologies and are not ready to invest in them for fear of failing. India should work on transmission and evacuation plans.

Inadequate servicing and maintenance of facilities and low reliability in technology decreases customer trust in some renewable energy technologies and hence prevent their selection. Adequate skills to repair/service the spare parts/equipment are required to avoid equipment failures that halt the supply of energy. Awareness of renewable energy among communities should be fostered, and a significant focus on their socio-cultural practices should be considered. Governments should support investments in the expansion of renewable energy to speed up the commercialization of such technologies. The Indian government should declare a well-established fiscal assistance plan, such as the provision of credit, deduction on loans, and tariffs. The government should improve regulations making obligations under power purchase agreements (PPAs) statutorily binding to guarantee that all power DISCOMs have PPAs to cover a hundred percent of their RPO obligation. To accomplish a reliable system, it is strongly suggested that renewables must be used in a hybrid configuration of two or more resources along with conventional source and storage devices. Regulatory authorities should formulate the necessary standards and regulations for hybrid systems. Making investments economically possible with effective policies and tax incentives will result in social benefits above and beyond the economic advantages.

Availability of data and materials

Not applicable.

Abbreviations

Accelerated depreciation

Billion units

Central Electricity Authority of India

Central electricity regulatory commission

Central financial assistance

Expression of interest

Foreign direct investment

Feed-in-tariff

Ministry of new and renewable energy

Research and development

Renewable purchase obligations

State electricity regulatory

Small hydropower

Terawatt hours

Waste to energy

Chr.Von Zabeltitz (1994) Effective use of renewable energies for greenhouse heating. Renewable Energy 5:479-485.

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The authors gratefully acknowledge the support provided by the Research Consultancy Institute (RCI) and the department of Electrical and Computer Engineering of Effat University, Saudi Arabia.

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Kumar. J, C.R., Majid, M.A. Renewable energy for sustainable development in India: current status, future prospects, challenges, employment, and investment opportunities. Energ Sustain Soc 10 , 2 (2020). https://doi.org/10.1186/s13705-019-0232-1

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India is reinventing its energy strategy—and the climate may depend on it

Can the nation meet the demands of a booming middle class while curbing carbon emissions? The planet's future will hinge on the answer.

On a warm and humid morning in the central Indian state of Madhya Pradesh last September, Chetan Singh Solanki stepped off a bus he’d been living in for the past 10 months and walked into a high school auditorium in the small town of Raisen, where 200 students, teachers, and officials had gathered to hear him speak.

A solar energy professor at the Indian Institute of Technology (IIT) in Mumbai, Solanki is a slender man in his mid-40s with a boyish appearance and a quick smile that are assets for the mission he’s on. In late 2020 he took a leave to make an 11-year road trip around India to inspire action to fight climate change. Solanki’s vehicle is a mobile demonstration of the utility of renewable energy: Solar panels generate enough electricity to run the lights, fans, computers, stove, and television on board. After being garlanded and welcomed on the stage, Solanki made an unusual request.

“I see 15 ceiling fans in this room. It’s the middle of the day, there’s so much sunlight outside, yet we have so many lights on in here,” he said. “Do we really need all of these fans and lights? Let’s turn some of them off and see if we’ll be OK with it.”

A couple of students got up to do what he asked. “Leave some of them on, though!” Solanki joked when one student got carried away.

With half the lights and fans switched off, the auditorium felt warmer and darker. But, Solanki asked, did it really matter all that much? “We can see one another just fine, which means there’s sufficient light in this room,” he said. “Is anyone feeling distressed because some fans have been turned off? Thinking, Oh God, how am I going to make it?” The audience laughed.

The point Solanki was making is one of two that he hopes will persuade Indians to achieve what he calls Energy Swaraj, or energy self-reliance. One idea is to save energy directly by reducing usage and indirectly by consuming less stuff. The other is to generate electricity locally from renewable resources such as the sun, so every town becomes self-sufficient. During the next decade, India’s greenhouse gas emissions are projected to increase steeply as the economy expands and the population grows to 1.5 billion, surpassing China’s population.

“Humankind’s lust for never ending economic growth is rapidly changing the planet’s climate,” he warned. “Our arrogance makes us think we can keep increasing consumption without consequence. But the world has finite resources. Unless we change our ways, future generations will have to endure great suffering.”

For Hungry Minds

Solanki grew up in a small village and was the first in his family to get a college degree. At IIT, he founded a center for solar cell technology. Aiming to kick-start a grassroots solar revolution, he started a nonprofit called the Energy Swaraj Foundation, which trains rural women to assemble and sell solar lamps and rooftop panels. Three years ago he started thinking about how Mohandas Gandhi—whom Solanki idolizes—might have responded to the climate crisis. That’s how he came up with the road trip: He’s hoping to spark a mass movement, just as Gandhi did when he led a historic 25-day, 241-mile march during India’s freedom struggle against British rule.

Solanki’s exhortation to live simply may seem surprising in a country with such low per capita consumption. On average, Indians use goods and services worth about a thousand dollars a year—one-fortieth of what Americans do. Yet Solanki’s approach could be critical to India’s efforts to reduce its contribution to global warming. At the country’s current rate of economic growth, the middle class is expected to double by 2030, to 800 million. This will be a welcome milestone for India because it will lift many out of poverty. But it also will mean a tsunami of new consumers who will want spacious homes and air conditioners and appliances and cars, significantly increasing the country’s carbon footprint.

On August 15, India will celebrate 75 years of independence. The country has made monumental progress during that period: achieving self-sufficiency in food production, creating a space program that launched an orbiter to Mars, supplying vaccines to about a hundred countries, and transforming into a technological powerhouse and the sixth largest economy in the world.

Now, as an emerging world power, India is stepping up to tackle climate change. With the creation of 45 solar parks; a plan to have 40 percent of buses, 30 percent of private cars, and 80 percent of two- and three-wheelers go electric by 2030; and a mission to become a global leader in the production of hydrogen as an alternative to fossil fuels, the country is making strides toward greening its future—and the world’s.

Even so, India faces more daunting challenges than any other country. The rapid expansion of its middle class will drive up energy consumption during the next two decades more than anywhere else. To meet the demand, India likely will remain heavily dependent on coal—an abundant resource—for many years while continuing to increase its petroleum imports. The stakes couldn’t be higher. The planet’s future hinges, in many ways, on how India navigates the path ahead, balancing its pursuit of strong economic growth with the need to curb emissions.

India is the fourth biggest emitter of greenhouse gases, behind China, the United States, and the European Union. Prime Minister Narendra Modi has pledged to reach net-zero emissions by 2070—20 years past the deadline set by the U.S. and 10 years later than China’s. India also has promised to reduce its emissions intensity—the volume of emissions per unit of gross domestic product—before the end of the decade, to 45 percent lower than it was in 2005. The country’s total emissions, however, are predicted to keep rising until about 2045.

The long horizon to get to net zero and the insistence on using emissions intensity, rather than emissions, to track progress disappointed some environmental activists, but Indian officials say the country is doing more than its fair share within the constraints of a developing nation. Until about 15 years ago, India’s stance, still common among developing countries, was that climate change needed to be tackled by industrialized nations, such as the U.S., because they had been pumping carbon dioxide into the atmosphere long before India had much of a carbon footprint. The disparity in the share of responsibility for the problem is hard to miss. All one needs to do is compare lifestyles in the West, where personal car ownership, air-conditioned homes, and other energy-intensive comforts are the norm, with the way that most Indians live, even today—in a state of extreme austerity.

As the changing climate sparked increasing alarm in the mid-2000s, India became more willing to search for solutions. “There was a growing feeling that we need to go beyond ascribing blame,” says R.R. Rashmi, a former bureaucrat who represented India in climate negotiations for many years and is now a fellow at the Energy and Resources Institute (TERI) in New Delhi. “It’s a global problem; everybody must share the burden.”

India has plenty of reasons to be worried. The country’s 4,670-mile coastline is under threat from sea-level rise, especially the low-lying eastern coast, which could be calamitous for tens of millions of people. This spring, after the hottest March on record, an extended heat wave sent temperatures soaring above 100 degrees across much of the country, withering crops in the field. Droughts also are becoming more severe. Cyclones are lashing the coasts with increasing fury, flooding urban areas.

“A deep depression may take the form of a cyclonic storm, a cyclonic storm may become a severe cyclonic storm, and a severe one may turn into a very severe cyclonic storm,” says Suruchi Bhadwal, a researcher at TERI. “So the nature of the events is changing.”

India’s vulnerability to climate change is a prime motivation for the country’s policymakers to act, but concern over India’s energy security—the country will spend a hundred billion dollars this year on oil imports—is another driver.

“India is really starting well,” says Niklas Höhne, a researcher at the NewClimate Institute in Germany, citing, in particular, the expansion of renewable energy and the development of transportation systems that don’t rely on fossil fuels. But he points out that not all of India’s steps are in the right direction. The country relies on 285 coal-fired plants—and plans to build 48 more by the end of the decade.

To try to understand India’s dependence on coal, I visited Jharia in the coal-rich eastern state of Jharkhand. Standing on the edge of a 30-foot-deep pit the size of a few football fields, I watched workers load explosives into holes drilled in a far corner. Somebody handed me a hard hat, and a supervisor ordered the charges detonated. The sound echoed across the coal mine. Rocks flew high in the air. A dust cloud billowed over the site of the explosion.

This quarry is new. Miners will blast out several more feet of earth to get to the coal seam. India is opening more mines like this one to meet its growing needs. The choice to continue burning coal, instead of switching to cleaner fuels, is driven by a simple fact: India has enormous coal reserves, nearly a tenth of the world’s total. And yet its production capacity of about 850 million tons a year isn’t enough. The country imports about 200 million tons annually.

After the blast, I walked over to a corrugated metal shed where workers congregate and talked with Ram Madhab Bhattacharjee, a professor of mining at the Indian Institute of Technology in nearby Dhanbad with years of experience in the industry. A soft-spoken man who had helped organize my visit, Bhattacharjee is a member of a government panel studying the future of coal in India. According to the panel’s projections, the country’s demand for coal is expected to reach about 1.4 billion tons by 2035.

“We cannot afford to not increase our production,” Bhattacharjee told me. “Once we get to 1.4 billion tons, we may plateau for five to 10 years and then start declining. But that’ll be by 2050 or so.”

A giant dump truck trundled past us, loaded with rocks and soil. Rubble from mines has left the landscape dotted with hillocks. Bhattacharjee described a conversation he’d had days earlier with a senior official from Coal India, the world’s largest coal producer, who’d told him: “I’m getting so many calls from either the coal secretary or the coal minister or power plants—everybody’s asking for coal, coal, and coal.”

Phasing out coal also is challenging because nearly four million Indians rely on it for their livelihoods. Besides mine workers, thousands of people make a living by scavenging for lumps at mines and lugging sacks of stolen coal on bicycles to sell on the black market for use in homes, restaurants, and factories. “There’s already a lot of unemployment here,” Jitender Singh, a mine worker, told me. “If you end coal production, it will make things worse for this region.”

