India should strengthen its power grids and put an emphasis on a clear policy framework to bring down the cost of capital investments, the head of the International Renewable Energy Agency (Irena) said on Tuesday, as the nation aims for ambitious renewable energy targets.
Prime Minister Narendra Modi has set a target of raising India's renewable power generation to 175 gigawatts (GW) by 2022.
The South Asian nation, which currently has installed renewable power capacity of about 60 GW, is one of the world's most important growth markets for renewable energy, and as it aims to generate more renewable power, the more it needs to have a robust grid infrastructure.
"I think the main constraint in India is not going to be investment for renewables. The main constraint in India right now is whether they can strengthen their grid," Adnan Amin, director general of Irena said on the sidelines of the launch of Singapore International Energy Week 2018.
"Because in order to take a large share of renewables into the grid effectively, you need a robust infrastructure."
Amin said renewables have a "huge future" in India but currency and policy-related risks priced into the cost of capital tends to be a problem.
"If investors can be given a very clear sense of reliable policy framework, and hedging mechanisms that allow them to draw down the cost of capital, I think that'll make a big impact," he added.
India is aiming for renewable energy to make up 40 percent of installed power capacity by 2030, more than double the current level.