India's renewable growth rate accelerating faster

When it comes to the energy sector, more particularly renewable energy space, India certainly has more things than one to cheer about. The present dispensation had decided that the country would have universal access and it has already connected nearly 28.9 million homes in just 19 months. Today the availability of power in rural India is 22.5 to 23 hours on an average. This has actually been brought up from about 12 hours, which certainly is a huge transformation in this sector, by any stretch of imagination.

Going by the facts and figures given by the Union Minister of Power, New & Renewable Energy, RK Singh recently, India's per capita emissions are among the lowest in the world. If one looks at the total carbon load which accounts for global warming, India's contribution to the total CO2 load till date is just 3.4 per cent and its population is 17.7 per cent. Interestingly, despite all this India decided that its environment is important and set ourselves huge targets. Accordingly, India had committed in COP21 in Paris, that in 2030, 40 per cent of India's capacity will come from non-fossil fuels and India has already reached 41.5 per cent of that 9 years in advance. Another target India has set itself for is to reduce the emission intensity of the Indian economy by 33-35 per cent by 2030. And the minister said that India has already reduced the emission intensity of the Indian economy by 30 per cent. At this rate, India is expected to cross the target of having 50 per cent of its capacity from non-fossil fuels before 2030. And India will remain the fastest growing market for renewables in the world.

With such an ambitious target, the need for cash inflow into the sector assumes greater significance. It is estimated that India would need an annual investment of $19.72 billion (Rs 1.5 trillion) - $26.29 billion (Rs 2 trillion) in the renewable energy sector until 2030.

And the good thing is, going by a recent Mercom Consulting (Clean Energy Insights) study, India's renewable energy sector is fast turning into an attractive destination for investors. The cumulative FDI inflow into the renewable energy sector stood at $11.75 billion (Rs 889.29 billion) from April, 2010 to June, 2022. Foreign investments of upto 100 per cent are allowed under the automatic route, with no prior approvals required. Simultaneously with this, one also has to keep in mind that there has been no FDI in coal production after 2013-14, while investments in petroleum and natural gas have been stable. The FDI in the petroleum and natural gas segment stood at $3.19 million (Rs 254 million) in Q1 FY 2023, while for the power sector, the FDI was $509 (Rs 40,506).

India now aims to become a net zero economy by 2070 and has set a target of installing a non-fossil energy capacity of 500 GW by 2030. India's transition towards a net zero economy can contribute over $1 trillion (Rs 79.72 trillion) by 2030 and nearly $15 trillion (Rs 1195.8 trillion) by 2070 in economic impact. The transition to a low-carbon energy regime has the potential to account for $5 trillion (Rs 398.61 trillion) - $7 trillion (Rs 558.05 trillion) worth of economic activity. Lot of positive energy is getting generated out of India's energy sector, for sure!