None of the workers I spoke with, including Singh, knew much about climate change. “I haven’t had any time to watch the news on television,” Rajesh Chauhan, a supervisor, told me. “I work my shift here, then I go home and take care of my family.” Talking with the workers about global warming felt embarrassingly esoteric and far removed from their concerns of everyday living. Some wondered how they would survive if the mines were shut down. Others were more optimistic. “There will always be work to be found,” Chauhan said.

The country needs to prepare for the transition away from coal, says Sandeep Pai, a researcher with the Center for Strategic and International Studies in Washington, D.C., who is collaborating with policymakers in India to help shape these plans. One imperative is to optimize coal consumption by extracting more energy per unit. Because of their proximity to mines and agreements with India’s coal-producing companies, older power plants have better access to coal than do the newer ones, which utilize it more efficiently.

“When you shut down some of these older plants, your overall coal demand will come down,” Pai says. Places dependent on coal, like Jharkhand, will need to create alternative sources of employment—a challenge facing other parts of the world, such as West Virginia in the U.S. “Some of these states have really good tourism potential,” Pai says. Another idea is to reclaim abandoned mines for agriculture and other purposes—a task that could employ a great many people for years.

India already is moving   toward a future in which a large share of its energy will come from the sun, wind, and water. Since 2010, when the Indian government set a modest target of 20 gigawatts of solar capacity by 2022, the amount has grown dramatically. This has been driven by the plummeting cost of photovoltaic cells and a government initiative to create large parks where utility companies are incentivized to build solar plants. India passed the original target of 20 gigawatts four years before the deadline and is in a dash to meet a revised one of 100 gigawatts before the end of the year. India’s current renewable energy capacity is about 151 gigawatts from solar, wind, biomass, and hydroelectric. But last year Modi announced that the country would generate 500 gigawatts by 2030.

In pursuit of this ambitious goal, India is counting on the expansion of solar and wind projects in states such as Rajasthan, two-thirds of which is covered by desert. In the summer, temperatures can soar above 110 degrees. Shimmering heat and strong winds there often force people to stay indoors for hours at a stretch during the day. The conditions are so inhospitable that huge tracts are devoid of human habitation. Subodh Agarwal, the top administrator of a district in the state’s desert region in the 1990s, recalls getting stuck in dust storms. “The roads would disappear under sand,” he says.

Until recently, this foreboding landscape was viewed as a wasteland. But some of it has begun to undergo a remarkable transformation. At a place called Bhadla, a 22-square-mile area has been turned into a sea of blue by row upon row of solar panels. “It’s a color people aren’t used to seeing in the desert,” says Agarwal, who has played a role in this transformation as the former head of the Rajasthan Renewable Energy Corporation, a government agency that sets aside land and finds investors for solar and wind projects.

The solar park at Bhadla is one of the largest in the world, able to produce about 2.25 gigawatts of electricity—enough to power a million households. Several others have been commissioned in Rajasthan, and more are in development. I toured one near Jaisalmer, a city close to India’s border with Pakistan best known for a magnificent medieval fortress that attracts tourists during the cooler months. An official from the agency and I drove about 40 miles from the city into a flat, sandy expanse sparsely dotted with vegetation.

Entering the park, we drove past thousands of boxes of solar panels stacked one on top of another over an area the size of a city block, waiting to be unpacked and mounted on rows of metal pillars. Several acres already had panels installed. Every few days, the panels need to be hosed down to remove the thick film of dust that accumulates on their surface. Walking between two rows, I heard the whir of a motor tilting the panels a few degrees to adjust to the angle of the sun’s rays as the day progressed. Inside a nearby building, a half dozen engineers were seated in front of computer screens, watching for modules that needed troubleshooting. “Right this minute, we’re producing 167 megawatts of electricity,” an engineer told me, pointing to a graph on his monitor that showed the power output steadily rising since morning. “We’ll hit peak between 12 and one, and then keep going down until sunset.”

One hurdle for India is the dearth of domestic solar cell manufacturing. The panels at the site I visited were entirely made in India, but most solar installations rely on imports from China. Earlier this year, the Indian government announced a $2.6 billion program to accelerate solar equipment manufacturing.

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India is counting on large-scale projects, but there’s also the hope embodied by Solanki that Indians themselves will join the solar revolution. Farmers, for example, can take advantage of a new government program allowing them to lease their agricultural land—which previously was restricted to farming—for solar power plants and solar pumps. In sun-rich states such as Rajasthan and Gujarat, homeowners and businesspeople are installing solar modules on their rooftops. And women in rural Rajasthan and Maharashtra, with help from Solanki’s Energy Swaraj Foundation, are starting companies to make solar products.

India’s transportation minister,   Nitin Gadkari, a straight-talking politician who seems to have a perpetual smile, showed up earlier this year at parliament, in New Delhi, in a hydrogen-powered car. He was making a point. As he told reporters, the government intends to make the country a leading manufacturer of green hydrogen.

The bulk of hydrogen produced today is derived from fossil fuels. Green hydrogen is made by splitting water through electrolysis, using renewable energy. As a fuel for transportation, it would cut emissions since burning hydrogen produces no greenhouse gases. It also would lower the carbon footprint of industries that need hydrogen to make goods such as fertilizer and steel. And unlike wind and solar, which are intermittent, green hydrogen can be stored for future use, just like fossil fuels.

As the costs of renewable energy and electrolyzers come down, green hydrogen is expected to become cheaper. India wants to reduce its cost 75 percent by 2030, says Amitabh Kant, the CEO of NITI Aayog, the country’s chief planning agency. “India has been a champion of renewable energy. The challenge for it now is to become a champion of the clean molecule—and that is green hydrogen,” he says. The idea is that driving down the price by scaling up production will make it a viable alternative to petroleum—especially for long-haul trucks, ships, and airplanes, which cannot be powered by batteries.

Nearly a quarter of India’s emissions come from industry, which is under increasing regulatory pressure to switch to cleaner fuels and be more energy efficient. The country’s cement manufacturers—second only to the iron and steel industry as a source of emissions, accounting for 8 percent—have become greener. A ton of cement produced in India has a smaller carbon footprint than the global average—the result of recovering more waste heat from flue gases, blending cement with fly ash from coal-fired power plants, and using green alternatives as fuel.

At a cement plant owned by the Dalmia Bharat Group in Ariyalur, Tamil Nadu, the factory’s engineers are using nonbiodegradable municipal garbage along with industrial refuse, such as paint sludge and rubber, as fuel for the kiln, where limestone and clay are heated in the process of making cement. Burning such wastes normally creates toxic smoke, but they can be incinerated at very high temperatures without polluting the atmosphere.

“The energy added by them lowers the energy required to maintain the kiln temperature,” says T.R. Robert, the head of the plant. Using waste has helped the plant cut its coal consumption by 15 percent.

Similarly, other industries, including steel, are accelerating their efforts to improve energy efficiency, prodded by a “perform, achieve, trade” program that allows companies to sell credits earned by exceeding mandated efficiency targets to companies that fall short. The government is especially keen to improve energy efficiency in new homes and commercial buildings, which are being built at a dizzying pace.

“Whatever the country built in the last 40, 50 years, we expect to build 80 percent of that in the next 10 years,” says Abhay Bakre, the head of India’s Bureau of Energy Efficiency. “And most of it will be air-conditioned.” A lot of this construction is happening in a hundred cities that the government is upgrading to “smart cities”—by adding new urban areas with energy-efficient buildings and putting in place improved infrastructure, such as better waste management facilities and public transportation.

The government has updated its energy conservation code for new large commercial buildings, and Bakre is optimistic that advances in design and materials will greatly reduce their energy burden. “If you ask an architect to design a building today,” Bakre says, “he’s not going to come up with the same design as 10 years ago. He’ll make better use of natural light; he’ll use better insulation, efficient lighting, efficient air-conditioning, pumps, water services.”

On visits to India over the past two decades, I have seen the growing presence and affluence of its middle class. The changes in lifestyle are visible not just in the shiny malls of big cities, such as Delhi and Mumbai, but also in smaller towns, where narrow streets once filled with bicycles and rickshaws now teem with cars and motorbikes. In Dhanbad I talked with an automobile salesman named P.J. Kumar at a swanky dealership staffed with nattily dressed men and women. He told me that 20 years ago business owners bought most of the cars he sold. “Now government workers and young professionals are easily able to afford cars. The customer base has grown a lot,” he added. Kumar started selling cars three decades ago at what was then Dhanbad’s only dealership. Now there are a dozen.

I began reporting this article by riding along with Chetan Singh Solanki as he journeyed through Madhya Pradesh to spread his mantra of energy self-reliance. After I left him, it was hard not to feel a little guilty about staying in hotels where the rooms were temperature controlled, hot water gushed from showers, and toilets flushed with the force of a miniature cyclone. Such conveniences are unexceptional for travelers in developed countries, but they are only now becoming a part of life for many Indians. When I returned to the United States, I called Solanki to ask if his message to his compatriots about austere living wasn’t overly idealistic and rather unfair when people in affluent nations weren’t being asked to give up their comforts.

He laughed. “If we get into this kind of argument about who needs to reduce consumption first, then doomsday will not be far,” he said. “America could make the counterargument: Fine, we’ll consume less, but your country has too large a population. Why don’t you reduce your number of people?”

His message, though utopian, wasn’t going unnoticed, he insisted. Since we’d met, his foundation had begun offering an online energy literacy program that explains the environmental costs of fossil fuels and suggests ways of reducing one’s carbon footprint. At a recent event, a man who’d taken the course came on stage and announced it had prompted him to cancel plans to buy an air conditioner for his home, Solanki told me. “He said, ‘My wife was angry, but after doing the training herself, she agreed.’ ”

Inspiring this one couple to become more energy conscious seemed admirable—and I’m certain Solanki will persuade others—but I couldn’t help but despair at how puny this accomplishment seemed in the face of the climate crisis. The moral force of his message was undeniable: Boundless consumption is not sustainable even if we unlock new supplies of renewable energy. But will Solanki’s fellow citizens in India, and in the rest of the world, listen?

His hope is that India will lead by example. “I’m going to spread this message in India and see how people take it,” he told me. “Then I’ll take it to other countries.”

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• Secretary-General
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India a ‘Global Superpower’ in Fight against Climate Change, Secretary-General Says at Memorial Lecture, Calls for Shift from Fossil Fuels to Clean Energy

Following are UN Secretary-General António Guterres’ remarks to the nineteenth Darbari Seth Memorial Lecture, “The Rise of Renewables:  Shining a Light on a Sustainable Future”, in New York today:

I am honoured to deliver the nineteenth Darbari Seth Memorial Lecture.  Darbari Seth was a climate action pioneer.  He stressed that India must end its reliance on polluting, financially volatile and costly fossil fuels and instead invest in clean, economically resilient solar power.

Today, as we endure the twin crises of COVID-19 and climate change, this effort has never been more important.  Worldwide, the pandemic has exposed systemic fragilities and inequalities that threaten the basis of sustainable development.  A rapidly heating world threatens even more disruption and exposes even further our world’s deep and damaging imbalances.

