India’s ambitious plan to rapidly transition its economy to renewable energy will have huge environmental, economic, political and social benefits − not just for Asia but for the entire world.
India’s government has set a target of 175 GW of installed renewable energy capacity by 2022, which includes 100 GW of solar, 60 GW of wind, with the remaining 15 GW coming from biomass and small hydro projects.
Meeting these renewable energy targets will make India – home to more than 1.3 billion people – the world’s third largest producer of clean energy, behind the US and China.
The shift to renewables generation will help India, a signatory of the Paris agreement on climate change, lower its greenhouse gas emissions, diversify its economy and its reduce its reliance on imported oil.
But what does Indian’s energy plan mean for the rest of the world?
Cheaper wind and solar power
India’s surge of investment in renewable energy has played a role in the global fall in the cost of solar power, making the technology cheaper than coal.
Market analysis firm GTM Research found that India’s system of tenders has produced extremely competitive bidding and, as a result, pushed the cost of solar to extreme lows, with PV system pricing across the country now in the region of 65 cents per watt. In comparison, China is around 11 cents per watt higher.
The falling cost of solar hasn’t been restricted to India, but is part of an ongoing global trend. As supply has increased, costs have come down. Over the last decade manufacturers, developers and engineers have all become more efficient in their delivery of solar panels and projects. As India moves along the path to a larger penetration of renewables, it will further drive down the global cost of both solar and wind technologies.
Investment and business opportunities
In May 2017, India overtook the US to take the second spot on a list of the world’s most attractive renewable energy markets for investors. In its annual ranking of the world’s top markets for investing into renewable energy, Ernst & Young named China the world’s most attractive market, followed by India.
As the country upgrades its energy systems, transportation, city and industrial infrastructure, India is presenting a trillion-dollar opportunity for domestic and international investors and businesses.
The cost of delivering India’s energy transition could reach $1 trillion by 2030, India’s power minister told the World Future Energy Summit at Abu Dhabi Sustainability Week in January 2017.
Investment in India’s renewable energy is expected to create more than 330,000 jobs in construction, project commissioning and design, business development, and operations and maintenance, the World Resources Institute has estimated.
Delivering major renewable energy projects across the country will result in India becoming a major hub for industry leadership and expertise. This could lead to the delivery of international projects, enabling India to become a leading international clean energy developer.
Joint projects and knowledge sharing
Undertaking joint energy and infrastructure projects can reduce economic risks associated with delivering major projects, while knowledge sharing can drive technological advances and improve efficiencies.
For example, countries like Russia are entering the initial stages of developing a renewable energy market. Through its nuclear programmes, India and Russia have a strong relationship in place, which could allow knowledge transfer to support Russian companies and regulatory bodies to further understand how to organise auctions for the selection of production capacities and advise how these may be integrated into the energy network.
Partnerships like these will be another key element for helping to drive down the cost of renewable energy and further support the adoption of cleaner forms of generation.