Climate finance, international support key to India’s energy transition: report

India’s wind and solar power generation needs to grow five to six times by 2030 to align with the goal of preventing the world’s average temperature from exceeding that of pre-industrial times by more than 1.5°C, reaching 900–1200 terawatt hour (TWh), a report by Germany-based Climate Analytics and New Climate Institute has said.
India would at the current pace of rollout fall short of the needed capacity in 2030 for the 1.5°C alignment by 140 GW of solar and 70 GW of wind. India will require large-scale investment to help phase down coal power, accelerate renewables deployment, and drive grid expansion. The report said international support will be key in supporting the energy transition with climate finance.
India’s power sector remains heavily dependent on coal, which generated 75% of electricity in 2023. Further action will be necessary to transform the Indian electricity system into one powered predominantly by renewables.
At the 2023 United Nations Climate Change Conference (COP28), governments agreed to triple global renewable capacity by 2030. The report highlighted the potential implications of this pledge at the national level including for India.
“High-income countries will need to provide substantially increased climate finance to support emissions reduction abroad, in line with their ‘fair share’ of climate action. Achieving these benchmarks in lower-income countries is therefore a global responsibility, rather than a domestic responsibility,” the report said.
The report said fossil fuels must exit the Indian power sector before 2045 if India is to align with the 1.5°C goal. Fossil fuel generation must fall by 20 to 44% between 2022 and 2030.
India’s current nationally determined contribution is to cut emissions intensity by 45% below 2005 levels in 2030. India has also pledged to become net zero by 2070.
The current renewable targets are 319 GW of solar power and 110 GW of wind by 2030, as per the Indian National Electricity Plan 2022. Under current policies and market conditions, the International Energy Agency estimates that solar capacity will reach 238 GW in 2028, up from 83 GW of solar in 2022. Wind capacity is projected to reach 69 GW in 2028, up from 42 GW in 2022.
The report said 11 countries account for over 70% of current wind and solar power. The technologies need to grow five-fold by 2030 (three times faster than current yearly rates) and eight-fold by 2035 to meet global climate goals.
China achieved its 2030 target to install 1.2 TW of wind and solar capacity six years early. “Maintaining this accelerated growth could see the country install the 4.5 TW of wind and solar needed by 2030 to limit warming to 1.5°C. While China’s carbon emissions are set to peak, wind and solar need to grow even faster than rapidly growing electricity demand to force out large volumes of coal in the power sector,” the report said.
The report underlined that developing countries cannot achieve their renewable energy goals without action on climate finance, which is central to driving the clean energy transition. It said a global energy transition, which leaves no one behind, is achievable with coordinated action from both emerging markets and developing economies and the wider international community.
HT reported on September 17 that there is no consensus on the most critical COP29 negotiated agenda on a fair and ambitious New Collective Quantified Goal (NCQG) on climate finance.
The new financial goal is to be set from the floor of $100 billion for the post-2025 period. People aware of the matter said the two major outstanding issues on NCQG are the quantum of the fund and the list of “contributors.”
Developed countries are pushing to expand the contributor base to the fund by inducting emerging economies (not necessarily historical polluters) into the list of contributors. “They are not ready to budge,” an official said.
Developing countries are clear that they will stick to the provisions of the Paris Agreement and the United Nations Framework Convention on Climate Change, which state that finance must flow from developed to developing countries. Developing countries expect contributions in the trillions annually from developed nations for climate change mitigation efforts as defined in their nationally determined contributions.
Apart from climate finance needed for transition, land conflicts, lack of access to land to set up solar and hydro projects, and population density are likely to pose a serious challenge to India’s target of achieving net zero emissions by 2070, the Council on Energy, Environment, and Water flagged in a study this month.
While the country has a renewable energy potential of over 24,000 GW, even reaching the 7,000 GW required to achieve net-zero emissions by 2070 will require a holistic approach to address challenges such as land access, climate risks, land conflicts, and population density, the study said.