India Requires $350-400bn For Its Clean Energy Ambitions: Report

India Will Need $350-400bn Annually For Its Clean Energy Ambitions: Report

A latest KPMG report said India would require around USD 350-400 billion annually by 2047 for its clean energy ambitions. The report was released recently under the presence of Union Minister Hardeep Singh Puri in New Delhi.

The report said the need for high-speed and large-scale energy transition offered investment opportunities. It said climate change and rapid growth demand energy transition could require a global annual investment of USD 4.5 trillion in energy until 2050.

It also forecasted the likely investment the country would need for its clean energy ambitions. “With the ever-growing demand for energy from India’s expanding population and infrastructure development initiatives is creating a need for it to fast-track energy transition. To address its clean energy ambitions, India will need an average of USD 350 – 400 billion annually by 2047,” a media release from KPMG said.

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“Geopolitical upheavals have brought to the fore the broader challenges on energy security and the risk it poses for many countries, especially India. As a large energy importer, India must find alternatives that make the country less vulnerable. For this, it is extremely important that India gets its manufacturing and supply chain story right, as it would serve the nation and de-risk the world.” said Anish De, Global Head – Energy, Natural Resources & Chemicals (ENRC), KPMG International.

The report said that centralizing supply chains and the resulting lack of price control due to overreliance on a single country is a key risk for global renewable energy capacity deployment. Hence, a global attempt to diversify renewable energy supply chains by adopting approaches such as the China + 1 strategy could be imperative.

“Clean technology manufacturing in India presents a USD 300-400 billion opportunity cumulatively by the end of this decade. High captive demand, strong manufacturing clusters and processing capabilities, government support, regulatory enablers and unique domestic capabilities, including skillsets, make India a strong contender in this space,” the think tank said.

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It also said India has been in a sweet spot between Europe and China to support the global energy transition. “India has the ingredients needed to be a clean technology manufacturing hub. For this, the industry must strengthen its manufacturing and sourcing strategy and focus on value engineering, effective expansion management and other levers, it said.

“With a 28.4 percent share in global manufacturing output, China is firmly placed at the top of cost-effective destinations due to government policies and suitable demography. On the other hand, Europe is known for its innovations and superior products, albeit with high labour costs and strict regulations. The global economy is seeking a reliable source that can provide high-quality products at a competitive price,” the report said.

The KPMG report also said that India would need to play to its strengths and address its weaknesses too. 

“An evaluation of India’s manufacturing sector positions it favourably in terms of supplier ecosystem and collaborations and partnerships. While R&D and innovation and financing have emerged as key areas of concern, areas such as government support and availability of skills demonstrate scope for improvement,” the report said.  

Anvesha Thakker, Partner and Industry Lead- Clean energy, Energy Transition Co-Lead: Global Decarbonisation Hub, KPMG in India said, “If both domestic consumption and exports are factored, it has a USD300-400 billion cumulative market opportunity in clean energy manufacturing that it can harness within this decade. Additionally, as per KPMG in India estimates, energy transition could create the need for ~ 5-6 million jobs by 2030 and ~ 9-10 million by 2047, of which approximately 30% is expected in manufacturing when we consider not only the local requirements but global demand of talent and requirements of global capability centers of energy majors in India.”