India is projected to need around USD 200 billion in investments to develop renewable energy (RE) assets by 2030, according to a report from Nomura.
This estimate is considered conservative, aligned with India’s renewable energy goals. The report anticipates that energy demand in India will increase at a compound annual growth rate (CAGR) of 7% from FY24 to FY30, surpassing the country’s historical growth rate of about 5%.
“According to our conservative estimate, RE generation will necessitate incremental investments of approximately USD 200 billion to meet India’s targets,” the report stated.
The anticipated rise in energy demand is attributed to factors such as the growth of data centers, increased penetration of electric vehicles (EVs), and advancements in green hydrogen technology. These elements could drive an even higher demand for renewable energy than currently forecasted.
India’s installed power capacity is expected to grow at a CAGR of 10% between FY24 and FY30, increasing from 450.8 GW to 777.1 GW.
In FY24, the country auctioned 40 gigawatts (GW) of RE capacity. However, to achieve the ambitious goal of 500 GW of renewable energy capacity by 2030, the report emphasizes that the rate of RE auctions must significantly increase, requiring approximately 60 GW to be auctioned annually.
“We believe that the pace of RE auctions will need to materially accelerate to around 60 GW per year,” the report noted.
The industry is well-equipped to meet this rising demand, particularly with favorable pricing for solar modules and wind turbines. Key growth drivers include supportive government policies and a strong push from the commercial and industrial (C&I) sectors to adopt greener energy solutions.
Additionally, as the cost of producing green hydrogen becomes competitive with grey hydrogen, demand for renewable energy is expected to accelerate, potentially surpassing current estimates. India’s total hydrogen demand currently stands at 6 million tons, primarily sourced from refineries (3 million tons), fertilizers (2 million tons), and steel (1 million ton).
Regarding electricity demand from EVs, the report suggests significant growth in the coming years. By the end of FY25, EVs are expected to account for around 3.4 terawatt-hours (TWh) of electricity demand, representing just 0.2% of the country’s total power consumption. However, with the government’s target of achieving 100% EV sales for new vehicles by 2030, demand is anticipated to surge sharply.