Today’s young climate activists understand this.  They understand climate justice.  They know that the countries most affected by climate change have done the least to contribute to it.

As we look to recover from the COVID-19 pandemic, we must commit to doing better.  That means transforming our economic, energy and health systems — to save lives, create stable, inclusive economies and stave off the existential threat of climate change.  I want to talk to you today about how to bring that vision to life — and about India’s role in that vital effort.

India has all the ingredients for exerting the leadership at home and abroad envisioned by Darbari Seth.  The drivers are poverty alleviation and universal energy access — two of India’s top priorities.  Scaling up clean energy, particularly solar, is the recipe for solving both.  Investments in renewable energy, clean transport and energy efficiency during the recovery from the pandemic could extend electricity access to 270 million people worldwide — fully a third of the people that currently lack it.

These same investments could help create 9 million jobs annually over the next three years.  Investments in renewable energy generate three times more jobs than investments in polluting fossil fuels.  With the COVID-19 pandemic threatening to push many people back into poverty, such job creation is an opportunity that can’t be missed.

India is already pushing ahead in this direction.  Since 2015, the number of people working in renewable energy in India has increased five-fold.  Last year, the country’s spending on solar energy surpassed spending on coal-fired power generation for the first time.  India has also made significant progress towards universal access to electricity.

Yet, despite an access rate of 95 per cent, 64 million Indians are still without access today.  There is still work to do, and opportunities to be grasped.  Clean energy and closing the energy access gap are good business.  They are the ticket to growth and prosperity.  Yet, here in India, subsidies for fossil fuels are still some seven times more than subsidies for clean energy.

Continued support for fossil fuels in so many places around the world is deeply troubling.  I have asked all G20 countries, including India, to invest in a clean, green transition as they recover from the COVID-19 pandemic.  This means ending fossil fuel subsidies, placing a price on carbon pollution and committing to no new coal after 2020.

In their domestic stimulus and investment plans in response to COVID-19, countries such as the Republic of Korea, United Kingdom and Germany, as well as the European Union, are speeding up the decarbonization of their economies.  They are shifting from unsustainable fossil fuels to clean and efficient renewables, and investing in energy storage solutions, such as green hydrogen.

And it is not just developed economies stepping up.  Many in the developing world are leading by example — countries such as Nigeria, which has recently reformed its fossil fuel subsidy framework.

While I am encouraged by these positive signals, I am also increasingly concerned about several negative trends.  Recent research on G20 recovery packages shows that twice as much recovery money has been spent on fossil fuels as clean energy.  In some cases, we are seeing countries doubling down on domestic coal and opening up coal auctions.  This strategy will only lead to further economic contraction and damaging health consequences.

We have never had more evidence that pollution from fossil fuels and coal emissions severely damages human health and leads to much higher health‑care system costs.  Outdoor air pollution, largely driven by high-emitting energy and transport sources, leads to damaging pulmonary diseases — asthma, pneumonia and lung cancer.

This year, researchers in the United States concluded that people living in regions with high levels of air pollution are more likely to die from COVID-19.  If fossil fuel emissions were eliminated, overall life expectancy could rise by more than 20 months, avoiding 5.5 million deaths per year worldwide.

Investing in fossil fuels means more deaths and illness and rising health care costs.  It is, simply put, a human disaster and bad economics.

Not least, because the cost of renewables has fallen so much, it is already cheaper to build new renewable energy capacity than to continue operating 39 per cent of the world’s existing coal capacity.  This share of uncompetitive coal plants will rapidly increase to 60 per cent in 2022.

In India, 50 per cent of coal will be uncompetitive in 2022, reaching 85 per cent by 2025.  This is why the world’s largest investors are increasingly abandoning coal.  They see the writing on the wall.  It spells stranded assets and makes no commercial sense.  The coal business is going up in smoke.

The advantages of India’s renewable energy resources are plain to see:  They are low cost, protected from volatile commodities markets, and offer three times the job potential of fossil fuel power plants.  And they can improve air quality at a time when our cities are literally choking.

With its vast size and ecological diversity, India is already experiencing many of the worst impacts of climate change.  Floods and droughts are getting more frequent and severe, causing major damage to food systems, local economies and human health.  India’s recent floods have upended the lives of millions of people.  Climate change hits the most vulnerable hardest, undermining the remarkable progress of economies like India in bringing millions out of poverty.

The Intergovernmental Panel on Climate Change special report on the 1.5˚C goal of the Paris Agreement reveals that if this temperature limit is breached, India will face the brunt of the climate crisis.  The country will endure more intense heatwaves, floods and droughts, increased water stress and reduced food production, all undermining progress towards the Sustainable Development Goals.

Our challenge is urgent and clear.  To limit temperature increase to 1.5˚C, global emissions need to be halved by 2030 and the world will need to be carbon neutral before 2050.

These goals are still achievable.  But, today, the world is at a crucial juncture.  As Governments mobilize trillions of dollars to recover from the COVID‑19 pandemic, their decisions will have climate consequences for decades.  These choices can either propel climate action forward, or set us back years, which science says we cannot afford.

This is why I have urged Governments to take six climate-positive actions to recover better from the pandemic.  Invest in green jobs.  Do not bail out polluting industries.  End fossil-fuel subsidies.  Take climate risks into account in all financial and policy decisions.  Work together.  Most important, leave no one behind.

Like all countries, India is at a crossroad.  And yet, despite the significant challenges the country faces in bringing shared prosperity to its population, it has in many ways embraced clean technology and a sustainable energy future.  I applaud India’s decision to take forward the International Solar Alliance in the form of One Sun, One World, One Grid.  And I commend India’s plans for a World Solar Bank that will mobilize $1 trillion of investments in solar projects over the coming decade.  India itself now has 37 gigawatts of installed solar electricity.  And this is only the beginning.

I am inspired by the Indian Government’s decision to raise its target of renewable energy capacity from the initial 2015 goal of 175 gigawatts to 500 gigawatts by 2030.  I have no doubt this decision will attract more and more international investors, such as the sovereign wealth funds and pension funds like the Caisse de dépôt et placement du Québec or the Abu Dhabi Investment Authority.

India is a pioneer when it comes to driving innovation for access to electricity and on clean cooking.  I call on India and all its innovators, entrepreneurs and business leaders to spearhead the global search for a solution to solar cooking at the household level.  India can be the business hub to achieve Sustainable Development Goal 7.

At the Climate Action Summit last year, India, together with Sweden, launched the Leadership Group for Industry Transition.  This partnership of key public and private sector stakeholders is committed to achieving net‑zero emissions by mid-century in sectors that collectively account for 30 per cent of global emissions.

Companies such as Dalmia Cement and Mahindra are driving innovation.  But, we need many more to join them.  India can become a true global superpower in the fight against climate change, if it speeds up its shift from fossil fuels to renewable energy.  I was inspired to learn that during the pandemic, India’s proportion of renewable energy rose from 17 per cent to 24 per cent while coal‑fired power declined from 76 per cent to 66 per cent.  This promising trend needs to continue.

Renewable energy needs to grow.  And coal use must be phased out.  That must be our story.  A story of smarter, stronger, cleaner economies for the twenty‑first century, creating more jobs, more justice and more prosperity.  It is a story that entrepreneurs and innovators are already telling in India and around the world.

I will continue to urge all countries, especially the G20 countries, to commit to carbon neutrality before 2050 and to submit — well before COP26 — more ambitious nationally determined contributions and long-term strategies that are aligned with the 1.5˚C goal.

I call on Indian leaders to take the decisions, make the investments and adopt the policies necessary to continue this vital journey.  Today is the time for bold leadership on clean energy and climate action.  I call on India to be at the helm of the ambitious leadership we need.

Both the pandemic and the climate crisis have raised fundamental questions about how to ensure the health and well-being of the world’s people and about how nations must cooperate to advance the common good.  Young people, in particular, are looking to all of us to uphold intergenerational solidarity and take bold steps towards sustainability, equality and social justice.  At this pivotal moment, as the United Nations marks its seventy-fifth anniversary, India has a crucial role to play.  Thank you.

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Benjamin Parkin in Bhubaneswar and Chloe Cornish in Mumbai

Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.

Earlier this year, Mahendra Patra took out a Rs1.8mn ($21,600) bank loan to install rows of rooftop solar panels on his three-storey factory on the outskirts of Bhubaneswar, a city in India’s eastern state of Odisha.

Inside the factory, some 30 employees run looms churning out sturdy blue nets for the coastal fishing industry. Since the installation, operations have begun running on solar energy during the day, lowering Patra’s power bills. Sometimes the plant feeds surplus electricity back into the grid.

Patra is something of an outlier in Odisha. The state of 40mn people holds the largest coal reserves in India and the local economy relies on the fossil fuel. Odisha is also geographically unsuitable for solar farms due to its stormy weather, erratic sunlight and dense forests.

But efforts within the state — such as Patra’s panels — encapsulate India’s uphill struggle to wean its fast-growing economy off fossil fuels. Coal accounts for around three-quarters of the nation’s power generation. While per capita energy consumption in the country, the world’s largest by population, is well below the global average, demand is expected to grow more over the coming decade than anywhere else.

Prime Minister Narendra Modi has laid out an ambitious target to build 500 gigawatts of non-fossil fuel capacity by 2030. India has also announced billions in subsidies to manufacture clean-energy technology and wants to become a leading green hydrogen exporter.

Demand for renewables is growing and, in Odisha, the state has launched a series of initiatives designed to capture a sliver of the investment pouring in to the energy transition.

“This is something that is not an option: we have to go for green energy,” says Nikunja Dhal, Odisha’s energy secretary. “Odisha, because of the higher carbon intensity of its economy, needs to be more aggressive . . . We understand that.”

Yet India’s energy transition is complicated by intractable problems, from the difficulty of acquiring land for solar and wind farms to deep financial distress in its power system, which slows new investment. While demand is surging, millions still lack access to reliable electricity. The authorities see the expansion of polluting industries like steel and cement as essential to creating jobs and economic growth.

This means that, even as they invest in renewables, coal-belt states such as Odisha are opening more mines and power stations that will leave India dependent on coal for decades to come.

India’s plans are in focus ahead of the COP28 summit in the UAE in November. India was among multiple countries including China that successfully resisted a plan at the COP summit in 2021 to phase out coal completely, arguing this would jeopardise its energy security. Modi’s government says that it is the responsibility of rich countries who caused the bulk of historic emissions to stop polluting.

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Research group Climate Action Tracker says that while India is “a world leader in new renewable energy”, its targets are not consistent with the sorts of policies needed to limit global warming to 1.5C above pre-industrial levels.

For Indian industry, speeding up the growth of renewables is vital to attracting the vast sums of money starting to flow into green projects around the world.

India “needs to decarbonise to be competitive”, says Jayant Sinha, a member of parliament with the ruling Bharatiya Janata party who represents a coal-producing constituency in Jharkhand. “The whole net zero story hinges on renewables coming up fast enough . . . The issues are well understood, but finding a pathway is very tricky.”

