India will have to invest $385 bn to meet its renewable energy target of 500 GW by 2030: Moody’s

India will have to invest as much as $385 billion to meet its renewable energy targets by 2030, said Moody’s Ratings on Thursday. India aims to produce 500 gigawatts (GW) of renewable energy by 2030. Moody’s says that coal would still remain the main source of electricity generation for the next decade.

While India missed its target of 175 GW by 2022, it has plans to ramp up non-fossil fuel capacity by 50 GW each year to meet the target. Moody’s estimates that an annual capacity addition of 44 GW would help achieve the target. 

This indicates that India would have to spend $190-215 billion over the next six-seven years, and another $150-170 billion for transmission and distribution. 

Moody’s said, “The sizable pipelines of announced projects will likely keep financial leverage of rated renewable power companies high over the next two to three years, a credit negative, but leverage of government related issuers is likely to remain moderate over the same period.”

It said that India’s strong policy support has boosted renewable energy share to around 43 per cent in its power in fiscal 2023-24, as well as attracting private sector investments. Moody’s continued policy backing will facilitate significant progress toward India’s 2030 transition and 2070 net-zero targets. 

While it sees steady growth in renewable energy, it expects coal to play a significant role in electricity generation for up to 10 years."We expect India to add 40-50GW of coal-based capacity over the next five to six years to help meet power demand, which is likely to grow by 5-6 per cent annually over this period," it said. 

(With Reuters inputs)