The bill for India's renewable energy goals by 2030 – $560 billion

• NIIF’s MD and CEO Sujoy Bose gives a break up of investments across sectors to hit its renewable energy targets by 2030.
• India needs to invest $200 billion to set up 500GW of non-fossil fuel energy.
• The country needs $160 billion to fund its green hydrogen goals.
• The capex that must be spent towards electric vehicles is $200 billion, says Bose.

India needs hundreds of billions of dollars in capital infusion to meet its sustainability and renewable energy targets. Sujoy Bose, the MD and CEO of the National Investment and Infrastructure Fund, has put a number on it – $560 billion.

That’s more than a seventh of India’s current GDP of $3.5 trillion.

According to Bose, India needs to invest trillions of dollars to achieve its goal of “Net Zero” by 2070.

Bose said India’s sustainability goals could not only help it environmentally, but also economically.

“India can become a new hub for technology and its deployment. Investing in sustainability is required to be at the forefront of new industries,” Bose said at the annual FICCI Capital Markets conference, adding that these investments could lead to new, higher income jobs as well.

This has the implication of uplifting India’s median wages as well, which stood at $400, placed 72nd among 106 countries in a 2020 survey.

Here’s a breakdown of the different renewable energy bills India will need to fund, according to Bose:

$200 billion for 500GW of non-fossil fuel energy by 2030

Currently, 40% of India’s total energy needs are met by renewables and hydro power. The government intends to increase this to 60% by the end of the decade, and that will need over $200 billion in funds, according to Bose.

As of now, India’s total renewable energy capacity stands at 160GW, and the government has a goal of expanding it to 500GW by 2030.

By the government’s estimates, India’s total energy capacity would more than double from the current 404GW to 820GW by 2030.

$160 billion to fund India’s green hydrogen goals

Green hydrogen is being seen by many as a key component of achieving “Net Zero” status. This prospect has India’s richest men – Gautam Adani and Mukesh Ambani – excited.

Earlier this year, Adani Enterprises announced a partnership with France’s TotalEnergies to create a green hydrogen ecosystem with an investment of $50 billion over the next 10 years.

Ambani, on the other hand, pledged $75 billion towards green energy – including an undisclosed sum towards green hydrogen.

Yet, these announcements are still not close to the total capex required for green hydrogen goals. But help is coming, including from the state-run Indian Oil Corporation, and the Hyderabad-based Greenko group.

$200 billion for India’s EV goals by 2030

The EV revolution might still be on its way to India, but there has been an uptick in EV sales over the past two years — inching towards 5 lakh units.

A report by India Energy Storage Alliance (IESA) states that EV sales could increase at a compounded annual growth rate of 49% till 2030, touching total sales of 17 million.

For that to materialize, though, Bose says a massive $200 billion capex is needed.

Here’s how India can fund its renewable energy goals

According to Bose, three types of capital will be required to fund India’s renewable energy goals, including equity, risk capital, and debt.

“The government has shown the way via the regulatory innovation in the case of renewable energy – the creation of the Solar Energy Corp of India, combined with tools such as priority dispatch, was crucial to give a fillip to private investment in the renewable sector,” he said.

He says this has led to renewable energy generation being cheaper than coal-fired power in many cases.

For now, though, most of the equity investment in the renewable energy sector is foreign. Bose says that linking international and domestic finance to climate-related projects will help close the gap.

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