The Indian renewable energy sector is the fourth most attractive renewable energy market in the world. Installed renewable power generation capacity has gained pace over the past few years, posting a CAGR of 17.33% between FY16-20. With the government’s increased support and improved economics, the sector has become attractive from an investor’s perspective. As India looks to meet its energy demand on its own, which is expected to reach 15,820 TWh by 2040, renewable energy is set to play an important role. The government plans to establish a renewable energy capacity of 523 GW by 2030. As of July 2021, India had 96.96 GW of renewable energy capacity and represents 25.2% of the overall installed power capacity, providing an excellent opportunity to expand green data centres.
Worsening air pollution has been amongst India’s most pressing problems in recent years. Toxic air is a massive health and environmental concern and takes a substantial economic toll: it impedes development and affects people’s welfare. In 2019, air pollution led to about 18 percent of all deaths in the country. In the same year, it resulted in an economic loss of approximately 1.4 percent of GDP. Studies have identified the severely negative impacts of air pollution across many sectors, including labour productivity and crop yields. Uttar Pradesh, Maharashtra, Bihar, West Bengal and Rajasthan account for over 50 percent of deaths attributed to air pollution in India. Long-term exposure to particulate matter (PM) 2.5 is a significant risk factor leading to fatalities. Uttar Pradesh has an annual average of particulate pollution at 182.9 μg/m3, the second-highest after Delhi. The ICMR study suggested the central and state governments allocate sufficient long-term funding to prevent the adverse health impacts of air pollution, improving health as envisioned in the sustainable development goals.
Renewables could supply four-fifths of the world’s electricity by 2050, massively cutting carbon emissions and helping to mitigate climate change. But solar and wind power must be fully integrated, with sustainable bioenergy providing another crucial part of the mix.
All this means speeding up innovation in business and technology. Above all, it means taking action to promote renewable energy today. Many countries have taken various steps to keep things in check. In Japan, installed renewable capacity increased from 3.4GW in 2000 to 81.9GW in 2020, growing at a CAGR of 17.3%. By 2030, the cumulative renewable capacity is expected to rise to 165.3GW, growing at an impressive CAGR of 7.3% from 2020 to 2030. The Japanese government focuses on renewable power to reduce the reliance on nuclear power and reduce the massive cost of importing natural gas, coal, and oil. In New Zealand, roughly 84% of the electricity was produced from renewable sources. This large amount of renewable energy production ranks the country second in the world for energy security. Hydro, geothermal, wind and bioenergy are among the largest producers of electricity. New Zealand’s geothermal energy represents more than half of the renewable energy. New Zealand’s goal is to have 100% renewable energy by 2030.
Investments in the renewable energy sector in India are seeing growth again following the slowdown in the previous financial year due to the onset of the coronavirus disease pandemic. Between April and July this year, investment in the Indian renewable energy sector reached US$6.6 billion, surpassing the US$6.4 billion level record in the 2020-21 fiscal year. The study’s findings projected that the investments could potentially breach the US$8.4 billion milestones achieved in the 2019-20 financial year before the pandemic struck. In April 2020, Vikram Solar bagged a 300-megawatt solar plant project for Rs. 1,750 crores from National Thermal Power Corporation Ltd under the CPSU-II scheme in a reverse bidding auction.
A few other countries implementing policies within the renewable market sector are:
|Country||Policy change||Impact year|
|Brazil||Postponement of 2020 electricity auctions indefinitely||2023-2025|
|Chile||Delay of auctions from June 2020 to December 2020||2024-2026|
|China||Postponement of subsidy-free project application from February 2020 to April 2020||2022-2023|
|France||Delay of some solar PV auctions by six months||2021-2022|
|Germany||Delay in the selection of bidders in previous auctions||2022-2023|
|Portugal||Delay of 700 MW solar PV auction||2022|
The growing importance of sustainability-linked investments has also driven new investors to scout for renewable energy opportunities in India. In the four months to July, investments in the Indian renewable energy sector reached $6.6 billion, surpassing the $6.4 billion level for FY21 and are on track to quickly overtake the $8.4 billion total achieved in 2019-20 before the pandemic.
The Government is committed to increased use of clean energy sources and is already undertaking various large-scale sustainable power projects and promoting green energy heavily. In addition, renewable energy can create many employment opportunities at all levels, especially in rural areas. The Ministry of New and Renewable Energy (MNRE) has set an ambitious target to set up renewable energy capacities to the tune of 227 GW by 2022. About 114 GW is planned for solar, 67 GW for wind, and others for hydro and bio.