India is committed to meeting and surpassing its National Determined Commitments (NDC) under the Copenhagen Accord for the reduction in energy intensity and capacity addition of non-traditional fuel capacities well ahead of time. As per the updated NDC, India is now committed to reducing the emissions intensity of its GDP by 45 percent by 2030, from the 2005 level, and achieving about 50 percent cumulative installed electric power capacity from non-traditional fuel-based energy resources by 2030 while also transitioning to a net zero economy by 2070. The country is moving towards achieving its 2030 and 2070 targets through the design of relevant programs and schemes, but several challenges still need to be addressed, which are limiting its progress in decarbonizing the economy and meeting its NDC targets. Most of these challenges lie in the domain of energy and deal with the way we produce, transform, transport, and consume energy. Therefore, it is crucial to identify areas that are creating challenges for a People Centric Energy Transition while moving to strengthen the policy, regulatory, institutional, and market frameworks that promote energy sustainability and security.
In 2022, the world witnessed an unprecedented milestone in its journey towards a sustainable future when global financial commitments for clean energy and energy transition soared to a remarkable US$1.3 trillion, marking it as a historic high-water point. However, despite this promising achievement, the current trajectory of investments falls significantly short of the quantum needed to meet the planet’s ambitious climate and energy transition targets set globally as a part of the Paris Agreement. While India has made commendable strides towards its clean energy and energy transition goals, there remains a substantial gap between what is needed and what is committed and available. By 2030, India aims to scale its non-traditional energy capacity to 500 gigawatts (GW), reduce projected emissions by an astonishing one billion metric
tons, and slash carbon intensity in the economy by more than 45%. Achieving these momentous objectives entails an estimated investment of US$2.5 trillion between 2015 and 2030, translating to approximately US$200 billion annually.
Taking this target further, the cumulative investment required to usher in India’s net-zero target by 2070 stands at an awe-inspiring US$10.1 trillion. With this background, this communique serves to address the pressing challenges in accessing financing for clean energy and endeavors to pave the way for an enabling mechanism that will galvanize the flow of capital into the clean energy sector.
This chapter has been co-authored by CPI, IIFA and ADB.