Green gamble

The prospect of India becoming a major green energy producer has prompted a scramble among international investors eager to buy in. Foreign direct investment into non-fossil fuel energy last year rose 40 per cent to $2bn from a year earlier, according to government data. 

Sovereign wealth funds and pension funds have poured billions of dollars into green energy projects, split among both traditional coal power producers such as Tata Power and new generation renewable groups like ReNew and Avaada.

The sums required to convert India’s economy are vast. McKinsey estimates India requires a minimum of $2.5tn in renewable investments to have a hope of achieving its pledge to become a net zero carbon emitter by 2070.

The sheer expense means India risks falling behind its renewable pledges. The authorities this year announced that they planned to more than double the pace of capacity construction to around 50GW a year. The jump is “very, very ambitious”, says Praveer Sinha, managing director of Tata Power. “It’s going to take time.”

Accelerating the transition will require solving problems that have stumped Indian policymakers for decades.

High among them are electoral promises to provide cheap electricity, which have left the largely state-owned power utilities drastically unprofitable. This has led to chronic under-investment in the grid, widespread loss of electricity and frequent blackouts. Utilities are often unable to pay their power suppliers, including renewable companies. As of June last year, there was a Rs1.4tn ($16.8bn) backlog of delayed payments, according to CreditSights, a Fitch-owned credit research company. 

A scheme introduced last year, to force utilities to pay up by imposing additional fines on delayed payments, has shown promise, helping to more than halve outstanding dues.

But one of Modi’s biggest bets, that India can develop a green manufacturing base, is yet to pay off. Under its production-linked incentive subsidy scheme, first introduced in 2020 to spur the manufacturing of products such as electronics or pharmaceuticals, India has begun committing billions of dollars to build solar modules and electric-vehicle batteries.

Vineet Mittal, the chair of green energy group Avaada, which is building a solar panel plant under the programme, says that it could be a “game changer for Indian industry”.

Yet whether it can keep pace with countries such as the US and China is less certain. Production of parts under the scheme has mostly not started yet, and India’s subsidies are dwarfed by those elsewhere. The US, for example, is extending subsidies of around $3 for every kilogramme of green hydrogen that will be produced, according to estimates, compared with less than $1 in India.

Equity investors betting on India’s renewable companies have also had to deal with unwelcome surprises. Adani Green Energy’s share price has dropped 46 per cent this year, following short seller allegations of fraud that the company denies. In a separate incident, shares in another prominent group, Azure Power, are down 79 per cent this year after the company said it found evidence of data “manipulation” and other wrongdoing.

Tata’s Sinha acknowledges that incidents like these have created “challenges” for investors. “There is a concern, and rightly so also, that there are not very many groups or very many companies who will have the type of core competence or the DNA to do such large projects and give returns on a consistent basis,” he says.

Dream of diversification

The building of renewable infrastructure has so far been concentrated overwhelmingly in India’s southern and western states such as Gujarat, a desert region that benefits from both higher solar radiation and ample barren land.

For coal-producing states like Odisha, which are already among the country’s least developed, the prospect of declining fossil fuel use poses an existential threat. Across the mineral belt, coal royalties account for as much as 12 per cent of state revenues and some 25mn livelihoods depend on the industry, according to Rohit Chandra, an assistant professor at the Indian Institute of Technology Delhi who specialises in energy.

“Economic diversification is top of [coal-belt state leaders’] minds,” Chandra says. “To what extent any of this is anchored in anything technologically or economically realistic is another question altogether.”

Preparing revenue-generating alternatives to coal for states such as Odisha is at the heart of calls to enlist multilateral development institutions and investors for a “just” transition that protects vulnerable economies and jobs. “It is important that our brothers and sisters of the global south are not left behind,” Modi said at a G20 event in July.

“As coal production goes down, the renewable [sector] has to go up and we have to rebuild the whole of the power sector — building new power plants, windmills, solar, pump storage,” said Sajjan Jindal, the chair of industrial group JSW.

To help attract investment, Odisha in 2021 sold its lossmaking electricity utility to Tata Power, which committed to invest Rs50bn into transforming the electricity distribution infrastructure, from upgrading the thousands of faulty meters across the state to repairing power lines.

The contentious privatisation, which was criticised by local opposition parties as a selling out of key public goods, has shown some early results. After an unpopular early price increase, the company says that the amount of electricity lost to technical problems or illicit connections has fallen from 28 per cent to 18 per cent, while the frequency of blackouts has reduced.

Sanjay Banga, the head of Tata Power’s distribution business, says that a healthy utility will be the foundation of the state’s energy transition. “If the [utility companies] are not financially sound then the entire [renewable and thermal energy] generation plan is anyway going to be hampered because no one is going to set up a generation plant,” he says.

The share of renewables in the state’s energy mix has slowly been growing. Last year, Odisha signed a power purchase agreement for around 1,000MW of wind power capacity, and non-fossil fuel sources, including pre-existing hydropower projects, now account for around a third of its electricity in its grid. State authorities say they plan to build 10GW of renewable power capacity by 2030. Tata Steel and Avaada also this month announced plans to build a green ammonia plant in the state.

Coal pipeline rumbles on

A few hours’ drive from Odisha’s state capital Bhubaneswar, a drastically different picture of India’s energy ambitions emerges.

In Angul, the state’s mining hub, opencast mines excavate vast quantities of coal every year. Coal dust covers nearby greenery and the roads are frequently clogged by trucks transporting the fuel.

This activity shows no signs of slowing down. iForest, a think-tank which last year proposed an energy transition plan for Angul, estimates that coal production may triple before production peaks in 2033, with several new mines set to open.

India as a whole also has approximately 65GW worth of new coal power plants under construction or being planned, according to non-profit Global Energy Monitor, with three projects approved only this year. This gives India the second-largest new coal pipeline in the world after China and ahead of countries such as Turkey and Indonesia. Companies including Adani Group continue to aggressively invest into the country’s coal sector.

“Right now there’s no other option,” says Prakash Ravidas, a mine supervisor working in a local mine. “We don’t see what the alternative could be . . . Without coal, nothing will work.”

The reality is that even if India meets Modi’s 500GW non-fossil fuel capacity target, renewables are only expected to account for around half of power generation in 2030. With India’s energy demand growing as much as 6 per cent a year, this means India will probably need to consume more coal than it currently does by the end of the decade.

“Will we still be dependent on coal? Yes, we will be,” says Sumant Sinha, the chair of ReNew. “India’s a massive country and growing rapidly . . . [The government] can’t afford to have growth getting stymied on account of lack of power. That’s what they’re struggling with.”

Critics argue that the dramatic fall in the price of renewable energy over the past decade, which can now be cheaper than coal-derived power, should push authorities to be more aggressive in phasing out the fossil fuel.

The biggest obstacle, however, is the lack of power storage. While coal plants can run 24 hours a day, the intermittent supply of solar and wind means it must be stored in batteries in order to provide continuous power.

While India’s National Electricity Plan expects the country will build enough storage by 2027 to avoid adding yet more coal plants to its pipeline, battery technology is prohibitively expensive and authorities are considering new subsidy schemes to bring down prices.

“[For] as long as we don’t have low-cost storage available, we need to have base power, and base power has to come from coal,” says Dhal, Odisha’s energy secretary.

States such as Odisha face more immediate pressures simply keeping the lights on. Ranjita Naik, who lives in a small village in central Odisha, only started getting electricity around a decade ago. The precarious supply, which in the past would cut out for a day or more at a time, is now regular enough for her family to power a TV, fan and a single lightbulb in their brick and thatched-roof house.

The growth in basic amenities like these contributed to the 17 per cent growth in Odisha’s grid power demand in the past year. Managing this demand is becoming harder as the state is buffeted by increasingly violent, cyclonic storms and heatwaves linked to climate change.

It is hard economic realities like these that will ultimately win out over hopes of a swift transition within the state, according to Suravee Nayak, an energy policy researcher based in New Delhi.

“We see the energy transition everywhere in [the Odisha government’s] thinking about future development,” she says. “Until and unless renewables vigorously contribute to energy production in the country . . . we cannot really say that coal is going to be unimportant.”

Data visualisation by Steven Bernard

Letter in response to this article :

Why India’s green energy transition is a success story  /  From Lucy Heintz, Partner, Head of Energy Infrastructure, Actis, London SE1, UK

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New Report Presents India’s Clean Energy Progress as a Model for Cleaner Economic Growth and Recovery Following COVID-19

“India’s Clean Power Revolution” report by BloombergNEF and Bloomberg Philanthropies shows how India has become a thriving clean energy market, and how it can achieve its renewable power target of 450GW by 2030, the most ambitious in the world

  Read the full report here .

NEW YORK AND NEW DELHI   — Today, Bloomberg Philanthropies and BloombergNEF (BNEF) released “India’s Clean Power Revolution,” a new white paper detailing how India has become the world’s largest and most competitive clean energy auction market – and a model country for others looking to leverage low-carbon investments in their Covid-19 economic recovery strategy.

The report outlines how India’s rapid progress in sustainable economic growth and clean energy can be a model for nations looking to recover from the Covid-19 pandemic through the adoption of green stimuli that maximize economic, health, and environmental benefits. Produced in partnership with Bloomberg Philanthropies , the BNEF report builds on Bloomberg’s ongoing commitment to tackle climate change and the air pollution crisis by moving the world to a clean energy economy.

India is currently ranked as the top emerging market for clean energy investment by BNEF’s Climatescope . This reflects the comprehensive set of enabling policies introduced by its government to meet a goal of 450GW clean energy by 2030, its openness to investors, and the volume of renewables auctioned in recent years.

“Governments around the world are working to strengthen national economies after the devastation of the coronavirus. If we act wisely, the response to this crisis can also be a turning point in the battle against the climate crisis,” said Michael Bloomberg, founder of Bloomberg L.P. and Bloomberg Philanthropies. “Investment in clean energy goes hand in hand with economic growth. India is a great example of that, and with its ambitious goals for the years ahead, India’s policies have helped to make it the number one ranked emerging market for clean energy investment.”

In an interview with BNEF, to be released at 16:15pm (IST) today, Shri Raj Kumar, Union Minister of State (Independent Charge), Ministry of Power and Ministry of New and Renewable Energy and Minister of State, Ministry of Skill Development and Entrepreneurship, India , talks about the government’s aim to sharply lift the proportion of India’s electricity that comes from non-fossil fuel sources by 2030: “India pledged in Paris that by 2030, 40% of our installed capacity will be from green sources, non-fossil-fuel based resources. By 2030, the energy from non-fossil-fuel sources will be 55-60%.”

He will also say: “The question before us as a country, and as the world, is whether the environment is important or not, and whether we want to leave behind a livable world for our great grandchildren.”

Launched at the BNEF Summit New Delhi: Strategic Briefing and Dialogue “India’s Clean Power Revolution” outlines how India’s competitive renewables market and ambitious clean power goals are projected to double the share of zero-carbon electricity generated in the country over the next decade. Thanks to the competitiveness of renewables, attaining these goals would save over $78 billion in power system costs and avoid 2,860 million tons of CO2 emissions, improving air quality and reducing respiratory illnesses and early deaths across the country.

