NEW DELHI : India will require policy support from the government and low-cost capital to achieve its ambitious targets for reduction of carbon emission, said a report by Moody’s Investors Service.
It noted that a significant shift in India’s energy mix toward renewable energy will play a key role in meeting the country’s mid- to long-term emissions reduction targets.
The key enabler will be the competitiveness of wind and solar generation over coal-fired power generation because of technological developments, supportive government policies and participation by the private sector, it said. Improving the economics of storage solutions for renewables would add further impetus.
Access to low-cost, long-term capital from the public and private sectors will be vital to achieving these goals.
“Renewable energy will play a significant role in meeting India’s net-zero targets. The Indian government’s plan to reach net-zero emissions by 2070 is contingent upon a shift in the fuel mix from the current predominantly coal-fired power toward clean and renewable energy,” said the Moody’s report.
By 2030, India aims to increase its renewable energy capacity to 500GW from 157GW as of March 2022 and to have 50% of the electricity generation from non-fossil fuel sources (24.8% in fiscal 2022).
Supportive government policies are a prerequisite for the continued significant growth of renewable energy capacity, it said, adding that with India aiming to more than triple its renewable energy capacity by 2030, continuous policy support from the government is key. In the last 4-5 years, India has expanded its renewable energy footprint significantly and that was helped by supportive government policies that encouraged the domestic private sector and overseas investors to participate in the sector.
“Renewable energy will play a significant role in meeting India’s net-zero targets. The Indian government’s plan to reach net-zero emissions by 2070 is contingent upon a shift in the fuel mix from the current predominantly coal-fired power toward clean and renewable energy,” said the Moody’s report.
By 2030, India aims to increase its renewable energy capacity to 500GW from 157GW as of March 2022 and to have 50% of the electricity generation from non-fossil fuel sources (24.8% in fiscal 2022).
Supportive government policies are a prerequisite for the continued significant growth of renewable energy capacity, it said, adding that with India aiming to more than triple its renewable energy capacity by 2030, continuous policy support from the government is key. In the last 4-5 years, India has expanded its renewable energy footprint significantly and that was helped by supportive government policies that encouraged the domestic private sector and overseas investors to participate in the sector.
India’s private sector has led the way in terms of investment in renewable energy by contributing more than 90% of installed renewable capacity, excluding hydropower, it said, adding that sovereign wealth funds, which typically have a low cost of funding, have been active in the sector.
According to the report, both private and public sector contributions will be required to meet the 2030 target of 500GW renewable energy capacity.
“Weak financial profile of state-owned distribution companies remains a key challenge. While policymaking for renewable energy and net zero targets will be mostly driven by the central government, the key challenge remains electricity distribution given the poor financial profiles of state-owned distribution companies,“ it said.
Delays to receiving payments from state-owned distribution companies are common and poor finances have also contributed to non-adherence to Renewable Purchase Obligations, according to Moody’s Investors Services.
Source: livemint.com
