- IEA report on India sees solar power leading the country’s energy transformation to a clean energy future
- By 2040, under the current policy framework solar power capacity is likely to add up to over 724 GW
- As the country’s future energy demand is to come from buildings, factories, vehicles and appliances among other sectors, the IEA believes strong policies and increased investment in clean energy will be crucial to set India on a sustainable course
In its latest report on the Indian market—India Energy Outlook 2021—the International Energy Agency (IEA) sees solar power set for rapid growth matching coal’s share in the country’s total energy generation mix by 2040 under the Stated Policies Scenario (STEPS). It could be sooner in the Sustainable Development Scenario (SDS), it remarks, since ‘projections in the STEPS do not come close to exhausting the scope for solar to meet India’s energy needs, especially for other applications such as rooftop solar, solar thermal heating, and water pumps’.
Along with STEPS and SDS, the report presents analyses of India’s power generation capacity under India Vision Case (IVC) which assumes rapid resolution of COVID-19 related public health crisis and complete realization of India’s stated energy objectives, accompanied by a faster pace of economic growth, compared to the STEPS.
By 2040, the cumulative installed solar power capacity of India would add up to 724 GW under STEPS, to 806 GW under SDS and to 783 GW under IVC scenarios. Under STEPS, between 2035 and 2040 alone the report anticipates 321 GW addition. On the other hand, coal fired capacity starts to fade out beginning 2025-2030. Solar will be supported by wide-scale deployment of batteries estimated at 140 GW ‘largest of any country’. By 2040, solar PV market of India could be worth $10 billion.
From accounting for 4% of India’s power generation capacity in 2020, the IEA sees its clout growing to 31.4% in 2040, while coal power’s share comes down to 34.3%, down from 68.1% in 2020.
The IEA analysts see this growth of solar driven by the country’s ambition to reach 450 GW renewable capacity by 2030 with the chunk coming from the ‘extraordinary cost-competitiveness’ of solar, even when paired with battery storage. However, they caution that to keep up the momentum behind investments in renewables is to tackle risks related to delayed payments to generators, land acquisition, and regulatory and contract delivery.
India is likely to experience the largest increase in energy demand of any country over the next 2 decades with its energy future dependent on buildings and factories yet to be built, and vehicles and appliances yet to be bought. Under STEPS, it sees close to 60% of India’s CO2 emissions in late 2030s to come from infrastructure and machines that are do not exist today. “To meet growth in electricity demand over the next twenty years, India will need to add a power system the size of the European Union to what it has now,” according to the report.
This, it points out, is an opportunity for the government to formulate strong policies, encourage technological leaps and make ways to increase investment in clean energy, to steer the country on a secure and sustainable course.
“Government policies to accelerate India’s clean energy transition can lay the foundation for lasting prosperity and greater energy security. The stakes could not be higher, for India and for the world,” said IEA Executive Director Dr Fatih Birol. “All roads to successful global clean energy transitions go via India.”