India: A CleanTech Success Story
The worldwide pandemic will most likely not stop the demand for clean energy in India.
While China is the most populous country in the world with over 1.4 billion people, India is projected to outrun it around 2027 by adding nearly a quarter of a billion people by 2050. As the country’s population is growing fast, so is the demand for energy. Even though India’s fossil fuel energy consumption falls behind only China and the US, the country has also some ambitious goals in the renewables market.
Support from the local government and foreign investors
By having introduced the world’s largest net-zero expansion programme a few years ago, India made a clear statement – the country is determined to supply cheaper energy to its population with as little damage to the environment as possible.
Even if the government’s initial target to achieve 175 GW from renewables by 2022 (to compare, the current renewables capacity is 83 GW, 31 GW is under development and 35 GW of tenders pending auction) is most likely not viable anymore due to the global pandemic spread. In spite of the consequent economic downturn, India’s energy transition is still promising.
Some experts argue that despite the current challenges, the Indian government could still execute its target of 450 GW of renewable energy by 2030. Interestingly enough, Ray Wood, the head of power, utilities and renewables at the Bank of America, said India could benefit from the coronavirus pandemic as the “outbreak could cripple the Chinese economy” which can result in great interest for “Indian paper in offshore capital markets”. Having said this, the shape of energy transition will depend on the growth of the Indian economy and the speed of renewable deployment.
Currently, India is among the top-five clean-energy producers globally. A significant amount of local and foreign investments have undoubtedly pushed the growth of the renewable energy sector. It has received around $50 billion of investments since 2014 of which almost 15% was from foreign direct investment.
In addition, falling renewable energy prices and new technologies, a favourable policy environment and government reforms make India attractive for investors in clean energy. As a result, it is estimated that India’s renewable energy sector could attract another $10 billion of investments a year.
Young enterprises are leading the way towards better and cleaner future
A changing landscape in the energy sector and a push from the Indian government has boosted a number of startups operating in the cleantech space. While a great part of these enterprises are driving innovations and competition in the solar and wind energy sector – with ReNew Power being the most prominent Indian unicorn built on green energy – some of the country’s public and private institutions are also supporting young businesses that are deploying clean energy-powered livelihood appliances.
Such initiatives are aimed at solving the challenges around reliable electricity which impact the livelihood opportunities and incomes of households. In fact, India has an untapped market worth more than $50 billion for clean energy solutions for rural livelihoods.
Even if Covid-19 is testing the business models of the best startups, the demand for clean energy is set to rise in the long run, so will the need for innovative enterprises.
For more information on the evolving cleantech revolution in India, please see articles on the right to energy movement, how India is democratising access to energy, and how Indian innovation is empowering rural communities.