India's target of renewable energy capacity of 500 gigawatts by 2030 requires an annual capacity addition of around 44 gigawatts, for which India will require $190-215 billion of investment over the next seven years, according to Moody's.
Furthermore, the ratings agency also states that the investments within the power sector will be driven by obviously renewable energy as well as transmission projects.
Renewable Energy Dominates Capacity Additions
Renewable capacity addition has grown at an 18% compounded annual growth rate from 2014 to 2024, according to data from the Ministry of Power.
Over the next six to seven years, Moody's expects to see the same momentum. The agency states that renewable energy projects will be the largest contributors to India's new power generation capacity.
To add the required 310 gigawatts of additional renewable energy capacity over the next seven years, the global research and rating firm estimates a total investment of $190–250 billion, or $36 billion annually.
India's Electricity Grids
To cater to this kind of growth in renewable energy capacity, India will need more electricity grids — transmission and distribution infrastructure. Investments in this sector will allow for optimal integration of renewable energy with demand centers.
According to Moody's, insufficient transmission capacity would increase the risk of renewable energy curtailment, impacting project cash flows and future investments in the sector.
Investment In Transmission Sector
India's electricity T&D network size needs to grow by 24–40% by 2030. Moody's expects investments in the total grid (including storage) to be in the range of $150 billion to $170 billion over the next seven years, according to the International Energy Agency.
India will award $50 billion worth of transmission projects in the next 7-8 years, Pratik Agarwal, managing director of Sterlite Power told NDTV Profit.
India will award $12–14 billion worth of transmission projects in 2024, he said.
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