Introduction

India has witnessed a tremendous rise in energy consumption in recent years, driven by rapid economic growth and a growing population. To address this demand and balance the pillars of profitability and sustainability, India has set ambitious targets to increase the share of renewable energy in its energy mix, with the goal of achieving 450 GW of renewable energy capacity by 2030. Renewable energy capacity in India increased by 250 per cent between 2014 and 2021, with the non-conventional energy sector receiving FDI inflow of US$ 12.57 billion between April 2000-June 2022. This rise of green energy has created significant investment opportunities for businesses and investors looking to tap into the growing demand for green energy solutions in India.

Sustainability as a way of life is integral to India’s cultural ethos. An eco-conscious global partner gearing to touch the $10-trillion mark by 2035, India is focused on creating a sustainable and inclusive future. The deployment of renewable energy in India is primarily aimed at advancing economic development, enhancing energy security, facilitating access to energy, and mitigating the impact of climate change.

With some parts of the country receiving over 300 days of sunshine every year, India’s natural location along the equator lends it a strategic advantage in solar energy production. This advantage extends to wind energy projects, with India’s 8,000-kilometre coastline. Additionally, India's vast hydropower potential is estimated at over 100,000 MW. These natural bounties have provided India with a unique opportunity to lead the way in renewable energy production and create a green economy. 

India has a total installed generation capacity of 408.71 GW, of which the share of renewable energy is 42.26 per cent. The 172.72 GW of capacity from non-fossil fuel sources installed in the country includes 119.09 GW RE, 46.85 GW Large Hydro and 6.78 GW Nuclear Power capacity. 

A recent report by the Institute for Energy Economics and Financial Analysis revealed that India witnessed a record-high investment in renewable energy in FY22, with a whopping $14.5 billion invested, depicting a significant increase of 125 per cent from the previous year. Furthermore, this represents a 72 per cent increase from the pre-pandemic period of FY 2019-20. The country is poised to attract over $ 20 billion in renewable energy investments in the year 2023 alone. 

Government Policies and Initiatives

In accordance with the five nectar elements, the ‘Panchamrit’ of India’s climate action, the nation seeks to pursue an inclusive and sustainable growth trajectory by ensuring responsible consumption and sustainable resource management. As chair of the G20, India will discernibly push for the provision of finance and technology as critical enablers for achieving the climate goals set by the Paris Accord. 

India is set to achieve energy independence through clean technology by 2047, given the push from the Make in India initiative that spans a massive renewable capacity addition. Investors are keeping a keen eye on the sectors of battery storage, EVs, and green hydrogen. The Government has permitted foreign direct investment (FDI) up to 100 per cent under the automatic route in the renewable energy sector to shape the global narrative in favour of decarbonisation and encourage green energy. 

The waiving of inter-state transmission system charges for inter-state sale of solar and wind power, and the declaration of a trajectory for renewable purchase obligation up to the year 2029-30 reflect significant strides towards promoting green energy. To facilitate solar project developers to set up projects expeditiously, the initiative for the development of Ultra Mega Renewable Energy Parks has been undertaken. Industry players are bidding for financial incentives offered by the government to expand domestic manufacturing of solar panels and improve supply chain resilience, as part of the production-linked incentive (PLI) scheme.

The government’s recent approval of the National Green Hydrogen Mission is a step ahead in the vision to make India a global hub for the production, utilisation, and export of Green Hydrogen and its derivatives. Investments in this sector via the Foreign Venture Capital Investor (FVCI) route will also be explored. Adoption of green hydrogen can enable India to abate 3.6 gigatonnes of CO2 emissions cumulatively between now and 2050  and reduce industrial coal imports by 95 per cent. 

