Study Says Clean Energy Transition Could Save India $19.5 Billion Annually By 2025

According to a recent study by Global Energy Monitor, India has the potential to save up to $19.5 billion annually by achieving its goal of adding 76 GW of utility-scale solar and wind power by 2025.

India has been ranked among the top seven countries globally in terms of prospective renewable power, according to a report that analyzed data from the Global Solar Power Tracker and the Global Wind Power Tracker.

The report states that the implementation of this build out can prevent the use of nearly 78 million tons of coal per year, or around 32 GW in coal power plant capacity. This is equivalent to more than the amount of new coal capacity added in the country since 2018.

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“Annual savings in India can skyrocket if the coal-to-clean switch matches the country’s ambitions. India plans to add an additional 420 GW of wind and solar power by 2030, which would increase the annual savings from avoiding coal power to more than $58 billion, with total savings reaching $368 billion by 2030,” the report noted.

“If India were to bring online all of its planned utility-scale solar and wind projects, it would cost roughly $51 billion. But with a US$19.5 billion annual savings in direct fuel costs, India could pay for this in just two and a half years,” it added.

India ranks among the top four countries globally in terms of prospective utility-scale solar power capacity, behind only China, the US, and Australia. Additionally, India is placed 17th in the world in terms of prospective wind power capacity.

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Shradhey Prasad, project manager for the Global Wind Power Tracker adds that “Costs for solar and wind power continue to plummet, and compared to volatile fossil fuel prices, renewables present a far better option for building new energy infrastructure,” he added.

Hurdles India is Currently Facing for Renewable Energy

India has fallen short of its target to install 175 gigawatts of renewable energy in its overall power production by 2022. In order to meet its new ambitious target of installing 450 gigawatts of renewable energy by 2030, India must accelerate its efforts in the clean energy sector at a significantly faster pace than it currently is. However, most estimates currently place the best case scenario for Solar at 18 GW , and Wind at 3-4 GW for the period until 2025. Per annum, that is.

Creating financing for green energy targets is a significant challenge as it requires significant investment to develop and implement clean energy projects. Additionally, acquiring land for clean energy projects is a significant issue as there is often strong resistance from local communities who may be unwilling to relinquish their land for these projects. Furthermore, building energy storage infrastructure and enacting more progressive policies to support clean energy initiatives can also be a significant hurdle for governments at both the central and state levels. To overcome these challenges, governments and private sector organizations need to collaborate and work together to develop innovative solutions and strategies that can help to overcome these obstacles.

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India’s goals for renewable energy

In 2021, Prime Minister Narendra Modi announced that India aims to achieve net-zero emissions by 2070. To support this goal, the country has also announced plans to increase the use of non-fossil fuel sources to meet half of its electricity needs by 2030. Despite this commitment, India’s current energy mix is still heavily reliant on coal, which currently accounts for 44% of the country’s primary energy sources and 70% of its power generation.

India’s coal-fired power plants have an average age of 13 years and the country has proposed an additional 91,000 MW of coal capacity. However, according to the Centre’s Draft National Electricity Plan 2022, the share of coal in India’s electricity generation mix is expected to decrease to 50% by 2030, down from the current 70%. Renewable energy currently accounts for approximately 10% of India’s electricity needs.