Indian RE Sector Can Attract Rs 30L-crore Investment Between 2024-2030: Report

Power transmission in India is emerging as one of the largest unified electricity grids in the world, states the Economic Survey 2023-24. The Indian transmission system has expanded to 4,85,544 circuit kilometers of transmission lines and 12,51,080 mega volt amp (MVA) of transformation capacity, until 31 March 2024, stated the survey notes. The survey was tabled by Union Minister of Finance and Corporate Affairs, Nirmala Sitharaman in parliament today. It said the peak electricity demand in India has increased by 13 percent to 243 GW in FY24.

Between FY23 and FY24, the Survey says, the maximum rise in electricity generation was recorded in renewable energy resources for utilities. As per the economic survey, a total of 2.86 crore households have been electrified since the launch of the Saubhagya in October 2017 under various schemes. Further, it states that the implementation of electricity (late payment surcharge and related matters) Rules, 2022 have given relief to the DISCOMs, as well as electricity consumers and generating companies.

The Economic Survey states that, as of 31 March 2024, 190.57 GW of renewable energy (RE) capacity has been installed in the country. The share of RE in the total installed generation capacity in the country stands at 43.12 percent, it notes.

The clean energy sector in India saw new investment of ₹8.5 lakh crore between 2014 and 2023, the Survey highlights. It says that the RE sector is expected to attract investments of about Rs.30.5 lakh crore in India between 2024 and 2030 and this would create significant economic opportunities across the value chain.

As per the National Electricity Plan of the Central Electricity Authority (CEA), the survey mentions that the non-fossil fuel (hydro, nuclear, solar, wind, biomass, small hydro, pump storage pumps) based capacity which is around 203.4 GW (46 percent of the total) out of 441.9 GW of total installed capacity in 2023-24 is likely to increase to 349 GW (57.3 percent) in 2026-27, and 500.6 GW (64 percent) by 2030.

In the latest economic survey, before the upcoming monsoon session, the government projected a rise in the domestic electric vehicles (EV) market at a compound annual growth rate (CAGR) of 49 percent between 2022 and 2030. It anticipates the sector to reach one crore units in annual sales by 2030 and forecasts the electric vehicle (EV) industry to create 5 crore direct and indirect jobs by 2030. To support and nurture this development, the government has undertaken multiple steps.

Looking back at 2021, the survey revealed that the automobile sector is set to become the key driver of India’s economic growth. In December 2022, India became the 3rd largest automobile market, surpassing Japan and Germany in terms of sales. In 2021, India was the largest manufacturer of two-wheeler and three-wheeler vehicles and the world’s fourth-largest manufacturer of passenger cars. The sector’s importance is evident as it contributes 7.1 percent to the overall GDP and 49 percent to the manufacturing GDP while generating direct and indirect employment of 3.7 crore by the end of 2021.

The survey expected the automotive industry to play a critical role in the transition towards green energy. It perceives the domestic electric vehicles (EV) market to grow at a compound annual growth rate (CAGR) of 49 percent between 2022 – 2030 and expects it to reach one crore units in annual sales by 2030. It mentioned, “The EV industry will create 5 crore direct and indirect jobs by 2030. To support and nurture this development, the government has undertaken multiple steps.”

Under the government’s Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles in India (FAME India), the survey noted an increase in investments. This investment seeks to incentivize the electric vehicle industry. For instance, the survey compared and found that the budget allocation for electric vehicles increased to accommodate the rising demand of the sector. For instance, in 2014-19, the budget allocated Rs.895 crore to support 2.8 lakh hybrid and electric vehicles (EV). They also deployed 425 electric buses or E-buses across 10 cities. Additionally, the government has also sanctioned around 520 EV charging stations and installed 479 EV charging stations.

In 2019-24, the budget outlay of Rs.10,000 crore was laid down before the parliament, which envisaged supporting 1 million Two-Wheelers, 0.5 million three-wheelers, 55,000 cars, and 7090 buses. These incentives were also extended to support 7.1 lakh electric vehicles (EVs) and sanctioned 7210 e-buses, with 2172 e-buses deployed until December 2022. Cumulatively, 2,877 charging stations for electric vehicles were sanctioned in 68 cities, and 1,576 charging stations across expressways and highways.