ICRA sees up to $500B in investments needed to achieve India’s COP26 goals

January 6, 2022 |

In India, the Indian Credit Ratings Agency, ICRA, in its recent research report, has analyzed India’s COP26 commitment in two phases – up to 2030, and the net zero target for 2070. Being a developing country, which is at an inflection point in terms of its energy consumption, the nation’s per capita energy consumption is expected to surge 3x-4x over the long term. Parallel to this, India has also committed to reduce greenhouse gas (GHG) emissions by 1 billionn metric tons by 2030. The country has additionally committed to a net zero carbon emission target by the year 2070, by when the per capita energy consumption would have surged from current levels.

Rohit Ahuja, Head of Research and Outreach, ICRA says, “In order to achieve the net zero target by 2070, a focused roadmap would be required. It calls for timely interventions by the government and large capex/investments in GHG emitting sectors like power, industry and transport. These sectors together emit ~90% of CO2 as per 2019 data of International Energy Agency. Ambitious targets for COP26 opens massive investment opportunities across segments stemming from 500 GW renewables by 2030, higher EV penetration (~10% by 2025), 20% ethanol blending for petrol (~3x increase from current levels), improvement in energy efficiencies (battery storage, smart cities, etc.) and improvement in carbon capture from enhancing green cover and use of advanced technologies. This would be a daunting task and would need massive policy interventions to ensure investments across aforementioned sectors remain profitable enough to sustain well beyond 2030.”

The ICRA research report notes that as per the government’s five key investment areas, an incremental addition of 5x in non-fossil fuels power generation capacity by 2030 is required for which India would need about $450-500 billion investments including investment towards transmission infrastructure and storage capabilities.

Category: Policy

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