Climate action: Clean energy needs an active carbon market

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renewable power projects. Among others, Siemens Energy is looking to sell the wind-turbines unit of its local subsidiary, Shell is scouting for investors in Sprng Energy and Renew is in talks to hawk some of its solar assets. An over-supply of climate-friendly generators of electricity suggests that deals will be struck at weaker valuations than sellers would like, with saleability likely to hinge on project viability, market conditions and the risk-return profile.

Meanwhile, project tenders issued in 2023-24 indicate that greenfield investor interest in clean gigs ran at 69 gigawatts (GW) of capacity, well above the rate of 50GW per year needed for India to meet its 2030 goal of 500GW from renewables. Some companies are in the business of setting up and selling off generators to re-invest in new ones. Unless secondary demand for these assets picks up, however, we risk the financial equivalent of a power cut.

For all the buzz of action in our power sector, it still presents a dismal picture overall. The power ministry’s website says that India has 418GW of installed capacity. About 237GW of it is housed in thermal plants that burn fossil fuels (mainly coal) to create steam and drive turbines, almost 47GW is from watermills in dams, and nearly 110GW of the total is attributed to windmills and solar panels.

Yet, as seen in recent years, the Centre begins to huff and puff over coal supplies to prevent power cuts as soon as peak demand reaches the level of our thermal capacity. Last summer, demand peaked at an estimated 221GW. This year, it may exceed 240GW.