'India needs $500-700 billion in renewable energy'
Friday - August 16, 2019 6:32 pm , Category : BUSINESS
New Delhi, Aug 16 (IANS) India will require $500-700 billion in renewable energy and supporting grid investment over the coming decade in order to meet its renewable energy targets, the US-based Institute for Energy Economics and Financial Analysis (IEEFA) said on Friday.In a note titled 'International Capital Awaits Robust Policy Environment in India's Renewables Infrastructure Sector', it reviewed India's energy market and found some recent policy changes favourable for renewable energy investors.But it also noted with caution some sovereign risk issues that need to be resolved quickly.Author Tim Buckley, Director of Energy Finance Studies with IEEFA, said the world is looking to invest in India's renewable energy sector."There has been clear momentum in India's renewable energy capacity building in the last 24 months, leveraging the expanding opportunities in deflationary sustainable domestic projects," Buckley said in a statement to IANS."India is set to reach 144 gigawatts of renewable energy by the end of financial year 2021-22.""The country has a clear ambition to transition to a cheaper lower emission electricity system, and that ambition is attracting healthy global investment," he said.According to Buckley, global capital flows into India will accelerate as long as the Indian government provides a clear policy framework and puts in place measures to lower risks and protect investor confidence.The briefing note highlighted multiple examples of international investment in India's renewable energy projects, while also noting recent obstacles to India's renewable ambitions, including a slowdown in the tendering process, grid integration constraints, and issues with excessively aggressive tariff caps on reverse auctions.As a result, during FY2018-19 India failed to capitalise on the momentum built over the previous two years through record low solar and wind tariffs.Only 10.3 GW of renewable generation capacity was added in FY2018-19.Co-author Kashish Shah said the slowdown masks some very positive policy announcements recently which accelerated tendering activity in June 2019, post the general election."The proposed tariff policy revision and the payment security mechanism enhancements are both significant regulatory reforms, while removing the priority lending limit for the renewable energy sector will accelerate private bank lending to renewable energy infrastructure projects," Shah added.For global public and private debt and equity capital seeking steady long-term returns, there is a huge investment opportunity in India's electricity and transportation sectors to support the development of new generating capacity and grid development by 2030."India wants to meet its renewable targets while showing global leadership in setting a policy framework consistent with the Paris Agreement," Buckley added.
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