Expensive but necessary: A report by consultancy firm McKinsey and Company highlights the high cost of India's net-zero transition. Photo: Blue Ocean Network

India needs to spend 11% of GDP to meet green targets, 40% spending needs to be in RE: McKinsey

Consultancy firm McKinsey said India would have to spend an average of $600 billion annually for the next 30 years, or around 11% of its GDP, in order to achieve net-zero emissions by 2050. The report said annual capital expenditure on physical assets in India would rise from around $300 billion in 2020 to an average of $600 billion between 2021 and 2050. Much of the money will be used to expand renewable energy capacity and reduce the use of coal-fired power plants.

India may also have to invest more than other countries in climate adaptation measures given its relatively high physical risk exposure to climate change, the report added. For net-zero transition, spending on physical assets for energy and land use systems will cost $9.2 trillion per year on average between 2021 and 2050, or cumulatively $275 trillion globally. This means an annual increase of $3.5 trillion from current levels.

IREDA gets Rs1,500 crore, SECI Rs100 crore equity boost, PFC, REC cut lending rates to 8.25%

In a major boost to the RE sector, the government cleared Rs1,500 crore for the state-owned financier of renewable projects the Indian Renewable Energy Development Agency (IREDA). This will enable IREDA to lend Rs12,000 crore to the renewable energy sector. The company works as a specialised non-banking financing agency for the renewable energy sector. 

State-owned lenders like the Power Finance Corporation and Rural Electrification Corporation have cut interest rates for long term loans to renewable energy projects to 8.25%.

The government also approved an equity boost of Rs10 billion ($134.11 million) for Solar Energy Corporation of India (SECI). This will enable SECI to float 15 GW of RE tenders annually, the government said. 

Reliance to set up 100 GW RE projects in Gujarat over the next 10-15 years

Reliance Industries Limited is set to invest Rs5.6 lakh crore (more than $75 billion) for green energy projects in Gujarat. The company will take more than 10 to 15 years to set up a 100 GW renewable energy project and a green hydrogen ecosystem, PV Magazine reported. Reliance Industries has already started scouting land for a 100 GW renewable energy power project in Kutch, Banaskantha, and Dholera. It has sought 4.5 lakh acres of land in Kutch. 

The company will invest another Rs60,000 crore ($8.1 billion) to set up manufacturing units for RE equipment such as solar modules, electrolysers, energy-storage batteries, and fuel cells.

Newly added installed capacity of China’s wind and solar power exceeds 100 GW in 2021

China’s installed capacity of wind and solar power has been expanded by more than 100 GW in 2021, China’s state broadcaster, CCTV reported. According to the data from the National Energy Administration, the state energy regulator, the installed capacity of China’s offshore wind power has risen to “the world’s number one” after the nation installed 16.9 gigawatts (GW) of new capacity last year. China’s current offshore wind capacity stands at 26.38 GW. 

China built more offshore wind capacity in 2021 than the whole world in the past five years, reported City AM. Newly installed RE projects and industrial raw materials producers are now exempt from the energy volume and intensity caps, China’s cabinet state council said in December 2021.

A new report from the International Energy Agency (IEA) stated renewable energy will meet more than 70% of China’s “additional” electricity demand in the next three years. 

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