- Solar energy contributing about 91 GW.
- Hydro-based power accounting for 52 GW.
- Wind energy generating 47 GW.
These numbers indicate a marked improvement in India’s shift away from its traditional reliance on fossil fuel-based energy sources. For its part, the Government of India has implemented a series of initiatives to achieve its truly ambitious target of achieving 500 GW of electric capacity from non-fossil sources by 2030. Key programs include:
- The National Green Hydrogen Mission – targeted initiatives for energy generation
- based on improved Hydrogen production.
- PM KUSUM – attempt at ‘de-dieselization’ of the Indian agricultural sector with
- Incentives to farmers to adopt solar based irrigation equipment.
- PM Surya Ghar – scheme to subsidize households for installing solar panels.
- Production Linked Incentive Schemes for Solar PV modules.
- Green Energy Corridors – project to integrate and connect wind and solar power sources with India’s national power grid.
Another major ‘Sustainability’ initiative launched by the Government (in 2015) was the Smart Cities Mission (SCM), which was targeted at improving and urbanizing the lives of resident of 100 selected cities. The endeavour was to:
- Promote inclusive and sustainable urban development.
- Provide access to adequate water & electricity supply.
- Afford urban mobility & efficient public transport system.
- Leverage technology to improve lives.\
As per a recent update from the Government bureau, more than 90% of the total project undertaken under the SCM banner have been completed, with the balance 10% expected to be finished by March 2025. The total project investment outlay for SSM projects has been about 20 billion dollars.
It was only a matter of time till India also caught up with the global ‘Electronic Vehicle’ phenomenon.
- In 2022, India surpassed Germany to become the 4th largest global automotive market. It now plans to transition 30% of its vehicles to ‘electric’ based by 2030.
- Under a key policy announcement in March this year, an automaker investing at least $500 million to manufacture EVs in India (with the caveat of sourcing 50% of components locally), will be entitled to reduce its import taxes from (as high as) 100% to 15% for up to 8,000 electric cars manufactured per year.
- In May of this year, electric vehicle sales in India increased by 20.88% to clock about 1.4 million units. Further, the Indian EV market is forecasted to expand from 3.2 billion dollars in 2022 to about 114 billion dollars by 2029 (as per IBEF and Fortune Business Insights).
If all (or even most) the above ambitions and goals are to be realized for India, it will require significant investments dollars (or rupees). There is a clear long-term opportunity across different spectrums – energy storage, transmission, EVs, charging infrastructure and urban waste management. Capital raising has continued unabated from different sources, local and global.
- It is estimated that around 75 billion^ dollars have been invested in Indian renewables, with more than half coming from global investors such as Macquarie, KKR, BII, ADIA and GIC.
- About 1.2 billion dollars’ worth of green bonds were made available for potential inclusion in JP Morgan’s EM Debt Index.
- In September this year, India secured about 387 billion dollars’ worth of renewable energy investment pledges by 2030 from Banks, Developers and States.
- Shares of the renewable arm of NTPC (India’s top power producer) raised about USD 1.2 billion dollars at its recent public offering – the share rose by 13% on listing.
- Ford is now in talks to setup facilities in the southern state of Tamil Nadu in India – this is likely for manufacturing EVs. Ford joins Tata Motors and Vietnam based VinFast Auto as some of the latest entrants to setup manufacturing plants in the region.
India has committed to reach to Net Zero by 2070, meet 50% of its energy needs from renewal sources by 2030 and reduce its emission intensity by 45% by 2030 (based on 2005 levels). As per a recent EY report, it is envisaged that India will need about 10 trillion dollars to achieve its 2070 goal. There is likely to be a 30-40% shortfall to this number, should the government rely largely on conventional financing means. This opens up a large opportunity for international funds to tap into the India ‘Sustainability’ story, be it through Foreign Direct or Portfolio Investments, Strategic Partnerships, Green Bonds or Venture Funds & Private Equity.
* GigaWatt
(Source: asiafinancial, REN21 global status report, Press Information Bureau of India, The Hindu, ^OMFIF, Bloomberg, Economic Times, Reuters, IBEF, Fortune Business Insights, EY)
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