Increased Support Needed to Achieve India's Clean Energy Goals

New Delhi, December 17, 2024-India is on track to achieve many of its 2030 clean energy goals but needs to step up government support measures to accelerate the deployment of offshore wind, electric vehicles (EVs), and green hydrogen (GH2), according to a new report.

The Central Government has set ambitious goals to ramp up a range of clean technologies by 2030 as part of its strategy to increase energy independence, energy security, and energy access while promoting industrial development and reducing air pollution and greenhouse gas emissions.

The report from the Center for Study of Science, Technology and Policy (CSTEP) and the International Institute for Sustainable Development (IISD), titled, Budgeting for Net Zero: Government support needed to meet India's 2030 clean energy goals, finds that India's current government support measures are on track to reach goals for solar PV and battery energy storage systems (BESSs), driven by government subsidies and policy support. No additional direct financial support is required, but regulatory reforms and accelerated auctions are essential to maintain momentum.

However, emerging technologies like offshore wind and GH2 require immediate additional and sustained investment to reach cost competitiveness.

"India's clean energy ambition is remarkable, and delivering on these goals will require bold investments and policy alignment," said Swasti Raizada, Policy Advisor at IISD and co-author of the report. "Emerging technologies like offshore wind and green hydrogen represent transformative opportunities for the country's energy landscape but need sustained support to realize their potential."

Offshore wind accounts for the largest cost gap and current levels of government support fall short in bridging it. The cost gap identifies how much the cost of a clean technology needs to drop to reach cost parity with conventional equivalents (such as thermal power and internal combustion engine vehicles) and meet the clean energy goal for a specific technology. To tap into India's 71 GW of offshore wind potential, additional government support of at least ~INR 9,000 crore per GW (~USD 1.08 billion per GW) will be needed.

The cost gap analysis is useful to inform future government support. The report finds that current financial support by the Central Government for solar PV and BESS is sufficient to fully cover the cost gap till 2030 of INR 14,500 crore (USD 1.76 billion) for solar PV and INR 2,637 crore (USD 0.3 billion) for BESSs respectively.

For other technologies, the cost gap until 2030 is much higher: INR 19,000 crore (USD 2.29 billion) for electric two-wheelers, INR 2.8 lakh crore (USD 34 billion) for GH2, and INR 5.1 lakh crore (USD 61 billion) for offshore wind.

The report underscores the urgent need for both central and state governments to act now, noting that small but early investments in clean energy technologies will crowd in much larger private investments and yield long-term economic and environmental benefits. Achieving clean energy goals will drive economic growth, job creation, and increased public revenue while reducing greenhouse gas emissions and air pollution.

"Investing now in clean energy technologies, even for high-cost sectors like offshore wind and green hydrogen, will ensure India's global competitiveness and long-term economic and environmental resilience," said Anasuya Gangopadhyay, Senior Associate at CSTEP and co-author of the report.

Media contacts

Swasti Raizada, Policy Advisor, IISD: [email protected]

Aia Brnic, Communications Manager, IISD: [email protected]

Anasuya Gangopadhyay, Senior Associate, CSTEP: [email protected]

About CSTEP

CSTEP is one of India's leading think tanks, with a mission to enrich policy-making with innovative approaches using science and technology for a sustainable, secure and inclusive society. CSTEP's interdisciplinary research encompasses diverse fields such as energy, climate, and air pollution. CSTEP is involved in solving some of the grand challenges India faces currently. Our cutting-edge research combines emerging technologies and artificial intelligence with rigorous modelling studies and data analyses to provide effective solutions for complex developmental issues prevailing in the country.