The transition represents a $410 billion investment opportunity in new power generation capacity, whilst $223 billion of investment in transmission and distribution infrastructure will be needed to accompany this growth.

India’s success in creating a vibrant clean energy market provides a range of lessons for both developed and developing economies looking to leverage renewables and reduce power procurement costs. Solar and wind have been the cheapest sources of bulk power generation in India since 2018.

“India is hugely important for the world’s economic growth and development, and equally important for global progress in the fight against climate change. This report highlights India’s unique innovations in decarbonization, and the policies it is putting forward as good examples for other countries,” said Jon Moore, CEO of BNEF .

Figure 1:  India’s electricity demand and generation mix, 2010-2030

Source: BloombergNEF’s New Energy Outlook 2019

About Bloomberg Philanthropies Bloomberg Philanthropies invests in more than 570 cities and over 160 countries around the world to ensure better, longer lives for the greatest number of people. The organization focuses on five key areas for creating lasting change: the Arts, Education, Environment, Government Innovation and Public Health. Bloomberg Philanthropies encompasses all of Michael R. Bloomberg’s giving, including his foundation and personal philanthropy as well as Bloomberg Associates, a pro bono consultancy that works in cities around the world. In 2019, Bloomberg Philanthropies distributed $3.3 billion. For more information, please visit  bloomberg.org or follow us on Facebook ,  Instagram ,  YouTube ,  Twitter , and  TikTok .

About BloombergNEF BloombergNEF (BNEF) is a leading provider of primary research on clean energy, advanced transport, digital industry, innovative materials, and commodities. With a team of experts spread across six continents, BNEF leverages the world’s most sophisticated data sets to create clear perspectives and in-depth forecasts that frame the financial, economic and policy implications of industry-transforming trends and technologies. Available online, on mobile and on the Terminal, BNEF is powered by Bloomberg’s global network of 19,000 employees in 176 locations, reporting 5,000 news stories a day.

Visit https://about.bnef.com/  or  request more information .

Media Contacts Daphne Wang Bloomberg Philanthropies +1-646-771-1473 [email protected]

Veronika Henze BloombergNEF +1-646-324-1596 [email protected]

Decarbonising India: Charting a pathway for sustainable growth

At COP26, India announced its ambition to become a net-zero emitter by 2070—an important milestone in the fight against climate change. Despite low per-capita emissions (1.8 tons CO 2 ), India is the third-largest emitter globally, emitting a net 2.9 gigatons of carbon-dioxide equivalent (GtCO 2 e) every year as of 2019. The bulk of these emissions (about 70 percent) are driven by six sectors: power, steel, automotive, aviation, cement, and agriculture.

In this report, we propose more than 100 decarbonisation levers across these key sectors and take a deeper look at four cross-cutting decarbonisation opportunities: green hydrogen; carbon capture, usage, and storage (CCUS); natural climate solutions; and material circularity. We modeled outcomes on India’s net-zero journey along two scenarios: first, the current line-of-sight (LoS) scenario with current (and announced) policies and foreseeable technology adoption; and second, the accelerated scenario with far-reaching polices like carbon pricing and accelerated technology adoption, including technologies like CCUS. Our analysis shows that the benefits of a well-planned, orderly, accelerated transition could outweigh the downsides, given India’s growth outlook.

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Join us for a series of dynamic virtual events during COP28. Discover new research, practical strategies, and collaborations across sectors that propel climate action and growth towards net-zero.

India has the potential to create 287 gigatons of carbon space for the world. This amounts to almost half of the global carbon budget for an even chance at limiting warming to 1.5°C. The current pace of emissions intensity reduction is insufficient for India’s emissions curve to bend with the expected growth outlook. In the LoS scenario, India could reduce annual emissions from a historical trajectory of 11.8 GtCO 2 e to 1.9 GtCO 2 e by 2070, a 90 percent reduction in economic emissions intensity compared with 2019. It can reach 0.4 GtCO 2 e by 2050 in the accelerated scenario (Exhibit 1), with a potential to get to its net-zero-by-2070 commitment through new technology developments (such as direct air capture) over the next few decades.

LoS scenario reductions are challenging, and the accelerated scenario reductions even more so. There are emerging tailwinds in the form of reducing costs of renewables and electric vehicles (EVs), and the progressive policies being implemented (for example, the implicit carbon tax on transportation fuels of $140 to $240/ton CO 2 e) are helping the electrification of mobility. Yet, several other actions with significant scale-up potential are needed (Exhibit 2). For example: renewable capacity addition needs to increase from ten gigawatts (GW) to 40–50 GW per year; a hydrogen cost reduction and carbon price of $50/ton CO 2 is needed by 2030 to make green steel competitive (could lead to 211 metric tons (Mt) of steel capacity being built on the low-carbon hydrogen route instead of the coal route by 2045); battery costs have to decline by 40 percent by 2030 and green hydrogen by two-thirds by 2035; a nationwide rollout of charging infrastructure is needed; farmers have to adopt new practices for rice cultivation; targets for circularity have to be met and higher targets set.

Eight important messages underlie this report. Read and download the executive summary.

There is an urgency to prepare India for an orderly and accelerated decarbonisation within the current decade. Over three-fourths of the India of 2050 (and 80-plus percent of the India of 2070) is yet to be built. Developing this robust infrastructure in India will multiply demand across sectors: power (eightfold), steel (eightfold), cement (threefold), auto (threefold), and food (twofold). If policies are set in place to create the right demand signals within this decade, then India could add low-carbon capacities in the next two decades thereafter. For example, a carbon price of $50 per Mt by 2030 makes green steel competitive (could lead to 211 Mt of steel capacity being built on the low-carbon hydrogen route instead of the coal blast furnace route by 2045).

India benefits from an orderly transition. India’s transition from thermal power to renewables is expected to decrease the average cost of power supply from INR 6.15 per kilowatt-hour (kWh) in financial year 2020 to INR 5.25 per kWh and INR 5.4 per kWh by 2050 in the LoS and accelerated scenarios, respectively (Exhibit 3). 1 Full system cost of power including costs (factoring in reasonable returns and system losses) for generation, transmission, and distribution. The corresponding cost of power generation is INR 3.9 per kilowatt-hour. Sustainable-farming practices could help generate additional farmer income of INR 3,400 per hectare/year in the LoS scenario, which could increase to INR 4,800 per hectare/year in the accelerated scenario. India may save a cumulative $1.7 trillion in the foreign exchange, which may otherwise be spent on energy imports until 2070. In addition, India will have the opportunity to build itself right the first time, minimizing asset stranding. Finally, if India can start manufacturing in newer technologies, it has the potential to be a world leader in batteries, electrolyzers, green steel, and other areas.

Energy system shifts. Fossil fuels, which comprise 75 percent of India’s commercial energy mix today, decline to one-half in the LoS scenario and to one-sixth in the accelerated scenario by 2050 (Exhibit 4). In the accelerated scenario, over 60 percent of India’s refining capacity, 90 percent of its coal mining capacity, and 100 percent of its coal power generation would not be needed. Tax collections from auto fuel could decline to $36 billion by 2050 (from $85 billion currently). Ensuring resources are used appropriately will be vital. For example, the biomass currently being used by households for cooking, and which in future can be used for thermal-power generation, might potentially need to be directed to hard-to-abate sectors like cement.

Pressure on land systems. In the accelerated scenario, growth and decarbonisation combined may require 45 million more hectares of land than is available, of which nearly ten million hectares would be needed for renewable power and eight million for carbon sinks and forests. Innovative land optimization techniques such as maximizing barren land use for renewable power, vertical urbanization, and improved agricultural productivity would be needed to ensure sufficient land for decarbonisation.

Moderate impact on household spending and jobs. A critical consideration is the impact of the accelerated decarbonisation on Indian household spending and jobs. We estimate that by 2040, the increases in housing costs resulting from decarbonisation would, for the most part, be balanced by the limited impact on food costs (excluding impact on yields from direct climate change) and decrease in the costs of energy and transport, assuming an orderly transition. If the transition is disorderly (that is, if the initiatives are carried out at the wrong time or incorrectly), the economically disadvantaged would suffer a more adverse impact. Accelerated decarbonisation could transform over 30 million jobs (24 million new jobs could be created while six million existing jobs could be lost) by 2050. While important, the scale of workforce reallocation may be smaller than that from other macro trends (for example, 60 million new workers entering the workforce by 2030). That said, specific communities (such as coal mining and associated enterprises in Eastern India) could be adversely impacted, requiring support, reskilling, and alternative industrial development in particular areas.

Large funding needed (3.5–6 percent of GDP), frontloaded, but ‘in the money.’ India may need an estimated $7.2 trillion of green investments until 2050 to decarbonise in the LoS scenario and an additional $4.9 trillion in the accelerated scenario. Fifty percent of the investments needed for abatement between the LoS and the accelerated scenario is in the money, particularly across the renewable-energy, auto, and agriculture sectors; other sectors would likely need policy support from the government. The net spend (capex minus opex) will need to be frontloaded. As an illustration, net of operational savings, $1.8 trillion would be needed from 2030–40 and $600 billion from 2040–50 between the LoS and accelerated scenarios.

All stakeholders need to come together and act now to accelerate India’s decarbonisation. The government could provide policy and regulatory support to make projects across sectors economically viable. These could include providing incentives for the use of EVs and fuel cell EVs by balancing taxation, simplifying regulations for authorizing and installing new power and grid installations, creating demand signals for higher-cost green materials like steel, and generating support for localizing electrolyzer manufacturing. Support would also be required to ensure a just transition that minimizes impact on low-income households. These actions need to happen in the right sequence to avoid energy shortages, price increases, and transition disorderliness.

Achieving technological breakthroughs would require consistent public and private investment. It would also require willingness among business leaders and policy makers to adopt new technologies, for example, long-duration storage technologies to capture seasonality of renewable sources, advancement in fuel cell technology, and improvements in recycling technologies.

