The report highlighted that this figure is a conservative estimate based on India’s goals for renewable energy generation. It also projects that India’s energy demand will grow at a compound annual growth rate (CAGR) of 7 per cent between FY24 and FY30, which is higher than the country’s historical growth rate of about 5 per cent.
“Based on our conservative estimate, RE generation should drive incremental investments of approx. USD200bn to meet India’s targets” said the report.
The report also stated that this rise in energy demand in the country will be driven by the expansion of data centers, increasing electric vehicle (EV) penetration, and advancements in green hydrogen technology.
These factors could lead to an even greater demand for renewable energy than currently anticipated.
India’s installed power capacity is expected to rise at a 10% CAGR over FY24-FY30F to 777.1GW from 450.8 GW currently. In FY24, as per the report the country auctioned 40 gigawatts (GW) of RE capacity. However, to meet the country’s ambitious goal of 500GW of renewable energy capacity by 2030, the report added that the pace of RE auctions will need to increase significantly, with approximately 60GW of capacity needing to be auctioned each year. It said “we believe the pace of RE auctions will have to materially pick up to approx. 60GW/year”.
The report suggested that the industry is well-positioned to meet this rising demand, especially with favorable prices for solar modules and wind turbines.
As per the report, the key drivers of this growth include supportive government policies and a strong push from the commercial and industrial (C&I) sectors to adopt greener energy solutions.
Moreover, when the cost of producing green hydrogen becomes competitive with grey hydrogen, the demand for renewable energy is expected to grow even more rapidly, potentially exceeding current projections. Currently, India’s total hydrogen demand is 6mn tons, primarily from refineries (3mn tons), fertilizers (2mn tons), and steel (1mn tons
On the demand for electricity from EVs the report estimated that electricity demand in the country will grow significantly over the coming years.
By the end of FY25, EVs are expected to account for around 3.4 terawatt-hours (TWh) of electricity demand, making up just 0.2 per cent of the country’s total power consumption.
However, with the government aiming for 100 per cent EV sales for new vehicles by 2030, demand is projected to rise sharply.