‘Net-zero target calls for tech innovation, cheaper capital’
- With India chasing the target of 500 GW of clean energy capacity by 2030, financing and the cost of capital will be critical
India’s long-term target of net-zero carbon emissions by 2070 would need appropriate technology, financial resources at a reasonable cost, and increased participation by various stakeholders, a panel of experts said at the recent Mint Sustainability Summit.
In the next 10-15 years, many new technology-led solutions would be available, said Sumant Sinha, founder, chairman and chief executive, ReNew, who believes India can reach its target perhaps even before 2060. “What India will discover is that either we stay outside some of these technologies and business models that evolve, or decide actively to get into those earlier and become leaders in those solutions. As we do that, and the cost comes down and usage increases, moving towards net zero becomes much faster.”
While 2070 may seem like a moonshot target, think tank CEEW’s CEO Arunabha Ghosh thinks the individual steps and milestones taken towards that are critical. “The issue is not about setting the target, but more about the money and how to bring down the cost of financing. We have to also think about the materials challenge, and the design of our power and energy markets have to change. That will give the real push,” he said.
Some companies have set themselves an accelerated target. FMCG major Hindustan Unilever Ltd (HUL), for instance, wants to achieve net zero emissions from all its products by 2039. The company is nearly 100% renewable energy based for its electricity needs, with a 40% reduction in energy consumption, said its South Asia sustainability director, Kanika Pal. “Water will be critical in sustainability. We have enabled a 48% reduction in our water requirements to a 2008 baseline, and we have also enabled improved utilization and conservation. As a result, we have enabled more than 100 billion litres of water saved,” she said.
R.P. Gupta, chairman and managing director, Solar Energy Corporation of India said while the cost of renewable energy is still higher compared to thermal, the (pricing) gap has narrowed due to policy push, tech innovations and entrepreneurs in India. He added: “The challenges which discoms were facing have been addressed with policy regulations, ensuring the payments are made on time.”
With India chasing the target of 500 GW of clean energy capacity by 2030, financing and the cost of capital will be critical. Sinha said to set up 50GW of renewable energy capacity every year would need roughly $50 billion of investment annually. While both equity and debt are available, the cost of financing remains higher than other parts of the world, which “translates into higher tariffs that ultimately our consumers have to pay”.
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First Published:29 Aug 2023, 12:23 AM IST
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