Against this backdrop, we propose the following ten actions to accelerate India's decarbonisation:

• Lay out a detailed medium-term decarbonisation plan with sector-specific priorities and policy frameworks that account for interdependencies across sectors and provide demand signals to guide corporates to invest.
• Accelerate implementation of a compliance carbon market (within three years). This would also require the creation of demand signals, especially in hard-to-abate sectors, and incentives linked to investments in newer technologies like CCUS.
• Enable banks to support the transition, catalyzed by a green-transition bank. Banks could be asked to come up with their investment glide paths within one to two years and build the necessary capability for assessing risks in these new spaces.
• Accelerate renewable adoption in the power sector to scale up capacity addition by four times and to deepen market reforms with a 30-year outlook in a manner that ensures a stable grid fed predominantly by infirm power.
• Empower a nodal authority to define a national land-use plan. Lay clear land-use guidelines for optimized use across urbanization, industrial needs, carbon sinks, agriculture, and renewables.
• Create a resilient indigenous manufacturing capability and increase investment in cleantech R&D. Efforts would be needed to develop local raw-material resources (such as rare earths), secure materials from elsewhere in the world, and produce equipment locally through mechanisms like production-linked incentive (PLI).
• Evaluate five carbon capture and storage hubs in Gujarat (Jamnagar), Odisha (Paradeep), Rajasthan (Barmer), Maharashtra (Pune), and Andhra Pradesh (Vizag) potentially in public–private partnership for utilization and storage of captured carbon.
• Create a national circularity mission with recycling hubs in the top 20 Indian cities (contributing 35 percent of municipal solid waste), mandated targets on recycling rates, recycled raw-material use (for example, blending norms), and landfill levies.
• Enhance the National Hydrogen Mission with government playing a key role in accelerating demand through blending mandates, boosting cost competitiveness via capital subsidies and R&D investments, and enabling export opportunities via international trade agreements.
• Empower companies to play on the front foot, evaluating investment opportunities that this green trend will unlock, aligned with India’s national plans or opportunities opened up by decarbonisation of other countries (for example, green-hydrogen derivative exports).

India needs to take thoughtful actions now to set itself up for an accelerated and orderly transition. Looking beyond the short term and laying the foundation for this transformation within this next decade is the imperative for a decarbonised India and world.

Rajat Gupta is a senior partner in McKinsey’s Mumbai office, where Divy Malik is an associate partner, and Shirish Sankhe is a senior partner; Naveen Unni is a partner in the Chennai office.

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Renewables Integration in India

About this report, executive summary, india’s demand for energy is growing rapidly.

India is the third largest energy-consuming country in the world. It has become one of the largest sources of energy demand growth globally and has made significant progress towards its universal electrification target for residential users, with 100 million people gaining access in 2018 alone. Per capita electricity consumption across the 28 Indian states and eight union territories is still around a third of the world average, and is expected to continue increasing despite the government’s intention to pursue strong energy efficiency standards, including LED lighting, efficient cooling and building standards. Total Indian electricity demand has begun to expand again following a significant decline in 2020 due to Covid-19. The pandemic has affected the financial viability of the electricity distribution companies (DISCOMs), which were already struggling with mounting debts and a liquidity crunch.

India faces three principal challenges: (1) how to expand reliable energy access and use while maintaining affordability for consumers and financial stability for the DISCOMs; (2) how, at the same time, to integrate increasing shares of renewable energy in a secure and reliable manner; and (3) how to reduce emissions to achieve ambitious social and climate objectives while meeting economic goals.

Growing renewables increasingly challenge the power system

Renewable energy penetration is highly variable by state in India. The share of solar and wind in India’s ten renewables-rich states (Tamil Nadu, Karnataka, Gujarat, Rajasthan, Andhra Pradesh, Maharashtra, Madhya Pradesh, Telangana, Punjab and Kerala) is significantly higher than the national average of 8.2%. Solar and wind account for around 29% of annual electricity generation in Karnataka, 20% in Rajasthan, 18% in Tamil Nadu and 14% in Gujarat (financial year [FY] 2020/21). India’s renewables-rich states already have a higher share of variable renewable energy (VRE) than most countries internationally. As a result, many states are already facing system integration challenges.

Countries and regions in phases of renewables integration, 2019

Furthermore, in the coming decade the Indian power system is due to undergo an even more profound transformation. The government plans to increase renewable generating capacity from 175 GW in 2022 to 450 GW in 2030. Some state leaders have expressed concern that they will face excess VRE generation and the need to: (1) export significantly more power to other states; (2) allow renewables to displace some coal power plants locally; or (3) curtail more solar and wind to ensure system security. Recent trends underlying the main renewables integration challenges include the increasing variability of hourly demand, increasing ramping requirements due to the impact of solar on net demand, short-term frequency variations and local voltage issues.

While the Power System Operation Corporation (POSOCO), a wholly owned public sector undertaking under the Ministry of Power, highlighted that national-level inertia has declined slightly from the 2014 level at certain times, India does not yet face system inertia challenges. However, with future increases in solar and wind power, the renewables-rich states will experience periods when wind and solar make up the majority of generation, and it will then become imperative to monitor local system strength and inertia requirements. The report covers important international experience in managing systems with declining inertia levels.

Indian states should leverage all potential sources of power system flexibility to maximise the value of solar and wind

This report highlights potential sources of power system flexibility in renewables-rich Indian states, including demand-side flexibility, power plant flexibility, storage (pumped-storage hydro and batteries) and grid flexibility, as well as policy, market and regulatory solutions that can be implemented in the short to medium term until 2030. The optimal mix of flexibility resources needs to be determined for each state, taking into account the regional and national context. For example, there are trade-offs between investing in batteries, pumped-storage hydro, demand response and coal power plants that depend upon the existing generation and demand profiles of each system. This report fills a gap in the international literature by focusing on renewables integration in individual states, rather than at the national level in India. It builds on the ongoing power sector stakeholder engagement that the IEA and NITI Aayog have been leading since 2018, including the outcomes of a series of workshops in recent years – one national, four regional and three state level – and the related in-depth analysis. The report also draws on two detailed production cost models developed by the IEA to illustrate flexibility challenges and solutions: a five‑region India Regional Power System Model and a Gujarat State Power System Model. Power system flexibility challenges, solutions and priorities are very different in each state. This report highlights the findings applicable to multiple states in India, and potentially across the globe.

Policy and tariff reforms can tap into demand response potential

Power system transformation in India will be supported by the transformation of electricity demand from passive consumption to more proactive participation by demand sectors. Agricultural users already play an important role in balancing power supply and demand through involuntary irrigation load shifting, and the IEA analysis foresees more active participation from the agricultural sector, buildings (including cooling) and industry by 2030.

The existing agricultural demand shift from high to low demand hours already provides a significant source of low-cost power system flexibility in India, and has assisted some states in reaching high levels of solar and wind penetration without major system events. This shift has been largely enabled by the availability and use of existing distribution networks dedicated to agricultural users in certain states, which allow the system operator to control irrigation loads without impacting other grid users. Looking ahead, transitioning from involuntary agricultural demand shift to proactive agricultural demand response (e.g. active response to a price signal) can be one of the most cost-effective solutions to improve power system flexibility, although its use must be balanced against the potential impact on the water stress of each region. 

Solar generation absorption with limited flexibility, projections for 2030

Solar generation absorption with agricultural demand shift, projections for 2030.

Time-of-day (or time-of-use) tariffs for industry are offered in most states as the basis of the existing industrial demand response incentive. In the medium to longer term, a shift towards time-of-use tariffs as the default option is recommended, following the rollout of advanced metering infrastructure, for the activation of demand response potential from buildings and transport (such as cooling and electric vehicle [EV] smart charging). On the residential side, shifting towards advanced digital metering, automation and smart home appliances is a prerequisite, whilst ensuring cybersecurity and avoiding proprietary standards that could limit interoperability and consumer choice.

Rooftop solar systems need to be monitored and managed

State system operators and DISCOMs are concerned about the rise of rooftop solar systems, due to their impact on DISCOM financial stability (from revenue loss), distribution system issues (from reactive power, voltage impacts and reverse power flows) and demand forecast uncertainty. This report highlights international experiences, illustrating how these can become system-friendly assets and support the low-voltage network with voltage stability and reactive power. To improve the visibility of rooftop solar assets in India, connection codes need to stipulate the registration of individual systems, with state- and national-level registers of these assets. The rooftop solar database should first be built in states. Later, a national-level standardised interface and data model can bring more efficiency and transparency. Requiring all rooftop solar customers to be on time-of-use tariffs can help mitigate the revenue loss suffered by DISCOMs while also balancing the shift in costs between consumers with rooftop solar and consumers without it. Regularly revisiting time-of-use timeslots will be required as rooftop solar additions and demand response reshape the state demand curves. 

New regulatory and policy frameworks can activate more flexibility from storage and power plants

Most states are concerned about the future role of existing coal-fired power plants. Coal plants are expected to operate less as renewable technologies supply more generation, which leads to reduced revenues. At the same time, to operate flexibly and meet stricter emissions standards, some coal plants may also require further investment. Such investment needs to be weighed against investment in flexibility sources in other parts of the system (storage, demand and grids) and emission reduction targets. Government officials are also concerned that historical dependence on long-term power procurement contracts as the tool for ensuring capacity adequacy creates an economic burden by locking in long-term fixed capacity payments to coal power plants.

In the Stated Policies Scenario (STEPS) of the IEA World Energy Outlook (WEO), coal capacity in the Indian power system will increase to 269 GW by 2030 compared to 235 GW in 2019. The analytical results of the IEA India Regional Power System Model show that the use of coal power plants in India will change dramatically by 2030. Use will shift from typically steady baseload operation to frequent operation near minimum and maximum output levels. Coal plants in some states have the potential to better support the integration of high shares of VRE with increased flexibility, such as faster ramp rates, lower technical minimum levels and shorter start-up times. Additional flexibility, however, requires new investment and new compensation designs for these power plants. In contrast to the current tariff structures focused on capacity and energy payments, emphasis should be placed on tariff and market-based compensation for flexibility.

Retrofitting hydropower plants to allow operation in pumped-storage mode seems to be the preferred storage solution in many states in India. However, batteries are also likely to play an important role in India. Analysis by the Lawrence Berkeley National Laboratory suggests that battery storage coupled with solar farms can be a more cost-effective solution than pumped-storage hydro retrofits for morning peaks or evening ramps requiring a storage duration of less than six hours. The optimal sizing and location of battery storage will differ by region and requires detailed studies in each state. 

Changes to wholesale markets and power purchase agreements can remove barriers to interstate trade

The current regulatory and market frameworks present significant gaps and barriers for power system flexibility resources, including demand response, batteries, pumped-storage hydro and power plant flexibility. Comprehensively reviewing and removing the wholesale and retail market barriers to new technologies and creating an equal playing field for all resources is an important ongoing task not only in India, but worldwide.

India’s wholesale power trade achieved important milestones in 2020, with improved trading across Indian states and the introduction of real-time markets and green markets. Since 2020 the real-time market has filled an important gap by providing corrections on an hour ahead timeframe for variable and uncertain generation such as solar and wind. The newly established green market enables clients such as the DISCOMs to fulfil the states’ renewable purchase obligations through market purchases.

Analysis based on the IEA India Regional Power System Model suggests that additional power trading across states is an effective renewables integration solution that could reduce curtailment by around 2.5% in the STEPS in 2030. However, significant barriers remain to reach this potential. These include: (1) the lack of transmission capacity available for interstate trade; (2) the low level of liquidity in wholesale markets; and (3) the inflexible existing contractual structures, namely long-term physical purchase power agreements (PPAs) between the DISCOMs and generators (also contributing to the low liquidity).

States will need to weigh the costs and benefits of potential new transmission investment against the costs and benefits of other flexibility options. In India existing long-term physical PPAs represent about 90‑95% of total generation. The current practice of using these PPAs to meet resource adequacy requirements may not be the most cost-effective tool for achieving resource adequacy. Existing PPAs also pose a barrier to improved power system flexibility from both interstate trade and power plant flexibility. Thus, states could consider creating alternative resource adequacy mechanisms and using financial PPAs. In the longer term, a sophisticated financial market for power sector products could be introduced in India.

