Addressing India’s Slow Renewable Energy Uptake

As India enters the next phase of its growth trajectory, its energy demand is set to rise exponentially—around 335 GW by 2029-30. That demand is outstripping supply can be gauged from the load factor of thermal power plants. This measure of capacity utilisation has risen from 71% last year to 76% in January 2024.

The coal addition has been set at a very high level of 80 GW (the Government says it is under construction) because renewable generation is inadequate. While tenders have exceeded green energy targets, we still have a long way to go —- we need to add about 40 GW per year in green energy by 2030, while we are only achieving 10 GW per year.

We should see this in the stark paradox of India having committed to net zero emissions by 2070, accelerating its thermal generation, having slow and below-target renewable energy growth, and rapidly increasing its energy demand. It is clear that the answer lies in a disproportionate increase in green energy generation.

The sector needs to see exponential growth in investment. I hope the upcoming Union Budget will facilitate the ecosystem in this regard. With a solid inflow of investment enabled by policy incentives, the sector can add 50-60 GW per year from the current 10 GW to 15 GW. Higher loan capital is essential for this. With financial infrastructure and improved land acquisition, I am sure the depth and breadth of the market will have an immediate impact on the sector.

In addition, an often overlooked area that we should consider is dedicated transmission corridors along the Green Energy Corridor (GEC) lines for renewable energy evacuation. This will go a long way in addressing the energy evacuation challenges faced by hydropower developers, especially in the Northeast.