The dominance of fossil fuels in electricity generation will end by 2030, and the share of renewable energy sources will exceed 50% Share: RBI

New Delhi: The dominance of fossil fuels in electricity generation in India will end by the end of the decade, the Reserve Bank of India said in its latest report. The report also indicated that the share of renewable energy in global electricity production is expected to exceed 50%. She added that the energy transition has accelerated in recent years, and the pace of implementation of clean technologies and capital investments has reached record levels.

“The era of fossil fuel dominance is coming to an end and the share of renewable energy sources in global electricity production is expected to exceed 50% by the end of this decade,” the RBI said. She added that the development of cleaner energy generation represents a valuable opportunity to address “hard-to-abate” sectors such as steel and aviation, where low-carbon alternatives are still in their early stages. The central bank also emphasized the importance of increasing investments in low-emission energy.

“Cleaner energy production can deliver urgently needed radical emissions cuts, giving more time to address ‘hard to cut’ areas such as steel and aviation where cost-competitive low-carbon solutions have not yet been deployed on a large scale,” he added R.B.I.

The report indicates that for every dollar invested in fossil fuels in the coming years, an average of three dollars will need to be allocated to renewable energy, a significant increase over the current rate where both sectors receive equal investment. Tripling renewable energy capacity by 2030 is considered essential to achieving net zero emissions targets by mid-century.

“In terms of energy supply, for every US dollar spent on fossil fuels, on average $3 will need to be invested in low-carbon energy over the rest of the decade,” the RBI said. The RBI highlighted that a fully decarbonized global energy system by 2050 will cost an estimated $215 trillion, according to the report.

However, the report remains optimistic about ongoing efforts to green the financial sector, emphasizing that striking the right balance between public policy interventions and market competition will be key to achieving this ambitious energy transformation. The central bank also noted that financial inclusion has improved significantly as the world continues to move towards a more sustainable energy future.