Flexibility reduces curtailment, and lower curtailment means reduced system operating costs and lower CO2 emissions

Reduction in curtailment, co2 emissions and operating costs due to combined flexibility options in india and gujarat.

Some level of curtailment is present in most systems with high solar and wind penetration – typically up to 3% of annual solar and wind output.

While renewables have must-run status in India, renewable generators can be curtailed due to system security considerations. For example, states such as Tamil Nadu and Karnataka have seen solar and wind curtailment in recent years.

Increasing solar and wind generation curtailment and lack of related mitigation policies are a major concern, particularly for investors. Power sector investment in India fell by USD 10 billion to USD 39 billion in 2020, including a decline in solar and wind investment, mainly due to the impacts of Covid-19. Improving investor confidence will be important in the coming years as India aspires to attract greater power system investment. To better address curtailment risk, discussions on the future of the must-run status of solar and wind must continue. Formulating practical contractual structures and policies related to compensation for curtailment will be critical.

Increasing power system flexibility enables the integration of higher shares of solar and wind generation. As a result, for a given amount of solar and wind capacity, a larger share of renewables can be utilised. This is illustrated in the two models presented in this report. Lower curtailment also brings about the benefits of reduced system operating costs and lower CO 2 emissions.

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IEA (2021), Renewables Integration in India , IEA, Paris https://www.iea.org/reports/renewables-integration-in-india, Licence: CC BY 4.0

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India can lead the world in solar-based growth. Here's how

The sun is rising on India's future as a renewables powerhouse Image:  Rampal Singh / Unsplash

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• As India's economy and population continue to grow, so too does its demand for energy.
• India is also particularly vulnerable to climate change.
• Solar power could be the answer to both problems. With 300 sunny days a year, India can lead the world in solar capacity.
• Doing so will require strong policy-making and foreign investment – but the rewards will be manifold.

A quarter-century of growth has transformed the lives of millions of Indians and enabled the country to ascend to its rightful place on the global stage. India, now the sixth-largest economy, is projected to climb to third place by the end of the decade.

This rapid growth trajectory also positions India as a testbed of one of the most critical questions facing the environmental movement: can developing nations, which are expected to generate the bulk of global growth in the coming decade, reduce their carbon footprint while fulfilling their economic potential?

India is currently among the top-three nations in energy use, though way down the list on a per-capita basis . Its energy demand will grow the most on the planet over the next 20 years. Interestingly, it is not just economic growth driving this demand. India's population is anticipated to grow by 270 million over the next two decades — resulting in an increased demand for carbon-intensive industries like cement and steel to house the population.

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Innovative investments could decarbonize transport in india. here’s how, this indian solar energy scheme will turn homes into power stations, ‘exceptional new normal’: iea raises growth forecast for wind and solar by another 25%.

India is also very vulnerable to climate change, notably due to the melting of the Himalayan glaciers and changes in the monsoon pattern. For a country aiming to become a $5 trillion economy, the move towards a low-carbon and regenerative economy is an imperative.

Solar salvation

In 2019, India ranked fourth globally in installed renewable power capacity, with solar and wind power leading the way. Prime Minister Narendra Modi has set a goal to generate 450 gigawatts of renewable energy by 2030 – five times the current capacity. If achieved, it also means that India would generate 60% of its electricity from non-fossil fuel sources by 2030, well beyond the 40% target in its Paris pledge.

Solar could be India’s salvation. With around 300 sunny days a year, India has the potential to lead the world in solar electricity, which will be less expensive than existing coal-fired power by 2030, even when paired with battery storage.

This will require the development of utility-scale renewable energy projects with innovative regulatory approaches that encourage pairing solar with other renewable technologies and storage to offer ‘round the clock’ supply. It will also require attracting foreign investment in renewables.

Prime Minister Modi’s call for “high speed, large scale, concrete action” to combat climate change at the recent US-hosted summit and his open invitation to global partners for building sustainable solutions reaffirm India’s interest in nurturing cross-border collaboration and innovation to accelerate climate action.

Up to the challenge

The choices made now and in the coming years by the Indian government and the people will affect the entire world. But the sustainable route won’t be easy or economical. The IEA report says transforming from today’s policy choices to a sustainable-development scenario would require a transition on a scale no country has achieved in history. It would also require considerable innovation, strong partnerships, and vast amounts of capital.

India should be up to the challenge. The nation’s fuel import bills are l ikely to triple in the next two decades under current policies. At the same time, India is seen as an emerging renewables and storage powerhouse and is one of the few countries on track to meet most of its Paris targets. If the country follows a more sustainable path of reducing emissions and increasing its share in non-fossil based fuel for electricity generation, then its bills for importing energy can be reduced substantially, offsetting the investments in renewables.

Of the world's 2,000 largest public companies, at least one-fifth (21%) now have net-zero commitments , representing annual sales of nearly $14 trillion. Even in India, companies have stepped up their climate initiatives. According to the Standard Chartered SDG Investment Map , India alone offers a private investment opportunity of over $700 billion in clean energy. The private sector has a significant role in transforming the core of its business and delivery models and in building collaborative partnerships that will support them in achieving sustainability goals and ensuring inclusive growth for all.

It’s becoming increasingly clear that we are in a period of transformation. It takes bold and decisive leadership to unlock potential, widen the perspective, tune in to broader systemic needs, and ultimately build partnerships that help deliver for the greater good.

India is blessed with an extraordinary reservoir of business and public leadership talent committed to a cleaner and brighter future. The 2030 milestone is a crucial target for private sector investors looking to invest for impact and improve the lives of millions of Indians in the coming decade.

India has shown the world how to lift millions of people out of poverty and provide a better quality of life. With its transition to clean energy, India can become the model for nations around the globe by creating a pathway to sustainable growth, rising prosperity, environmental justice and a clean energy future.

This article is published in collaboration with Hindustan Times . Publication does not imply endorsement of views by the World Economic Forum.

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A diverse mix of renewable energy sources, india’s solar power revolution, key insights.

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Installed hydropower capacity India 2024, by sector

Installed hydropower capacity in India as of February 2024, by sector (in megawatts)

Hydro electricity generation in India 2011-2023

Gross hydro electricity generation in India from financial year 2011 to 2023 (in terawatt-hours)

Hydropower consumption in India 1998-2022

Hydropower consumption in India from 1998 to 2022 (in exajoules)

• Premium Statistic Bioenergy capacity in India 2009-2023
• Premium Statistic Solid biofuels and renewable waste capacity in India 2009-2023
• Premium Statistic Biogas energy capacity in India 2009-2023
• Premium Statistic Number of biogas plants across India 2023 by state
• Premium Statistic Biopower production in India 2010-2022

Bioenergy capacity in India 2009-2023

Bioenergy capacity in India from 2009 to 2023 (in megawatts)

Solid biofuels and renewable waste capacity in India 2009-2023

Solid biofuels and renewable waste capacity in India from 2009 to 2023 (in megawatts)

Biogas energy capacity in India 2009-2023

Biogas energy capacity in India from 2009 to 2023 (in megawatts)

Number of biogas plants across India 2023 by state

Number of biogas plants across India as of March 2023, by state

Biopower production in India 2010-2022

Bioenergy generation in India from 2010 to 2022 (in terawatt-hours)

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Clean and Competitive: How Renewables Can Unlock India's $10 Trillion Potential

India will need to grow at an average rate of 9 per cent to reach $10 trillion by 2030, assuming a stable exchange rate. for this to happen, the government will need to implement a new set of major reforms that will boost the manufacturing sector, cut red tape, loosen land acquisition rules, and reform civil services..

• Updated Jan 24, 2024, 12:21 PM IST

India stands at a crossroads. Its economy is roaring, poised to reach an ambitious $10 trillion mark by 2035, according to the Centre for Economics and Business Research. Even at the ongoing World Economic Forum in Davos, where global elites have gathered, India is making news.

At the high table of capitalism, India continues to make all the right notes, with India-themed pavilions in the majestic Alps and the WEF President, Borge Brende, predicting that in the coming decade, we could be speaking of a 10 trillion-dollar Indian economy.

While India has embarked on its 10 trillion-dollar journey with a strong vision and on a strong footing, a lot still needs to be done. India will need to grow at an average rate of 9 per cent to reach $10 trillion by 2030, assuming a stable exchange rate.

For this to happen, India will need to build on its impressive progress so far and the government will need to implement a new set of major reforms that will boost the manufacturing sector, cut red tape, loosen land acquisition rules, and reform civil services. We will also need to take on a comprehensive de-bottlenecking of implementation hurdles to truly unlock our real potential.

Most importantly, the way forward also requires a fundamental choice: embrace the transformative power of renewable energy or risk being suffocated by the fumes of fossil fuel dependence.

Moreover, India’s 10 trillion-dollar ambitions cannot go to party without renewables taking the centre spot at the table. Renewable Energy has become the non-negotiable of sustainable and rapid growth and fortunately, India is uniquely positioned to lead the charge towards a green future where sustainability and growth go hand in hand.

Our energy transition imperatives will be funded by our growth – not just powering the nation but catalysing industries, making Indian manufacturing globally competitive, saving critical foreign exchange, reducing import costs and

increasing energy security. All of which are fundamental to spurring on the economy.

India's Renewable Renaissance:

• Ambitious target: 500 GW of non-fossil fuel capacity by 2030 translates into billions of dollars in investment, not only in green energy generation but also in economic growth and creation of more than 3 million additional long-term domestic jobs.

• Global Green Leadership: India has the potential to become a global leader in wind energy, solar energy, green hydrogen, and other low-carbon technologies. These and other low-carbon technologies could create a market worth up to $80 billion in India by 2030, putting us at the forefront of clean energy innovation and exports.

Transformational impact:

• Climate choices matter: As a country of more than 1.35 billion, India's determination to adapt and mitigate its impacts has the potential to transform not only our future but also the fate of the planet.

• Cost advantage, competitive advantage: Technological advances have tipped the scales in favour of clean energy. Renewables have reached grid parity and often outperform traditional sources in cost. This transition to sustainable energy enables India to compete effectively in global markets and offer products and services at cost-effective prices.

• Catalysing economy, attracting investment: India needs substantial investment to generate 500 GW of renewable energy. It is estimated that around $1.3 trillion will be invested between 2020 and 2030, averaging around $130 billion of investment every year across generation, transmission, distribution and allied sectors, which will have a massive multiplier effect on the overall economy.

• Dependable partner to the world: India is particularly well-placed to become a global leader in manufacturing renewable energy equipment and components, green hydrogen and related molecules. We already boast a thriving wind energy manufacturing ecosystem and are building our solar value chain as well. The Indian economy has always flourished in its manufacturing prowess. Renewables not only make us globally competitive manufacturers overall but also offer a unique sectoral advantage.

