Prime Minister Narendra Modi gave the Panchamrit at COP 26 global summit in Glasgow, United Kingdom. According to ICRA, this will be strongly helpful in bringing a large sum of investment in India.
The commitments on emission control and carbon neutrality will have a long term positive impact with promotion of green fuels. ICRA in the recent report published has given analysis on the promises made in 2 phases- up to 2030 and the net zero target for 2070.
India is a developing country and is at an infectious point in terms of its energy consumption. The per capita energy consumption is expected to surge 3-4 times the current demand in the long run.
India has made statement for reducing greenhouse gas emission by 1 billion MT by 2030. Additionally, a net-zero carbon emission is also made which will be achieved by 2070. For both the target to meet that too on time, a strong roadmap is required with timely interventions and large capex/investments.
The industries that we need to keep in mind are the power and transport industry as India is still largely dependent on coal and non renewable sources of energy to a large extent. These sector contribute to 90% of CO2 according to the data provided by International Energy Agency.
All said we need to believe in the fact that ambitious target of 500 GW of clean and renewable energy by 2030 is opening doors for heavy investment to pour in. No doubt this is a daunting task but it is achievable.
The five-pronged strategy presented during the COP26 summit includes higher generation and use renewable energy sources for incremental energy needs and limiting emission from conventional sources of energy. This will make a strategic sense considering recent success of 150 GW capacity commissioning.
Higher reliance on renewables for energy sourcing will necessitate more and more dependence over the years to achieve net zero which has to be increased over years. This means post 2030 projections, a steady pace of 1-3% would be needed to reach the net zero level in 2070. For this investment of Rs 115-135 billion annually is required.
Being one of the fastest growing economies in the world, India needs to find a fine balance between reduction in carbon emission and surging energy needs. As the country enters the developed economy tag over the next few years, the per capita energy consumption is set to surge multifold. The government policies needs to ensure no compromise in its ever-expanding energy needs that could hamper its growth ambitious while simultaneously working towards removing the tag of one of the most polluting nations in the world.
Source: ICRA press release