For the first time in history, investing in India’s renewable energy sector surpassed that of traditional fossil fuel-based power production. India achieved this groundbreaking feat in 2017 according to the recent numbers released in the International Energy Agency (IEA)’s World Energy Investment 2018 report.
Ringing in at nearly $20 billion, last year’s investment in Indian renewables accounted for over a third of investments in the power sector thanks to nearly double the money being poured into solar and wind projects. By comparison, in 2017 all investments in power projects based on coal, gas, and oil as fuel reached totaled just $16 billion altogether.
India’s rising investments in the renewable energy sector has dovetailed with a fall in coal power investments and thermal power generation. Investment for new coal plants plummeted to their lowest numbers in 15 years, according to the IEA report.
Leading the charge is the southern coastal state of Karnataka, home of the booming tech city Bengaluru and locus of the subcontinent’s renewable energy frontlines. Over the last 12 months the region became India’s biggest renewable power producer, boasting an installed power capacity of 12.3 gigawatts (GW). This is comprised of 5 GW of solar energy, nearly 5 GW of wind energy, and 2.6 GW of other renewable power sources like hydro and biomass.
Reflecting the national trend, Karnataka’s renewable energy has far outstripped coal, which currently stands at around 9.8 GW of capacity in Karnataka. Another striking comparison can be found in the state’s production numbers just 5 years ago. In 2013, Karnataka had a coal capacity of 6.8 GW, far less than the current capacity, but dwarfing the mere 4 GW of renewables capacity at the time.
This sweeping change is thanks in large part to the recently decreasing prices of wind and solar power. At the same time, India’s thermal power sector is collapsing, and coal prices are rising. For a nation that makes up a huge part of global power expenditures, it’s a no-brainer. In 2017 India, China, the United States and Europe together account for a whopping two thirds of worldwide electricity network investments.
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By all accounts, this is just the beginning of the renewables revolution in India. A few years ago, the nation publicly set what was, at the time, an ambitious goal to reach 175 GW of wind and solar energy by March of 2022. This was already a lofty plan, but in June India increased that target to 227 GW -- a staggering 28 percent bump. In the time that the goal was originally announced, India has so far managed to add about 70 GW, and they’ve announced a plan to auction off 40 GW of renewables every year until 2028.
As India charges ahead, the rest of the world is falling behind on energy sector investing. In 2017 global energy investments were just $1.8 trillion after three consecutive years of decline. This is a fall of 2 percent as compared to 2016, and the IEA projects that the decline will continue over the next few years.
Thanks to this global decrease in spending and a booming domestic demand for energy, India is able to soar through the ranks to the top of the charts. If India reaches their goal for 2022, they will be in third place worldwide for installed renewable energy capacity, coming in just behind China and the United States.
In addition to renewable energy, China and India are also leading the charge for electric vehicles in a time when other major players are shying away from alternative energy spending. By bucking global trends, India is making major headway --not to mention headlines-- on the way to a greener, high-powered future. Their aggressive renewable policies are a breath of fresh air in a fossil-powered world, and in a rapidly changing energy landscape, the first world may soon be turning to India to show them the way to a cleaner future.
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By Haley Zaremba for Oilprice.com
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