India eyes 2047 milestone on path to net-zero by 2070, with focus on renewable energy, nuclear power, and green hydrogen

But getting there requires a vast improvement in the infrastructure. This will require heavy investment not just from the government but from the private sector as well.

Capacity Building

To ensure steady progress towards net zero, the country needs to take it one step at a time. In a recent report, Climake, an organisation working in the climate finance space, noted that adoption of renewable energy needs to accelerate. The year 2024 will mark the largest addition yet of non-fossil fuel energy capacity in India. “The 14.2 GW added in the first six months exceeds the 13.5 GW installed in 2023. But more is needed; annual installed capacity additions have to average 60GW by 2030,” the report said.

Besides, another problem that needs immediate attention is storage. That’s because the increase in green energy capacity does not automatically translate to a commensurate increase in green energy generation. In 2023, non-fossil fuel energy accounted for 45% of electricity capacity but only 24% of generation. India needs to upgrade its grid to balance renewable energy’s variability.

The country must also upgrade transmission and distribution to integrate renewable energy. That last part alone requires an investment of $30 billion. Till that is put in place, renewable energy generation will lag, highlighted the Climake report.

Vibhuti Garg, Director-South Asia at the Institute for Energy Economics and Financial Analysis (IEEFA), is of the view that the future of energy transition should include both demand side and supply side push.

“While renewable energy capacity is increasing, the speed and scale need to accelerate. Further, grid modernisation, which includes smart grids with real-time monitoring and deploying flexible generation sources, will be crucial for RE grid integration,” says Garg.

Industrial Decarbonisation

One area that is key to the energy transition is the industrial sector, one of the major carbon emitters. Several top-listed companies like the Tata group firms and Reliance have announced their commitments and net-zero pathways.

This transition will require investment in low-carbon technologies such as carbon capture, utilisation, and storage, and ramping up work on alternative fuels such as green hydrogen. India launched the Green Hydrogen Mission with a capital outlay of `19,744 crore in 2022, keeping in mind industrial decarbonisation of hard-to-abate sectors like steel and cement. In addition to that, the Union Budget 2024-25 has proposed partnerships with private players to build small hybrid reactors for nuclear power.

Amit Bansal, Co-founder and CEO of green hydrogen producer Hygenco Green Energies, says green hydrogen can play a pivotal role, especially in hard-to-abate industries. Hygenco is setting up India’s first commercial long-term offtake green hydrogen plant with Jindal Stainless.

“Projects like these can go a long way in reducing the energy intensity of industries, especially as India continues to build significant infrastructure in the next two decades. Another application of green hydrogen is in refineries, where replacing grey hydrogen can reduce carbon emissions,” Bansal tells BT.

According to industry players, commercialisation of green hydrogen could also usher in a new era of clean energy-driven growth. “Overall, India’s clean energy transformation could open up new, exciting opportunities for India Inc. in the next 20 years and lay the foundation for a sustainable, secure, and resilient energy future as India turns 100,” says Aditya Lolla, Asia Programme Director at Ember, an independent energy think tank.

Technology will power this journey, but experts suggest that domestic solutions should be at the forefront. “India should lead the research and development of new technologies and promote domestic manufacturing to address energy security on one hand but also promote more job opportunities in energy and allied sectors,” says Garg. This will help in economic diversification and create alternative employment opportunities and will ensure that the transition happens in an equitable manner, she adds.

On a positive note, the Climake report found that corporate participation has grown significantly since 2020. In 2023, Indian corporate houses made up 47% of private investors in climate action.

Finance

That said, the transition will require a lot more investment. The International Energy Agency (IEA) estimates that India needs $160 billion per year, on average, between now and 2030 to put it on track to reach net zero by 2070. That’s three times today’s investment levels.

Public investment alone will be insufficient to tackle India’s adaptation and mitigation targets. Access to low-cost long-term capital is key, so bringing in private sector investment is vital. Experts say blended financial instruments like concessional loans, guarantees, subordinated debt, and performance-based incentives, in combination with other tools such as advisory and technical assistance, can help. Climake, too, expects blended instruments to bring in grants with risk capital. Besides, industry players say incentives like tax breaks and concessional loans, too, can expedite the transition.

Hygenco’s Bansal suggests introducing measures such as carbon pricing to promote demand for green hydrogen and green ammonia. “Lower taxes, improving infrastructure for attracting investments, and duty waivers can go a long way in boosting exports,” he adds.

The next two decades will be pivotal, Lolla of Ember says. The expansion of solar energy, wind, and battery storage, electricity grid modernisation, and the ability to attract investments will determine the pace of the transition. “As we enter the 2030s, new electrification technologies are expected to emerge, leading to a sizeable rise in electricity demand,” he tells BT.

India’s march to become a developed economy by 2047 and reach net zero by 2070 has begun in earnest, but a lot needs to be done to meet those targets.

@richajourno