Industry
Data explainer: India’s green energy goals face stiff test
Summary
- Prime Minister Narendra Modi has reiterated the goal of reaching 500 GW green energy capacity in six years. While the pace has improved lately, much work remains.
On 15 August, Prime Minister Narendra Modi reaffirmed India's ambitious goal to achieve 500 gigawatt (GW) of non-fossil-based energy capacity by 2030, covering renewables like solar, wind, biomass, and small hydro power, alongside nuclear and large hydro power. Although the country missed its previous target of 175 GW of renewables by 2022, recent developments suggest that India might still have a shot at reaching this goal.
To meet this target, India needs to add an average of 46 GW of capacity annually until 2030—a formidable task given the pace of the last few years. However, the outlook is improving. In the first six months of 2024 alone, India added 15 GW, matching the entire capacity addition of 2023. The government is also ramping up efforts, aiming to invite bids for 50 GW of capacity additions annually until 2027-28. If this momentum continues, India would be just in time to reach the 500 GW mark by 2030, given that renewable energy projects typically take up to two years to power up.
According to the Centre for Energy Finance, an initiative of the Council on Energy, Environment and Water, around 95% of the bidding trajectory target for 2023-24 was met, though only 47% of the bids resulted in successful auctions.
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Meanwhile, India holds its position as the world’s fourth-largest renewable power capacity, trailing only China and Brazil among emerging economies, excluding hydropower plants.
Also read: The rooftop eclipse on India’s solar ambitions
Transition tightrope
India also aims to power half of its energy capacity with renewables by 2030, a goal supported by encouraging progress. Thermal power (which largely relies on coal-fired plants) now accounts for a 55% share in India’s overall capacity, down from 66% in 2017, while renewable energy’s share has increased to 33% from 18%. But while India's renewables sector is growing rapidly, its increasing power demands as a developing economy often lead it back to coal.
According to the Global Energy Monitor, India already has 240 GW operating coal power capacity and 97 GW is under development. Earlier this year, the power ministry told Reuters that India would start operating new coal-fired power plants totalling up to 13.9 GW this year, the biggest addition in six years. At COP28 last year, India and China abstained from committing to tripling the global renewable energy capacity by 2030, as the pledge called for a phase-down of coal power.
State pioneers
While India pursues ambitious goals as part of its climate pact on the global stage, only a handful of major states lead this commitment. As of July, Rajasthan and Gujarat are at the forefront with 28 GW and 27 GW of installed renewable capacity, respectively, followed by Tamil Nadu (20 GW), Karnataka (17 GW), Maharashtra (13 GW), Andhra Pradesh (9 GW), and Madhya Pradesh (7 GW). The government has announced transmission schemes to integrate 66.5 GW of renewable energy generation across these states, with projects in various stages. The state-run Solar Energy Corp. of India Ltd has identified potential zones in eight states for addition of 181.5 GW.
Meanwhile, segment-wise progress within renewables will also need to be watched: Solar has led the push so far, though low installation rates in the solar rooftop sub-segment and the wind energy component were blamed by a parliamentary committee for India’s failure to meet its 2022 target.
Read this | Real costs: Why solar and wind energy are not market winners yet
Green budget
The Union budget plays a crucial role in setting the tone for clean energy acceleration each year. In line with this commitment, the 2024-25 budget saw one of the largest and most significant allocations towards central schemes and projects under the ministry of new and renewable energy, allocating ₹18,853 crore to renewable energy initiatives, a 90% increase from the previous year and 147% jump from the 2023-24 revised estimates.
This significant boost in the budget may highlight the government's dedication, but a look at historical data reveals a cautionary trend. Actual spending has often fallen short of the budgeted amounts in recent years, with 2022-23 being a notable exception.
As India pursues its ambitious 500 GW non-fossil-based energy goal by 2030, success will depend on developing a balanced green grid, advancing research and development, and moving away from coal. Despite increased budgets and ongoing progress, these challenges must be addressed swiftly to shape India’s renewable energy future.
