India will need $190-$215 bn investment for renewable energy capacity target

“Renewable energy and transmission projects will be the driving force behind power sector investments,” remarked Moody’s.
Representational image.
Representational image.

NEW DELHI: Domestic power sector is poised to experience substantial investment, primarily propelled by renewable energy and electricity transmission projects, stated Moody’s Ratings on Tuesday.

The report said the sector will need $190 billion to $215 billion investment for achieving renewable energy capacity target by 2030. India aims to achieve 500 GW of renewable energy capacity by 2030, with an annual capacity addition of nearly 44 GW. “Renewable energy and transmission projects will be the driving force behind power sector investments,” remarked Moody’s.

Despite the emphasis on renewables, coal will continue to play a significant role in meeting baseload power requirements, as per the report. Moody’s forecasts that India will add between 40 GW and 50 GW of coal-based capacity over the next five to six years to cater to an anticipated annual power demand growth of 5%–6%. “Even with these additions, the utilization rate for coal-based capacity is expected to remain high at approximately 65%–70%,” Moody’s observed. However, the substantial

investments in renewables could lead to increased financial leverage for companies in this sector.

Moody’s emphasized that robust policy support has enabled India to raise the share of renewable energy in its power capacity mix to around 43 percent in the fiscal year 2023-2024. The report underscores that sustained policy backing will facilitate India’s significant strides towards its 2030 transition targets and its 2070 net-zero targets.

The report also noted that strong policy support has helped India increase the share of renewable energy in its power capacity mix to around 43 percent in fiscal 2023-2024. “The Central Electricity Regulatory Commission’s tariff regulations for 2024-2029 have provided clarity for regulated power companies regarding their returns and cost pass-through mechanisms. This regulatory consistency helps power companies transition toward cleaner energy while maintaining profitability,” the report said.

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