India's Ambitious Net-Zero Plans: Balancing Growth with Sustainability

A recent joint report by Moody's Ratings and ICRA emphasizes the imperative need for India to make substantial investments to meet its ambitious 2070 net-zero emissions objectives, especially within the power sector. The report predicts that over the next decade, these investments will account for 2% of the nation's real GDP, focusing on the electricity value chain, which includes power generation, storage, transmission, and distribution.

Despite India's booming economy, the country's short to medium-term energy strategy will still heavily rely on coal. The report forecasts a 32-35% increase in coal-based capacity generation, approximately 70-75 GW, over the next decade. Simultaneously, India plans to add 450 GW in renewable energy capacity. Abhishek Tyagi, a Moody's Vice President and Senior Credit Officer, stated that while the private sector will remain deeply invested in renewable energy, government entities are expected to play a more significant role as well.

Tyagi further elaborated on the power landscape, noting that solar and wind energies are anticipated to lead the expansion in generation capacity over the next 20-25 years, with additional albeit smaller contributions from nuclear and hydropower. The report also signals a near-term deceleration in road project development despite considerable budget provisions. Meanwhile, ports and data centers are emerging as crucial growth sectors, backed by the government's Maritime India Vision 2030, which is poised to enhance port capacities significantly. However, fluctuating global trade patterns and tariff debates continue to pose challenges.

(With inputs from agencies.)