Economic Survey 2022-23: India a Hotspot for Investment in Renewables & Other Observations

The Economic Survey 2022-2023 has made some important observations about the trajectory of renewable energy sector and transition to clean energy sources. Here are some key observations-

Inching towards installed capacity from clean sources

The Economic Survey notes that India has already achieved the feat of having 40 per cent of installed electric capacity from clean sources of energy, or non-fossil fuel. This was achieved way ahead of 2030, which is what the target was set at in 2015. The target has now been made 50% of installed electricity from non-fossil by 2030.

The contribution of The National Hydrogen Mission and Green Hydrogen Policy to pave the way for India to be energy independent by 2047 and their role in Long Term Low Emissions Development Strategy (LT-LEDS) has also been highlighted.

India- a lucrative destination for renewables

The Survey makes an important observation that India is increasingly “becoming a favoured destination for investment in renewables.” The Renewables 2022 Global Status Report, during the period 2014 -2021, only validates this further as it notes that the cumulative investment in renewables was US$ 78.1 bn. Every year, India has been close to the (or higher than) US$ 10 billion mark of investments since 2016. The exception to this was 2020 because of the pandemic.

CEA estimates

The Central Electricity Authority (CEA) estimates that the optimal generation capacity mix will help meet the “peak electricity demand and electrical energy requirement for 2029-30. It projects the installed capacity by the end of 2029-30 to exceed 800 GW. Of this, clean energy would be over 500 GW.

Further, as per the CEA estimate, the average emission rate will see a decrease by close to 29 per cent by 2029-30

Green hydrogen

As aforementioned, the Survey highlights the significance of Green Hydrogen towards India’s Long Term Low Emissions Development Strategy (LT-LEDS). It projects The National Green Hydrogen Mission help towards “demand creation, production, utilisation and export of Green Hydrogen and mobilisation of over ₹8 lakh crore of investment by 2030.”

Likely outcomes by 2030

It estimates that the green hydrogen production capacity would touch a minimum of 5 MMT (Million Metric Tonne) every year. There would be a total reduction of in fossil fuel imports by more than Rs 1 lakh crore. As far as renewable capacity addition is concerned, it has been pegged at about 125 GW.

Electrolyser technology

Electrolyser costs are expected to see a downturn in future. Innovation in electrolyser technology is crucial to brining down the cost of electrolysers and green hydrogen.

As per a report by NITI Ayog, “the cumulative value of the green hydrogen market in India will be US$ 8 billion by 2030 and US$ 340 billion by 2050. The electrolyser market will be approximately US$ 5 billion by 2030 and US$ 31 billion by 2050. In addition, the adoption of green hydrogen will also result in 3.6 Giga tonnes of cumulative CO2 emission reduction by 2050.

Green bonds

SEBI’s data on green debt securities has revealed that from 2017 to September 2022, 15 Indian corporates have issued green bonds. The value of these stands at Rs 4,539 crore. Most of these bonds concern the generation of renewable energy.

Growth in RE installed capacity 

The total installed power capacity of utilities and captive power plants stood at 482.2 GW as on 31 March 2022. In the same period of 2021, this figure was 460.7 GW. Thus, there has been a YoY increase of 4.7 per cent. “Installed capacity in utilities was 399.5 GW on 31 March 2022 as against 382.1 GW a year back (higher by 4.5 per cent).” Renewable energy sources account for the second highest share of total installed capacity in utilities (27.5%), next only after thermal.

There has also been an increase in electricity generated from captive plants. In FY22, it was 17.2 lakh GWh as against  15.9 lakh GWh in the previous year.  Of this, 14.8 lakh GWh was generated by utilities and 2.3 lakh GWh in captive plants. “Conclusively, between FY22 and FY21, the maximum rise in electricity generation was recorded in renewable energy resources for utilities and for captive plants.”