The Economic Survey 2019 was presented in Parliament last week. It said that the country’s upcoming green economy will require additional investments of around US $80 billion till 2022, growing to US $250 billion during 2023-2030.
On an annualised basis, investment opportunities for over US $30 billion every year are expected to come up for the next decade and beyond, it said.
As a part of its climate commitments, India plans to raise its renewable energy capacity to 500 GW, or 40% of total capacity, by 2030. Renewables currently account for 22% of India’s total installed capacity of about 357 GW.
Although on track for its 2030 target, the fiscal year 2018-2019 was weak for both the thermal and renewable sectors in terms of increased generation capacity. In total, only 12 GW of net new power generation capacity was added; compared to an average of 22 GW added between FY 2012-2013 and 17 GW in FY 2017-2018.
Last month, at the International Renewable Energy Agency (IRENA) Council, the Minister of New and Renewable Energy (MNRE) said that fighting against climate change and adopting renewable energy technologies is a matter of faith and commitment for India. He encouraged other member countries to enhance the capacity of renewable energy institutions and focus on innovation in new areas.
The 2019 survey said that coal would remain central to the country’s electricity generation. Noting that it may not be advisable to effect a sudden abandonment of coal-based power plants without complete utilisation of their useful lifetimes as it would lead to the stranding of assets that can have a further adverse impact on the banking sector.
India is largely dependent on coal. It is one of the world’s largest coal producers and greenhouse gas emitters. The survey estimates coal to be a primary source of energy for at least the next three decades.
India’s coal use rose 9.1% to nearly a billion tonnes in 2018-2019. The survey said it would be difficult for its growing economy to shift completely to renewable power supplies unless a sufficient technological breakthrough in energy storage happens in the near future.
The energy intensity of India’s GDP has been declining in the recent past, which is reflective of increases in the efficiency of energy use. However, India cannot become an upper-middle-income country without (i) rapidly raising its share of the global energy consumption commensurate with its share of the global population, and (ii) ensuring universal access to adequate modern commercial energy at affordable prices, the survey said.
By 2022, the country aims to install 175 GW of renewable energy capacity- 100 GW from solar energy, 60 GW from wind energy, 10 GW from biopower and 5 GW from small hydropower.
The survey noted that the solar tariff has come down from around IN ₹18/kWh (US $0.26) in 2010 to IN ₹2.44/kWh (US $0.036) in bids conducted in 2018. Similarly, for wind power, the tariff has declined from an average of IN ₹4.2/kWh (US $0.061) in 2013-2014 to IN ₹2.43/kWh (US $0.035) in December 2017.
The survey estimates the energy efficiency market in India to be US $22.81 billion. The implementation of various energy efficiency measures has resulted in total cost savings of around IN ₹53,000 crores (about US $7.7 billion) in 2017-2018 and contributed to reducing 108.2 million tonnes of carbon dioxide emissions.