By Business India Editorial

Policy support from the government and low-cost capital are key to meeting India’s ambitious targets of reduction of carbon emission, said a report by Moody's Investors Service. 

A significant shift in India’s energy mix towards renewable energy will play an important role in meeting the country’s mid- to long-term emissions reduction targets, it said. 

The key enabler will be the competitiveness of wind and solar generation over coal-fired power generation because of technological developments, supportive government policies and participation by the private sector, it said. Improving the economics of storage solutions for renewables would add an impetus.

Access to low-cost, long-term capital from the public and private sectors will be vital to achieving these goals.

“Renewable energy will play a significant role in meeting India’s net-zero targets. The Indian government’s plan to reach net-zero emissions by 2070 is contingent upon a shift in the fuel mix from the current predominantly coal-fired power toward clean and renewable energy,” said the Moody’s report.

By 2030, India aims to increase its renewable energy capacity to 500GW from 157GW as of March 2022 and to have 50 per cent of the electricity generation from non-fossil fuel sources..

Supportive government policies are a prerequisite for the continued significant growth of renewable energy capacity, it said, adding that with India aiming to more than triple its renewable energy capacity by 2030, continuous policy support from the government is key. 

In the last 4-5 years, India has expanded its renewable energy footprint significantly and that was helped by supportive government policies that encouraged the domestic private sector and overseas investors to participate in the sector.

Also, access to low-cost, long-term and diversified capital will determine success in meeting 2030 renewable targets. India will require $225 billion-$250 billion in investment over the next eight years to meet its 2030 targets, and a key driver to meeting these targets will be access to low-cost long-term capital, Moody’s said.