India's Race To Achieve Paris Goals Faces Major Hurdles: Bloomberg-NEF

A Bloomberg NEF (BNEF) report suggests that while India still has a chance to curb its carbon emissions and align with the Paris Agreement, achieving this goal is becoming increasingly difficult. The country must rapidly decarbonise its power sector, tripling its solar and wind capacity by 2030 and fully phasing out unabated fossil-fuel-based power by 2045. 

India's power sector, the largest carbon emitter, must undergo a swift transformation. The BNEF report reveals that, under its Net Zero Scenario (NZS), India needs to install 494 gigawatts of solar and wind capacity by 2030 to stay on track. The country’s electricity mix would shift entirely towards renewables, backed by flexible technologies such as battery storage, pumped hydro, and gas peakers. 

India’s window to stay on a well-below-2-degrees pathway is closing, fast and, therefore, it must move rapidly to a clean power system based on wind, solar, and energy storage to reduce carbon emissions cost-effectively. Most of the heavy lifting in India’s emission-reduction trajectory need to happen within the next decade, as emissions from all sectors must peak in this period. 

The report expands on the findings from the New Energy Outlook 2024, presenting two scenarios: the Net Zero Scenario (NZS) and the Economic Transition Scenario (ETS). Under the NZS, there is a 67 percent chance of limiting global warming to 1.75 degrees Celsius, but India must ensure its emissions peak by 2030 and rapidly decline thereafter. The alternative ETS scenario, which assumes no new policies, would result in 2.6 degrees Celsius of global warming, breaching the Paris Agreement. 

Under the NZS, emissions from India's power, transport, and buildings sectors must peak within the decade, followed by industrial emissions in the early 2030s. The transition would require India to aggressively scale up wind and solar capacity, with a projected 4,328 gigawatts of installations by 2050, and boost storage capacity to over 770 gigawatts. 

India’s shift to renewable energy represents a $2.1 trillion investment opportunity, according to BNEF India analyst Siddharth Shetty. However, the move to a renewables-heavy system also poses significant grid-balancing challenges. Shetty pointed out the need for flexibility through technologies such as batteries and pumped hydro on the supply side, alongside innovations like electrolysers and smart vehicle charging on the demand side. 

Decarbonising the remaining two-fifths of India's emissions—those from hard-to-abate sectors such as shipping, aviation, and heavy industry—will require the scaling of more challenging technologies, including biofuels, clean hydrogen, and carbon capture and storage. By 2050, India’s hydrogen consumption is expected to jump over tenfold to 64 million tonnes annually, and carbon capture could reach 1.4 billion metric tonnes per year under the NZS. 

India's energy investment under the NZS is projected at $12.4 trillion between 2024 and 2050, a 34 percent increase compared to the ETS. The report stresses the need to rapidly scale up renewable power, electric vehicles, energy storage, nuclear energy, and carbon capture to achieve net zero emissions. 

Without urgent action, India risks missing its window to align with the Paris Agreement, endangering both its climate goals and the global effort to limit warming to well below two degrees Celsius.