New energy trading platforms specifically for the renewable energy market i.e., Green Term Ahead Market (GTAM) and Green Day Ahead Market (GDAM) have been introduced for selling off the power by the renewable developers in the open market without getting into long term Power Purchase Agreements (PPAs). India, currently, is the only large electricity market in the world to implement a GDAM exclusively for renewable energy. The Indian Energy Exchange (IEX) traded 341 million units (MU) of renewable energy in February 2023 alone.

India's commitment to sustainable development is demonstrated by the country's gradual decoupling of economic growth from greenhouse gas emissions. The Net Zero Emissions target by Indian Railways alone will curb emissions by 60 million tonnes annually. The UJALA LED bulb campaign is transforming the energy landscape and reducing emissions by a staggering 40 million tonnes annually. The Indian economy is already about 25-28 per cent less emission intensive now, in comparison to the 2005 baseline. Present projections show a roughly 45-50 per cent reduction of emission intensity by 2030, compared to 2005 baseline, in line with the enhanced targets announced at Glasgow. The country's per capita CO2 emissions (1.8 tonnes per capita) are significantly lower than the global average, rendering it a testament to India's sustained efforts to reduce emissions and promote sustainable development. 

India is promoting the outreach and potential of its initiatives in the climate change and disaster risk reduction spheres as envisaged in the International Solar Alliance and Coalition for Disaster Risk Initiative projects. On the domestic front, India has implemented the National Action Plan on Climate Change (NAPCC) which includes eight missions focusing on various sectors such as solar power, energy efficiency, sustainable habitats, and more. These initiatives showcase India's commitment to fighting climate change and promoting sustainable development globally and domestically.

Recently, the Sweden India Business Council signed a memorandum of understanding (MoU) with the Maharashtra government to collaborate on waste to energy, sustainable infrastructure and transportation, defence manufacturing, and investment. Under the U.S.-India Strategic Clean Energy Partnership (SCEP), both sides have expressed their support for the development and deployment of hydrogen technologies and the launch of a new Energy Storage Task Force. The Indian Minister of Commerce expressed interest in increasing U.S. collaboration in solar power, battery storage, and offshore wind turbines, and is set to welcome the planned Clean Energy and Environmental Technology Business Development Mission to India in 2024. 

The government is, also, targeting its first indigenously designed and built hydrogen train to roll out in December 2023. In the sphere of the Indian semiconductor segment, investments are progressing, with the first few announcements expected in the coming weeks. 

Role of the Private Sector

Indian power producers are transitioning towards carbon neutrality and investing heavily in renewable energy. Tata Power has pledged to not build new coal-fired projects while JSW Energy is investing in solar, wind, and hydropower plants to become carbon neutral by 2050. Reliance has acquired REC Group of Norway and invested in German solar wafer manufacturer NexWafe GmbH to expand its solar capabilities. Private companies such as Greenko and ReNew Power are offering on-demand energy solutions and storage services. Independent power producers (IPPs) are partnering with companies with technological prowess to develop decarbonisation solutions, presenting opportunities for global strategic investors to collaborate and invest in local players.

The innovation industry has become an emerging player in the sector. The Government of India has recognized over 4600+ startups under the sustainability sectors as of November 2022. These startups are working in the domains of nuclear energy, solar energy, clean technology, electric vehicles, etc. India has recognized over 2,212 startups in the renewable energy sector, 1903 startups in the green technology sector, and 504 startups in the waste management sector. 

Conclusion

India's commitment to sustainable development is evident in its ambitious goals to increase green energy capacity and decrease greenhouse gas emissions. The country's abundant natural resources, including its potential for solar, wind, and hydropower energy, provide a unique opportunity for India to lead the way in renewable energy production and create a green economy. The government's policies and initiatives demonstrate India's unwavering dedication to promoting decarbonization and encouraging green energy. The recent surge in renewable energy investment in India, a staggering 125 per cent increase from the previous year, underscores the growing demand for green energy solutions in the country. Ultimately, India aims to achieve energy independence through clean technology by 2047, with a strong emphasis on promoting sustainability and inclusivity.