India's net-zero transition offers $12.7 trillion investment opportunity: Report
reliance on coal continues to be the largest contributor to India's greenhouse gas emissions. BloombergNEF's analysis reveals that the most cost-effective strategy for India to simultaneously enhance electricity access and decarbonize its power supply is to maximize the deployment of solar and wind energy. This approach, supplemented by nuclear power, energy storage, and carbon capture and storage (CCS) for thermal power plants, offers a sustainable solution.
In the NZS, wind and solar power capacity is projected to increase thirty-fold, reaching 2,998 gigawatts by 2050, with wind and solar contributing to 80% of the electricity supply. Nuclear power accounts for 9%, while the remainder is sourced from hydro, biomass, hydrogen-fired thermal plants, and thermal power plants equipped with CCS. Even under the ETS, solar and wind are expected to dominate electricity generation in 2050, comprising 67% of the total.
To achieve these targets, enhancing the grid's flexibility to accommodate variable wind and solar power is crucial. Solutions include batteries, pumped hydro storage, and peaker gas plants, as outlined by Rohit Gadre, India Research Senior Associate at BNEF. Under the ETS, an investment of $7.6 trillion is projected in energy supply and demand from 2022 to 2050, averaging $262 billion annually.
To align with the NZS and reach net-zero emissions, investment levels need to increase by 1.7 times, reaching an average of $438 billion annually, equivalent to approximately 5% of the expected gross domestic product, and totaling $12.7 trillion by 2050. Significantly, investment in fossil-fuel power decreases from $317 billion in the ETS to $142 billion in the NZS. To mitigate emissions from the remaining use of fossil
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