India Needs $223 Billion To Meet 2030 Renewable Energy Target: Report

India will need $223 billion to achieve its renewable energy target for 2030, according to a BloombergNEF report.

The central government has set itself a target of producing 500 GW from non-fossil fuel sources by 2030. It wants renewables to account for half of India's energy mix by then.

"To achieve this target, India needs to massively scale up funding for renewables," the report stated, adding that $223 billion is required over the next eight years just to meet the solar and wind capacity targets.

At COP26 in November 2021, Prime Minister Narendra Modi announced that by 2030, India plans to reduce its emissions intensity by more than 45% to below 2005 levels. He also pledged net-zero emissions by 2070.

The report titled 'Financing India's 2030 Renewables Ambition', published in association with the Power Foundation of India, found that corporate commitments from Indian companies could help India achieve 86% of its 2030 goals.

By 2021, 165 GW of zero-carbon power generation had already been installed in the country, according to the BloombergNEF report.

According to the Central Electricity Authority, India's reliance on coal will drop from 53% of installed capacity in 2021 to 33% in 2030. Solar and wind together will make up 51% of the energy mix by then -- up from 23% now.

"To date, the growth of renewable energy in India has been funded by a diverse set of financiers. Debt and equity structures have evolved as the market grew and new risks emerged," said Shantanu Jaiswal, lead author of the report and head of India research at BloombergNEF. "India’s ambitious renewable energy targets now require further scaling up of financing with new instruments and learnings from other global markets."

Yet, the scaling up of renewables in India faces regulatory, project and financing risks, with PPA renegotiation, land acquisition and payment delays cited as key risks. In the short-term, rising rates, a depreciating rupee and high inflation are challenges for the financing of renewables.

"Scaling up financing to meet 2030 goals requires independent power producers to tap into new or underutilised sources of capital. These could be revolving construction debt, investment infrastructure trusts and funding from retail investors, insurance companies and pension funds."

"Higher funding requirements also need measures that can increase the availability of financing, such as de-risking renewable projects to offering contractual terms that provide greater comfort to investors," Rohit Gadre, an analyst in BNEF’s India research team, said.