India's Renewable Energy Ambition: USD 200 Billion Investment Needed by 2030

A report by Nomura indicates that India will require about USD 200 billion in investments by 2030 to meet its renewable energy goals. The energy demand is projected to grow at a 7% CAGR, driven by data centers, electric vehicles, and green hydrogen advancements, necessitating an increase in renewable capacity auctions.

A recent report from Nomura suggests that India needs an investment of approximately USD 200 billion to construct renewable energy assets by 2030. This conservative estimate aligns with India's ambitious renewable energy goals. The report further forecasts a compound annual growth rate (CAGR) of 7% in India's energy demand between FY24 and FY30, surpassing the historical growth rate of about 5%.

The surge in energy demand is attributed to the proliferation of data centers, the rising penetration of electric vehicles, and advancements in green hydrogen technology. According to the report, these elements might lead to a higher-than-expected demand for renewable energy. India's current power capacity stands at 450.8 GW, but it's projected to rise to 777.1 GW by FY30, based on a 10% CAGR. Notably, India auctioned 40 GW of RE capacity in FY24, yet to achieve its bold target of 500 GW by 2030, the RE auction pace must escalate to roughly 60 GW annually.

The industry is deemed well-prepared to fulfill this increased demand, thanks to competitive pricing for solar modules and wind turbines. Key growth drivers include supportive government policies and a robust momentum from the commercial and industrial sectors towards green energy solutions. The report also notes that as the cost of producing green hydrogen becomes economically competitive with grey hydrogen, renewable energy demand could surpass current expectations. Currently, India's total hydrogen demand stands at 6 million tons, with projections indicating significant electricity demand increases from EVs. By FY25, EVs are expected to account for 3.4 terawatt-hours (TWh) of electricity, still a small portion of India's total power consumption. However, a government push for 100% EV sales by 2030 suggests sharp demand hikes.

(With inputs from agencies.)