Why Is Renewable Energy Investment Surging in India?

Growth of Renewable Energy Investments in India

Investment in electricity generation in India has rebounded from its slump during the COVID-19 pandemic, with 15.5 gigawatts (GW) of renewable energy capacity – representing an investment of a record US$14.5 billion – added in the past financial year. The majority of the money flowed through acquisitions, which accounted for 42% of the total investment in FY2021/22. The largest deal was SB Energy’s exit from the Indian renewables sector in October 2021 with a sale of assets worth US$3.5 billion. Investment in renewables increased by 125% over FY2020/21 and 72% over pre-pandemic FY2019/20. However, investment in renewables would need to more than double to about US$30-40 billion per year for India to reach its target of 450GW of renewable energy capacity by 2030. Investment in the renewable energy sector is driven by the rapid economic growth and increasing energy demand in India.

Key Takeaways:

  • Growth of Renewable Energy Investments in India has rebounded after the COVID-19 pandemic.
  • 15.5 GW of renewable energy capacity was added in the past financial year, representing a record US$14.5 billion investment.
  • Acquisitions accounted for 42% of the total investment, with SB Energy’s exit being the largest deal at US$3.5 billion.
  • Investment in renewables increased by 125% over FY2020/21 and 72% over pre-pandemic FY2019/20.
  • India needs more than double the current investment to reach its target of 450GW of renewable energy capacity by 2030.

India’s Commitment to Renewable Energy

India is firmly committed to transforming its energy sector and increasing the share of renewable energy in its energy mix. The country has set ambitious goals to achieve 450 GW of renewable energy capacity by 2030, signaling its strong commitment to sustainable development and reducing greenhouse gas emissions. This commitment is driven by the need to meet the increasing energy demand and the rapid economic growth experienced by India.

The non-conventional energy sector in India has already made significant progress, with a remarkable 250% increase in renewable energy capacity between 2014 and 2021. Currently, renewable energy accounts for about 42.26% of the country’s total installed generation capacity, which stands at 408.71 GW. These figures highlight the substantial strides India has made towards achieving its renewable energy goals.

To support the growth of renewable energy, the Indian government has implemented various policies and initiatives. For instance, it allows for 100% foreign direct investment in the renewable energy sector, attracting international investors to contribute to the country’s clean energy transition. Additionally, inter-state transmission system charges for the sale of solar and wind power have been waived, further incentivizing the adoption of renewable energy sources.

“India’s commitment to renewable energy demonstrates its dedication to sustainable development and reducing its carbon footprint. The country’s ambitious goals and supportive policies create an encouraging environment for both domestic and international investments in the renewable energy sector.”

India’s Sustainable Development Initiatives

In addition to its renewable energy targets, India has also taken significant steps towards sustainable development and reducing its environmental impact. The National Action Plan on Climate Change is a comprehensive strategy that outlines various measures to address climate change and promote sustainable practices across sectors. This plan includes initiatives such as energy efficiency programs, waste management systems, and afforestation projects.

One of the notable sustainable development initiatives in India is the UJALA LED bulb campaign. This nationwide program aims to promote energy-efficient lighting by distributing affordable LED bulbs to households. By replacing traditional incandescent bulbs with LED bulbs, energy consumption is reduced, leading to significant energy savings and a lower carbon footprint.

India’s commitment to renewable energy and sustainable development showcases its dedication to building a greener future. With ongoing investments, supportive policies, and innovative initiatives, India is emerging as a global leader in the transition to clean and sustainable energy sources.

India’s Renewable Energy GoalsSustainable Development Initiatives
450 GW of renewable energy capacity by 2030National Action Plan on Climate Change
250% increase in renewable energy capacity between 2014 and 2021UJALA LED bulb campaign
42.26% of total installed generation capacityEnergy efficiency programs
100% foreign direct investment in renewable energy sectorWaste management systems

Global Trends in Renewable Energy Investment

Investment in clean energy technologies is on the rise worldwide, with a significant shift towards sustainable and renewable energy sources. In fact, it is projected that around USD 2.8 trillion will be invested in energy by 2023, and more than USD 1.7 trillion of this will be dedicated to clean technologies, including renewables and electric vehicles.

This surge in clean energy investment is expected to continue, with annual investment predicted to increase by 24% between 2021 and 2023. This growth is primarily driven by the rapid advancements in renewable energy and electric vehicle technologies. However, it is important to note that more than 90% of this increase is coming from advanced economies and China. This highlights the urgency for other nations to accelerate their clean energy transitions in order to avoid global energy disparities.

While clean energy investment is on the rise, there is still a significant shortfall in emerging and developing economies. These regions require greater support and investment to drive their transition towards clean energy. By focusing on providing the necessary resources and financial incentives, we can ensure a more balanced and sustainable global energy landscape.

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