The world is witnessing a paradigm shift in energy systems, driven by the need to decarbonize and the growing realization of the benefits of clean energy. India has been at the forefront of this transition, with significant investments in renewable energy and green mobility. This post aims to provide an overview of India's renewable energy and green mobility opportunities and compare them to other economies, highlighting why it's the right time to invest in India.
Renewable Energy in India:
India aims to achieve 450 GW of renewable energy capacity addition by 2030, and the government has implemented various policies and incentives, such as subsidies, tax incentives, and preferential tariffs, to support renewable energy development. It has abundant potential for renewable energy, especially solar and wind energy, with an average of 300 sunny days per year and an estimated 302 GW of wind energy potential, including offshore wind energy.
The country's renewable energy market size is expected to reach USD 73.1 billion by 2025, growing at a CAGR of 22.7% during the forecast period. The market size growth in India's renewable energy sector is driven by several factors, including the increasing demand for electricity, growing awareness of environmental issues, and declining renewable energy prices.
India's renewable energy sector has been growing rapidly, adding 9.9 GW of renewable energy capacity in 2020, despite COVID-19 challenges. Solar energy accounts for the majority of the renewable energy capacity, with wind energy and bioenergy also making significant contributions.
India has also participated in global initiatives such as the International Solar Alliance, which aims to promote solar energy adoption worldwide. The country has taken a leadership role in the alliance, hosting its headquarters in Gurugram and providing financial support to member countries.
The UNDP has also supported India's renewable energy goals, providing technical assistance and financing to help the country achieve its targets.
Green Mobility in India:
India's transportation sector contributes 14% of the country's total greenhouse gas emissions, and to address the issue, the government has implemented policies to promote green mobility, including the National Electric Mobility Mission Plan (NEMMP) and the Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles (FAME) scheme. According to the International Energy Agency (IEA), India is projected to become the world's largest growth market for energy by 2040, with demand expected to double by that time.
As a member of the G20's Energy Efficiency Action Plan since 2016, India aims to increase energy efficiency and reduce greenhouse gas emissions in the transport sector. The World Bank has also provided financial support for India's green mobility initiatives, including a USD 500 million loan for the National Solar Mission and USD 300 million for the Green Energy Corridors Project, as well as technical assistance for the development of electric vehicle infrastructure and policy frameworks.
With a large and expanding middle class and a robust manufacturing sector, India has significant potential for green mobility, and many automobile manufacturers are investing in electric vehicle manufacturing. The market for green mobility in India is projected to grow at a CAGR of 33.1% during the forecast period, reaching USD 14.1 billion by 2025.
Electric vehicle sales have increased rapidly in recent years, and the government aims for them to make up 30% of all new vehicle sales by 2030. This target is expected to drive demand for EVs and encourage the development of charging infrastructure.
Comparing India to Other Economies:
India's renewable energy and green mobility opportunities are comparable to other economies, particularly those in Asia. China, for example, has set ambitious targets for renewable energy capacity addition and is a global leader in EV manufacturing. However, India's renewable energy potential is significant, with solar and wind energy potential comparable to that of China. India's EV market is also growing rapidly, with significant potential for further growth.
In Europe, countries such as Germany and Spain have been leaders in renewable energy, particularly in solar and wind energy. However, India's potential for renewable energy is much greater, with higher solar radiation and wind energy potential. India's green mobility opportunities are also significant, particularly in the two-wheeler segment, which accounts for a significant share of the country's transportation sector.
Why now?
India's renewable energy and green mobility opportunities are significant, driven by the country's ambitious targets and supportive policies. The renewable energy potential, particularly for solar and wind energy, is significant, and the country has already made significant progress in adding renewable energy capacity.
The green mobility opportunities are also significant, driven by the country's large population, growing middle class, and supportive policies. The government's target of 30% electric vehicle sales by 2030 is ambitious but achievable, and is expected to drive demand for EVs and support the development of charging infrastructure.
Investing in India's renewable energy and green mobility sectors is a sound decision, given the country's significant potential and supportive policies. While other economies may have more established renewable energy and green mobility sectors, India's potential for growth is much greater.
About the Author:
Lavanya Raja, Chief Economist & Co-Chair GIO Business Chamber.
In her writing, she explores the Indian economy and its potential for the Indian diaspora worldwide, providing in-depth analyses of specific sectors supported by data to facilitate informed decision-making.