Thursday, October 10, 2024
HomeAll NewsGreen HydrogenIndia may miss net-zero emission target by decade unless it accelerates green...

India may miss net-zero emission target by decade unless it accelerates green hydrogen economy

India’s goal of achieving net-zero emissions by 2030 is contingent upon a significant boost in the green hydrogen sector, according to a report from S&P Global.

Current estimates suggest that the timeline for reaching this interim target could be delayed by as much as a decade if progress does not accelerate.

The green hydrogen sector is a vital component of India’s energy transition strategy, requiring urgent investment and policy support to realize its full potential. India must speed up the development of its green hydrogen economy.

The energy transition in India is driven by four main investment themes: energy efficiency, renewable energy, low-emission fuels, and sustainable mobility.

The government has created a policy framework that includes subsidies, mandates, taxes, and incentives to encourage growth in these areas.

Historically, investment strategies have leaned heavily on subsidies and incentives, with 37% of average allocations going to fossil fuels and only 5% to green energy over the past five years.

Moreover, India is working on establishing a carbon market framework and a climate finance taxonomy to promote funding for green technologies.

A significant challenge in India’s energy transition is the disparity in returns between established fossil fuel companies and emerging green energy firms.

Despite increasing interest and rising stock valuations in the green sector, traditional oil and gas companies have outperformed their renewable counterparts by an average of 8.3% in capital returns over the last five years, according to S&P Global Commodity Insights.

Currently, gas constitutes just 6% of India’s energy mix, but it must play a crucial role in moving away from coal. The government aims to increase this share to 15% by 2023, enhancing flexibility in the energy sector alongside the growth of renewables.

India also recognizes the importance of 30 critical minerals essential for its energy transition. The establishment of Khanij Bidesh India aims to secure global access to these minerals, but greater focus on domestic exploration is necessary to support this initiative.

The report advises that the Indian government should prioritize reforms in the power sector to address long-standing issues like high transmission and distribution losses and operational inefficiencies. By creating a competitive market environment and encouraging private participation, India can improve grid reliability and better integrate renewable energy.

Focusing on energy-intensive industries and promoting efficient technologies in public transport and construction can significantly enhance energy productivity. Expanding energy-efficient cooling solutions will also be key to reducing overall energy consumption.

Building robust manufacturing ecosystems for batteries, electrolysers, and photovoltaic systems is critical. This requires securing domestic raw material supplies, developing a skilled workforce, and leveraging government procurement to support local industries.

To boost clean energy investments, India needs to create a favorable environment for green bond issuances and innovative financing models. Strengthening the capacity of financial institutions to manage green projects will be crucial for attracting private capital.

Finally, promoting decentralized renewable energy solutions and supporting research into off-grid technologies will help address energy access issues, particularly in rural areas. Public-private partnerships can play a significant role in advancing technology development.

RELATED ARTICLES

LEAVE A REPLY

Please enter your comment!
Please enter your name here

- Advertisment -

Most Popular