New Delhi (India) February 25 (ANI) India may fail to achieve its 2030 ambitious target of 500 GW renewable energy if annual financing does not grow by 20 per cent annually, according to a new report by UK-based energy think-tank Ember.
As per the report, a total capital flow of USD 300 billion will be needed to keep India on track to meet its renewable energy commitments.
The report also highlighted that project commissioning delays driven by land acquisition challenges, grid connectivity issues, and regulatory hurdles could significantly impact India’s renewable energy growth. This will potentially cause a 100 GW shortfall in India’s 2030 renewable energy target, the report noted.
India has an ambitious renewable energy target of achieving 500 GW from non-fossil sources by 2030. The report underscores the urgent need for regulatory reforms and risk mitigation strategies to sustain the country’s clean energy transition.
“Project commissioning delays, driven by land acquisition challenges, grid connectivity issues and regulatory hurdles, remain a significant concern for India’s renewable energy sector,” the report released on Tuesday noted.
Furthermore, the report mentioned Firm and Dispatchable RE (FDRE) projects, designed to enhance renewable energy dispatch ability through oversizing solar and wind projects and integrating storage, can introduce additional risks.
“These include penalties for failing to meet demand targets, exposure to market price fluctuations, and uncertainties surrounding future battery costs. Combined, risks from project delays and FDRE projects have the potential to raise the cost of capital by up to 400 basis points (bps ~ equivalent to 1/100th of 1 per cent, or 0.01 per cent),” the report noted.
As per the report, investment in renewable power generation and transmission for FY 2024 are estimated at USD 13.3 billion, marking a 40 per cent increase from the previous year. However, the report mentioned, that achieving the National Electricity Plan (NEP)-14 targets will require annual financing to grow by 20 per cent annually, reaching USD 68 billion by 2032.
“Over this period, a total capital flow of USD 300 billion will be needed to keep India on track to meet its renewable energy commitments,” the report noted.
Experts stress that tackling land acquisition bottlenecks, standardizing power contracting, and introducing risk-sharing mechanisms are key to mitigating these risks. Structured contracts like Contracts for Difference (CFDs) and increased concessional financing for FDRE projects could help developers manage financial uncertainty.
Neshwin Rodrigues, Senior Energy Analyst for India at Ember, emphasized, “Understanding project-specific financing risks for RE projects is key to designing targeted mitigation measures that keep the cost of capital low.”
Duttatreya Das, Energy Analyst for India at Ember, added, “This report presents a transparent risk premium assessment methodology for renewables. By demystifying the quantification of risks and their magnitude, it ensures that all RE stakeholders–developers, financiers, and policymakers–have access to a structured framework for evaluating risks.”
In 2023, the government declared a plan to add 50 GW of renewable energy capacity annually for the next five years to achieve the target of 500 GW by 2030.
According to the Central Electricity Authority, the total renewable energy-based electricity generation capacity now stands at 203.18 GW. This achievement underscores India’s growing commitment to clean energy and its progress in building a greener future.
Additionally, when including nuclear energy, India’s total non-fossil fuel capacity rose to 211.36 GW in 2024, compared to 186.46 GW in 2023, as per the official data. ( ANI)
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