In a recently released report titled ‘India’s energy transition pathways: A net-zero perspective,’ jointly presented by FICCI (Federation of Indian Chambers of Commerce and Industry) and Deloitte on September 25, it has been revealed that India’s journey towards achieving net-zero emissions between 2022 and 2070 will come at a substantial cost of $15 trillion. The report was launched by India’s Minister for Power and New and Renewable Energy, RK Singh.
Annually, this ambitious undertaking will require an average investment of $300 billion, with a strong emphasis on innovative financing models to attract private sector investments alongside government and concessional funding.
The report underscores that India’s final energy demand is projected to double, reaching 1200 million Mtoe by 2070, compared to 2020 levels. However, it suggests that aggressive energy efficiency measures could help moderate this growth compared to business-as-usual scenarios.
The industrial sector is anticipated to account for 65-70 percent of total energy demand, while the transport sector, particularly passenger and freight, is expected to witness a 3-5x increase in demand. The adoption of electric vehicles (EVs) is predicted to mitigate the surge in energy demand.
The report identifies three primary pillars for India’s energy transition: Grid decarbonization, industrial decarbonization, and transport transition, which collectively target 90 percent of the country’s current emissions.
To support the growth of renewable energy, the report recommends relaxing restrictions on solar energy imports and expanding hydropower and nuclear energy capacities. However, it also highlights challenges in securing land for renewable energy and green hydrogen projects, emphasizing the need for efficient land acquisition processes and collaboration between the public and private sectors.
Additionally, the report emphasizes the importance of green hydrogen (GH2) adoption, as well as Carbon Capture, Utilization, and Storage (CCUS) capacity development. It suggests policy initiatives, ecosystem development, and innovative financing to bridge the cost gap between GH2 and other energy sources.
Finally, the report calls for a clear roadmap to phase out coal-based power stations and increase renewable energy capacity at a rate of 30-35 GW per year. It also highlights the need for a carbon tax to expedite the transition away from fossil-based energy sources and urges expansion of domestic renewable energy manufacturing capacity.
SK Pathak, Secretary General of FICCI, stressed the necessity for tailored decarbonization strategies for each industry sector and the expansion of domestic renewable energy manufacturing capacity, particularly in critical areas such as solar photovoltaic, battery storage, electrolysers, and green hydrogen.