Reviewing India's Booming Renewable Energy Sector

Let me tell you a joke.

Once a common man got a chance to interview a politician. He asked the minister, "Sir, why are the prices of petrol and CNG constantly rising? We the common people of India are devastated in this inflation."

The politician chuckled and replied with a smile, "Mister, we as a nation, are moving towards renewable energy sector. Hence, to encourage people to use electric vehicles we are hiking up the cost of these petroleum products and fossil fuels."

Jokes apart, generation of renewable energy is flourishing at a supersonic speed in India, considering both its environmental and economical advantages over the usage of fossil fuels.

If I quote my exact words from the previous blog, I had said, "I will make a separate blog on India's resolutions and achievements in SDGs (Sustainable Development Goals).The role of India in this whole matter and its future expectations are very important for its economic and political position in the world."

Thus today we will anaylse the Renewable Energy Sector of India from top to bottom.

Here let us first explore India's Renewable Energy Sector based on the data that I've gathered from the India Brand Equity Foundation.

India witnessed the fastest growth rate in renewable energy capacity addition among all major economies in the last 7.5 years with renewable energy capacity growing 1.97x and solar energy 18x.

1. Robust Demand of this sector

India is famous for its resolutions in the COPs (Conference of Parties) on Climate Action organised by United Nations. The powerful presence of this industry can very easily sensed in even share market.

In June 2021, Prime Minister Narendra Modi stated that renewable energy capacity in India increased by 250% between 2014 and 2021.

The Central Electricity Authority estimates India's power requirement to grow to reach 817 GW by 2030. Most of the demand will come from real estate and transport sectors.

2. Increasing Investments in this sector

Non-conventional energy sector received FDI inflow of US$11.21 billion between April 2000 and December 2021.

Rising foreign investment in the renewable sector (such as the US$ 75 billion investment from the UAE) is expected to promote further investments in the country.

3. Policy Support

In the Union Budget 2022-23, the government allocated Rs. 19,500 crore (US$ 2.57 billion) for a PLI scheme to boost manufacturing of high efficiency solar modules.

In June 2021, India launched the Mission Innovation CleanTech Exchange, a global initiative that will accelerate clean energy innovation among countries.

4. Competitive Advantage

Globally, India ranks fourth in renewable energy capacity and wind power and fifth in solar power capacity.

In October 2021, India retained its third rank on the EY Renewable Energy Country Attractive Index 2021.

5. Road Ahead

The Government is committed to increased use of clean energy sources and is already undertaking various large-scale sustainable power projects and promoting green energy heavily. In addition, renewable energy has the potential to create many employment opportunities at all levels, especially in rural areas. India’s renewable energy sector is expected to attract investment worth US$ 80 billion in the next four years. About 5,000 compressed biogas plants will be set up across India by 2023.

In 2022, India's renewable energy sector is expected to boom with a likely investment of US$ 15 billion this year, as the government focuses on electric vehicles, green hydrogen, and manufacturing of solar equipment.

It is expected that by 2040, around 49% of the total electricity will be generated by renewable energy as more efficient batteries will be used to store electricity, which will further cut the solar energy cost by 66% as compared to the current cost. Use of renewables in place of coal will save India Rs. 54,000 crore (US$ 8.43 billion) annually.

As per the Central Electricity Authority (CEA) estimates, by 2029-30, the share of renewable energy generation would increase from 18% to 44%, while that of thermal is expected to reduce from 78% to 52%.

The Government of India wants to develop a ‘green city’ in every state of the country, powered by renewable energy. The ‘green city’ will mainstream environment-friendly power through solar rooftop systems on all its houses, solar parks on the city’s outskirts, waste to energy plants and electric mobility-enabled public transport systems.

To conclude this blog, let us finally decode the National Statement of PM Modi at the recent COP26 Summit in Glasgow, UK.

Following are the resolutions and achivements of India in this sector as stated by Shri Narendra Modi :-

- Today, India ranks 4th in the world in installed renewable energy capacity. India's non-fossil fuel energy has increased by more than 25% in the last 7 years and now it has reached 40% of our energy mix.

- Despite being 17 % of the world's population, whose responsibility has been only 5 percent in emissions, it has left no stone unturned to show that it has fulfilled its obligation.

- Every year more passengers travel by Indian Railways than the population of the world. This huge railway system has set a target of making itself 'Net Zero' by 2030.This initiative alone will lead to a reduction of emissions by 60 million tonnes annually. Similarly, our massive LED bulb campaign is reducing emissions by 40 million tonnes annually. Today, India is working at a faster pace on many such initiatives with a strong will.

- Along with this, India has also given institutional solutions to cooperate with the world at the international level. As a revolutionary step in solar power, we initiated the initiative of International Solar Alliance.

At the end of Modi's speech, he presented India's 5 ways to contribute to clean energy and lesser carbon footprints in the following way:-

"In the midst of this global brainstorming on climate change, on behalf of India, I would like to present five nectar elements, ‘Panchamrit’, to deal with this challenge.

- First- India will take its non-fossil energy capacity to 500 GW by 2030.

- Second- India will meet 50 percent of its energy requirements from renewable energy by 2030.

- Third- India will reduce the total projected carbon emissions by one billion tonnes from now till 2030.

- Fourth- By 2030, India will reduce the carbon intensity of its economy by more than 45 percent.

-And fifth- by the year 2070, India will achieve the target of Net Zero.

These ‘Panchamrits’ will be an unprecedented contribution of India to climate action."

Closing his address, he referred to an age-old hypocrisy of developed countries of leading the world in overall development with the support of ruthless usage of fossil fuels, advising poor and developing countries to give up fossil fuels for their turtle development.

He said, "India expects developed countries to provide climate finance of $1 trillion at the earliest."

For me it was a savage moment from his side, mocking the developed countries! Well we definately need collective efforts from every country in this but this is how developed countries can truly help developing countries participate in contributing its share to climate action, that is, by helping financially.

Now here we end, analysing a prospective sector of not only Indian society but of the whole of the humankind. To know its significance, read this blog - The Story of Sustainable Development.

“The greatest threat to our planet is the belief that someone else will save it.”

- Robert Swan

Thanks,

Daksh Parekh.