Clean energy investment in India on track to double by 2030

But needs to increase investment by further 20% to get fully on track for country’s energy and climate goals

Amit Chettupuzha

NEW DELHI: Clean energy investment in India is on track to double by 2030 under today’s policy settings, but would need to rise by a further 20 per cent to get fully on track for the country’s energy and climate goals, according to the International Energy Agency (IEA).

The latest data from the IEA indicates that there has been a substantial increase in spending on clean energy projects, particularly in low-emissions power generation such as solar photovoltaics (PV). However, while progress is being made, further efforts are needed to align investments with energy and climate objectives.

In 2023, global clean energy investment reached $68 billion in 2023, up by nearly 40 per cent from the 2016-2020 average, marking a significant uptick of nearly $33 billion in 2023, driven by escalating demands for fuel and coal-fired power generation.

The IEA’s World Energy Investment report brought to light the disparities in clean energy spending across different regions, particularly in emerging and developing economies outside of China.

India faces challenges

Notably, countries like India and Brazil are leading the charge in clean energy investments, with spending projected to exceed $300 billion for the first time. This underscores the increasing global momentum towards sustainable energy solutions.

India, in particular, emerges as a key player in the clean energy transition, boasting a robust GDP growth rate of 7.8 per cent in 2023 and positioning itself as one of the fastest-growing major economies globally.

Despite its economic expansion, India faces challenges related to poverty alleviation, job creation, and infrastructure development. Moreover, the country’s energy demand is expected to soar in the coming years, driven by urbanisation, industrial growth, and rising electricity needs.

 “Clean energy investment is setting new records even in challenging economic conditions, highlighting the momentum behind the new global energy economy. For every dollar going to fossil fuels today, almost two dollars are invested in clean energy,” IEA Executive Director Fatih Birol, said.

To address these energy challenges and uphold its climate commitments, India has adopted a range of decarbonisation strategies.

Notably, the country has set ambitious targets, including achieving net-zero emissions by 2070. India has significantly ramped up investments in solar and wind power projects, alongside initiatives to bolster domestic clean energy supply chains. Measures such as the Production Linked Incentives scheme for solar module manufacturing and the introduction of a hydrogen policy underscore India’s commitment to sustainable energy development.

In 2023, India made its foray into the sovereign green bond market, issuing bonds worth $1 billion to support renewable energy projects, metro rail infrastructure, and low-carbon hydrogen production. The overwhelming investor response to these bonds highlights the growing appetite for sustainable investment opportunities.

On a global scale, total energy investments are projected to surpass $3 trillion in 2024, with a substantial portion earmarked for clean technologies. These investments span a wide array of areas, including renewables, electric vehicles, nuclear power, grids, energy storage, low-emission fuels, efficiency enhancements, and heat pumps.