Renewable Energy Investment


Compiled by Vraj Dani

Renewable energy capacity increased about four times between 2010 and 2019, from 414 GW to 1650 GW, thanks to investments made during that time. It is anticipated that solar capacity will have increased by more than 26 times, from 25 GW to a projected 663 GW. Three times as much money was invested in new fossil fuel generation in 2018 as was invested in capacity ($272.9 billion). 

Cost was another long-standing reason against investing in renewable energy, but over the past ten years, renewable energy has become more cost competitive. Solar photovoltaics’ levelized cost of power has decreased by 81%, and onshore winds has decreased by 46%. 

Investment In India’s Renewable Energy Sector 

Solar, wind, hydro, and biomass energy make up a sizable share of the electricity produced in India. If India wants to reach the 40% goal outlined in the Paris Agreement, it must keep making significant investments in the renewable energy industry. 

According to joint research by the Council on Energy, Environment, and Water (CEEW) and the International Energy Agency (IEA), investments in India’s renewable energy sector have doubled over the past five years. As a result, tariffs have also decreased. In India, the cost of solar energy was at a record low of $2.44 per unit, and the cost of wind energy was at a record low of $2.64 per unit. 

The urgency of making investments in sustainable energy initiatives has grown over time. Two thirds of all greenhouse gas emissions are attributed to energy use, and programs like the Climate Investment Platform (CIP) aim to increase the amount of cash flowing into developing nations in order to help them achieve their climate goals. 

Prime Minister Narendra Modi also promised to more than quadruple India’s pledge of 175 GW under the Paris Climate Agreement, to 450 GW by 2022, while speaking at the climate summit in New York on September 23. One feels upbeat after witnessing the Indian government make such a significant commitment, but execution is key. Only by investing heavily in the renewable energy sector can we hope to unlock a sustainable future for both India and the world 

Renewable resources

India’s renewable energy industry is flourishing. 

According to a report from the Institute for Energy Economics and Financial Analysis (IEEFA), investments in the nation’s renewable and new energy sector reached a record high of $14.5 billion in the fiscal year that ended on March 31, 2022, an increase of 125% over the prior year and 72% over the year before. 

According to the report’s author Vibhuti Garg, an energy economist and lead India for IEEFA, “the increase in renewables investment comes on the back of the revival of electricity demand from the covid-19 lull and commitments by corporations and financial institutions to net-zero emissions and to exit fossil fuels. 

India’s renewable energy target 

IEEFA, on the other hand, believes that this is insufficient to meet India’s ambitious target of adding 400GW of renewable energy generation capacity by 2030. 

India added 15.5 GW of renewable energy capacity in fiscal year 2021-22, bringing the total installed renewable capacity (excluding large hydro) to 110GW as of March 2022. This is a long way from the target of 175GW by the end of this year. 

“Even with the surge in investment, renewable capacity will need to expand at a much faster rate to meet the target of 450GW by 2030,” Garg said. “To meet the 450GW target, the Indian renewable energy sector will require approximately $30-US$40 billion per year.” This would necessitate more than doubling the current level of investment.” 

Investments In Renewable Sources 

According to the data released by the Department for Promotion of Industry and Internal Trade (DPIIT), FDI inflow in the Indian non-conventional energy sector stood at US$ 11.62 billion between April 2000-March 2022. More than Rs. 5.2 lakh crore (US$ 70 billion) has been invested in India’s renewable energy sector since 2014. According to the analytics firm British Business Energy, India ranked 3rd globally in terms of its renewable energy investments and plans in 2020. 

Some major investments and developments in the Indian renewable energy sector are as follows: 

  • In August 2022, Norfund, who manage the Norwegian Climate Investment Fund, and KLP, Norway’s biggest pension company, signed an agreement to buy a 49% share of a 420 MW solar power plant in Rajasthan for Rs. 2.8 billion (US$ 35.05 million).
  • India has generated 47.64 BU of solar power in the first half of 2022, a 34% YoY increase. 
  • Investment in renewable energy in India reached a record US$ 14.5 billion in FY22, an increase of 125% over FY21. 
  • Delhi’s Indira Gandhi International Airport (IGIA) has become the first Indian airport to run entirely on hydro and solar power. Around 6% of the airport’s electricity requirement is met from the onsite solar power plants. 
  • Ayana Renewable Power Pvt Ltd (Ayana) announced plans to set up renewable energy projects totaling 2 gigawatts (GWs) with an investment of Rs. 12,000 crore (US$ 1.53 billion) in Karnataka. 
  • India ranked third on the EY Renewable Energy Country Attractive Index 2021. 
  • In February 2022, Creduce Technologies-HCPL JV announced winning the bid for India’s single largest hydro power carbon credits project with Satluj Jal Vidyut Nigam, which will create more than 80 million carbon credits. 
  • In February 2022, Husk Power Systems, a renewable energy company working towards rural electrification, secured a US$ 4.2 million loan from the Indian Renewable Energy Development Agency (IREDA). 
  • In December 2021, India’s largest energy provider, Tata Power, was awarded a contract by the Maharashtra State Electricity Distribution Company Limited (MSEDCL) to set up a 300 MW wind-solar hybrid power plant. 
  • In October 2021, Reliance New Energy Solar Ltd. (RNESL) announced two acquisitions to build more capabilities. Both acquisitions – REC Solar Holdings AS (REC Group), a Norway-based firm, and Sterling & Wilson Solar, based in India – exceeded US$ 1 billion and are expected to contribute to Reliance’s target of achieving the capacity of 100 GW of solar energy at Jamnagar by 2030. 
  • In October 2021, Adani Green Energy Ltd. (AGEL) acquired SB Energy India for US$ 3.5 billion to strengthen its position in the renewable energy sector in India. 
  • In August 2021, Copenhagen Infrastructure Partners (CIP) signed an investment agreement with Amp Energy India Private Limited to facilitate joint equity investments of US$ 200 million across Indian renewable energy projects. 
  • In July 2021, National Thermal Power Corporation Renewable Energy Ltd. (NTPC REL), NTPC’s fully owned subsidiary, sent out a tender to domestic manufacturers to build India’s first green hydrogen fueling station in Leh, Ladakh. 
  • The NTPC is expected to commission India’s largest floating solar power plant in Ramagundam, Telangana by May-June 2022. The expected total installed capacity is 447MW. 
  • The Solar Energy Corporation of India (SECI) implemented large-scale central auctions for solar parks and has awarded contracts for 47 parks with over 25 GW of combined capacity.