Engines of green growth:

• Prime Minister Modi's vision: Renewables are not just an environmental necessity, but the fuel for India's growth engine. As our energy needs rise, wind and solar offer an abundance of clean energy, powering our factories, lighting our homes and driving us to economic prosperity.

• Beyond the carbon footprint: The ESG framework entices and challenges businesses to embrace responsible growth. Sustainability attracts discerning customers, empowers responsible employees and secures investment from climate-conscious stakeholders. Moreover, renewables are no longer a premium fuel; are the most cost-effective option, increasing competitiveness and profitability.

• Towards more inclusive sustainable growth: The world is reeling under the impact of increased imbalance – the widening gulf between the rich and the poor and the sheer explosion of vulnerable populations. Decentralised and utility-scale renewables are the only way for equitable and inclusive growth to ensure that the national growth trickles down right to the bottom of the pyramid.

The choice is clear:

India's $10 trillion dream is within reach, but the path it chooses will define its legacy. By embracing renewables, India can secure a future where economic prosperity and environmental responsibility flourish hand in hand. This is not just a green dream, it is a pragmatic, profitable, and sustainable reality waiting to be built.

Will India lead the charge towards a green tomorrow? The world waits with bated breath as the discussion at Davos today centres around, “Can India Seize Its Moment?”

Girish Tanti is the Vice Chairman, Suzlon Group  

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• India’s Tryst To Become A Solar Superpower: Resolution Unveiled

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• Published On May 21, 2024 at 03:48 PM IST

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Environment, the present perspective of the indian energy sector.

Manuel Freire-Garabal y Núnez

H.E. Prof. Sir Manuel Freire-Garabal y Núñez is a lawyer and journalist. He is a professor, contributor and advisor at different universities, particularly at the IVY League . He serves in diplomacy as advisor to United Nations higher officials and as a member of the diplomatic staff of several governments. He has received high honours from Russian Federation, United States or Peru. LESS ... MORE

India is seeing substantial expansion in its energy industry, fueled by a combination of traditional and renewable energy initiatives aimed at satisfying the country’s increasing demand and sustainable development objectives.

The Indian government has been aggressively advocating energy projects to guarantee energy security, mitigate carbon emissions, and cultivate economic growth.

India’s renewable energy sector, namely in solar and wind, has had significant and rapid expansion in the last ten years. The nation has established lofty objectives, which include attaining a renewable energy capacity of 175 GW by 2022 and 450 GW by 2030.

The development of solar electricity has been a significant area of attention, with the successful establishment of large-scale solar parks such as the Pavagada solar park in Karnataka and the Bhadla solar park in Rajasthan.

These initiatives not only generate renewable energy but also facilitate the creation of employment opportunities and promote local economic growth. Wind energy is a key part of India’s renewable energy portfolio.

The government has provided support for wind projects through many schemes and incentives, leading to the development of major wind farms in states such as Tamil Nadu, Gujarat, and Maharashtra.

In addition, India is currently investigating the possibility of offshore wind energy in order to further expand its portfolio of renewable energy sources. Although there is a strong emphasis on renewable energy, traditional energy sources still make up a substantial amount of India’s energy combination.

Coal is a prominent and influential source of energy, with a multitude of coal-fired power stations in operation around the nation. Nevertheless, the government is also prioritising the development of cleaner coal technologies, specifically supercritical and ultra-supercritical technology, to enhance efficiency and minimise emissions. There are multiple projects underway to enhance the gas infrastructure in the country, indicating an important subject on natural gas.

The Pradhan Mantri Urja Ganga project is a commendable endeavour aimed at establishing a comprehensive gas pipeline network throughout Eastern India, thereby improving energy availability and encouraging the adoption of cleaner fuel sources. India’s energy diversification and carbon emissions reduction strategy heavily relies on nuclear energy as an essential aspect.

The nation now possesses multiple functioning nuclear power facilities and intends to considerably expand its nuclear capabilities in the near future.

The spread of nuclear power in India relies heavily on projects such as the Kudankulam Nuclear power plant in Tamil Nadu and the forthcoming Kovvada plant in Andhra Pradesh.

Hydropower continues to be a conventional yet essential piece of India’s energy infrastructure. The government has been actively engaged in augmenting hydroelectric capacity through initiatives such as the Subansiri lower dam and the Teesta low dam projects, which are making important contributions to the country’s energy portfolio.

In addition, there is a renewed emphasis on the development of small hydropower projects to exploit the potential of India’s river systems. India’s energy initiatives are facilitated by robust policy support and investor incentives.

The national solar mission, wind mission, and green energy corridors project aim to facilitate the integration of renewable energy sources and provide stability in the power system. In addition, the government has been actively promoting foreign direct investment (FDI) in the energy sector, which has resulted in the attraction of major international companies and the promotion of technological progress.

India’s energy project development is distinguished by a judicious strategy, incorporating both renewable and conventional energy sources to guarantee a dependable, environmentally-friendly, and cost-effective energy provision.

India is poised to become a prominent worldwide player in energy production and sustainability, thanks to ongoing legislative support, technology advancements, and increased investment.

Academia states that the India energy sector is now complex and has a strong emphasis on generating renewable energy, reducing emissions, and achieving sustainable development goals. India has established ambitious objectives to enhance the generation of renewable energy, with a target of reaching 175 gigawatts by 2022, as outlined in the research conducted by Kiesecker et al. in their publication “Renewable energy and land use in India: a vision to facilitate sustainable development” in 2019.

The transition to renewable energy sources is necessary for the process of decarbonising the energy sector and mitigating CO2 emissions, as shown in the study conducted by Sinha & Shahbaz (“Estimation of environmental kuznets curve for co2 emission: role of renewable energy generation in India” published in Renewable Energy, 2018).

In order to accomplish these objectives, a significant amount of funding is expected to be allocated towards the electricity system. This investment is necessary to accommodate the projected growth in renewable energy capacity, as outlined by Giannelos et al. in their publication “Long-term expansion planning of the transmission network in India under multi-dimensional uncertainty” in Energies (2021).

Policy is of utmost importance in determining the trajectory of India’s energy future. The government has implemented a range of policies aimed at restructuring and reducing regulations in the energy sector. These policies include measures to encourage foreign investment and privatisation, as stated in the research article “Energy scenario in South Asia: analytical assessment and policy implications” by Ul-Haq et al., published in IEEE Access in 2020.

In addition, the government plays an active role in power sector planning through bodies such as the Central Electricity Authority, as described by Das & Srikanth in their publication “Viability of power distribution in India – challenges and way forward” in Energy Policy (2020).

The national electricity policy and pricing policy are formulated in collaboration with state governments to maximise the efficient use of resources and encourage the adoption of renewable energy sources, as discussed by Das & Srikanth.

India’s shift towards a low-carbon economy necessitates tackling obstacles and optimising policy-making processes. The country must assess the consequences of sector-specific policies and take a comprehensive approach to meet its obligations under the Paris Climate Agreement.

This approach, as described by authors Rehman & Hussain in their article “Renewable energy governance in India: challenges and prospects for achieving the 2022 energy goals” published in the Journal of Resources Energy and Development in 2018, and Singh et al. in their article “Evaluating India’s climate targets: the implications of economy-wide and sector-specific policies” published in Climate Change Economics in 2019.

Moreover, IMRAN et al. (2021) argue that entrepreneurship plays a crucial role in the solar energy sector of India, leading with significant advancements in both on-grid and off-grid segments.

The energy composition in India is changing, with a specific emphasis on augmenting the proportion of renewable energy sources such as wind and solar power.

This viewpoint is supported by various authors, including Elavarasan et al. in their publication “A holistic review of the present and future drivers of the renewable energy mix in Maharashtra, State of India” (2020) and Rej & Nag in their publication “Land and clean energy trade-off: estimating India’s future land requirement to fulfil indc commitment” (2021) in the International Journal of Energy Sector Management.

According to Ali et al.’s study “Projected increase in hydropower production in India under climate change” published in Scientific Reports (2018), hydropower is expected to have significant effects on satisfying energy needs and reducing the effects of climate change.

Nevertheless, coal continues to play an essential role in India’s power industry, emphasising the necessity of shifting towards more environmentally friendly technologies, as outlined by Sahu et al. in their publication “The role of coal technology in redefining India’s climate change agents and other pollutants” in Environmental Research Letters, 2017.

India’s energy sector is currently transitioning towards sustainability, with a particular focus on renewable energy, regulatory reforms, and fulfilling international climate obligations. The nation’s energy trajectory relies on efficient strategizing, financial commitment, and the implementation of more environmentally friendly technologies in order to attain a carbon-neutral economy.

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Enfinity Global enters into $135M financing to build 1.2 GW of advanced solar and wind power plants in India

M IAMI, May 16, 2024 PRNewswire -- Enfinity Global Inc., a leader in renewable energy, today announced that it has signed $135 million in financing for the development and construction of 1.2 GW of solar and wind projects in India. The financing is being provided by Canada Pension Plan Investment Board (CPP Investments) through subsidiaries of CPPIB Credit Investments Inc.

Enfinity Global operational solar power plant in India The projects in this portfolio, spread across five states (Maharashtra, Delhi, Karnataka, Rajasthan and Uttar Pradesh), are in advanced stages of development and are expected to be commissioned between 2025 and 2026. Once interconnected, they are projected to generate 2.4 GWh of clean electricity annually, enough to power over two million Indian homes and offset 2.6 million tons of CO2 emissions.

"Renewable energy is at the core of India's economic growth plans as a key driver of competitiveness. Enfinity Global is delighted to partner with CPP Investments, one of the most respected global investors, in bringing clean energy to power India's future," said Carlos Domenech, CEO of Enfinity Global.

"Solar and wind power are two vital renewable energy sources and India offers a strong pipeline for such opportunities. We are pleased to partner with Enfinity Global on these projects by providing long-term and flexible capital that we believe will provide a promising source of long-term returns for the CPP Fund", said Geoffrey Souter, Managing Director, Head of Real Assets Credit at CPP Investments.

This financing reiterates Enfinity's long-term commitment to India and its ability to attract foreign capital and promote local know-how to support national decarbonization targets. The company owns and operates a portfolio of 240 MW solar plants in India, with over 1.5 GWs under development. Over the next 3 years, Enfinity plans to develop and commission renewable power plants to supply over 5 GWh of clean electricity annually, including through Power Purchase Agreements (PPAs). Enfinity also intends to diversify its business to deliver other net-zero solutions for the Indian and global market through energy storage, hybrid renewable energy production, green ammonia, water treatment, and other emerging circular economy technologies.

About Enfinity Global

Enfinity Global Inc., together with its subsidiaries, is a US-based leading renewable energy and sustainability services company established in 2019. The company owns a portfolio of 22.4 GW of renewable energy and storage projects, including operational assets, under construction, and in different stages of development. With offices across US, Europe, Japan, and India, the company aims to make a significant contribution to a sustainable net zero carbon economy. Enfinity's leadership team is one of the most experienced global teams in renewables and brings over $37 billion of financing experience in the renewable energy sector with over 15 GW of developed and acquired solar and wind assets.

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