Growing capacity additions of renewable energy across various sectors worldwide are likely to end the dominance of fossil fuel-based electricity generation by 2030. The share of renewable energy in global electricity generation is projected to surpass 50 percent by the end of the current decade, as observed by the Reserve Bank of India in a recently published report. Various large corporations and independent companies have installed new greenfield and expanded brownfield capacities to help India reduce carbon emissions and meet climate goal of achieving carbon neutrality by 2070, as pledged by Prime Minister Narendra Modi at the United Nations’ 26th Cooperation of the Partnership (COP26) meeting in Glasgow, United Kingdom, in 2021.
According to the International Energy Agency (IEA), the supply of clean electricity continues to expand rapidly. The share of fossil fuels in global electricity generation is forecast to decline from 61 percent in 2023 to 54 percent in 2026, falling below 60 percent for the first time since 1971. While extreme weather conditions, economic shocks, or changes in government policies could lead to a temporary rise in emissions in individual years, the broader decline in power sector emissions is expected to persist as renewables and nuclear power capacity continue to expand and displace fossil-fired generation, according to the IEA.
| India’s power sources trend - installed capacity; as of August 21,2024 |
| Financial year | Capacity (GW) |
| 2024-25 | 451 |
| 2023-24 | 442 |
| 2022-23 | 416 |
| 2021-22 | 400 |
| 2020-21 | 382 |
| 2019-20 | 370 |
| 2018-19 | 356 |
| 2017-18 | 344 |
| 2016-17 | 327 |
| 2015-16 | 305 |
India Climate and Energy Dashboard, Government of India, and Polymerupdate Research
Meanwhile, global carbon dioxide emissions from electricity generation are expected to fall by more than 2 percent in 2024 after increasing by 1 percent in 2023. Small declines are anticipated in 2025 and 2026. The strong growth in coal-fired power generation in 2023 – particularly in China and India, amid reduced hydropower output – was responsible for the rise in carbon dioxide emissions from the global electricity sector, the IEA said.
Currently, fossil fuel-based electricity generation accounts for approximately 55.72 percent of India’s total energy capacity, with coal holding the largest share at 48.27 percent, followed by oil & gas at 5.64 percent, and nuclear energy at 1.81 percent. In contrast, renewable energy contributes 44.27 percent to India’s total energy production, with solar, wind, and hydro power accounting for 19.84 percent, 10.47 percent, and 10.41 percent, respectively. Bio power and small-hydro projects contribute 2.43 percent, and 1.12 percent, according to data compiled by India’s Niti Aayog.
RBI’s observationsEstimating India’s share to increase substantially in the next six years, the country’s central bank said that the energy transition has accelerated in recent years, with the multiplier effect on the development and deployment of clean technology. Additionally, the capital investment across the clean energy value chain has reached a record high. The RBI’s report further stated that the rise of cleaner power generation offers a valuable window to address ‘hard-to-abate’ sectors such as steelmaking and aviation, where low-carbon alternatives are still in their nascent stages. “The importance of increasing investments in low-carbon energy has increased in recent years. Cleaner power generation can drive bulk of the aggressive emissions cuts that are urgently needed, enabling more time to tackle 'hard-to-abate' areas like steelmaking and aviation, where cost competitive low-carbon solutions have yet to scale,” the report added.
RBI further stated that for every dollar invested in fossil fuels, an average of three dollars needs to be allocated to renewable energy in the coming years, a substantial increase from the current ratio, where both aforementioned sectors receive equal investment. A tripling of renewable energy capacity by 2030 is seen as essential to meeting net-zero emission targets by mid-century. The RBI highlighted that a fully decarbonized global energy system by 2050 will come at an estimated cost of US$ 215 trillion, the report projects.
| India’s power sources mix – installed capacity (as of August 31, 2024); (Total installed capacity = 451 GW) |
| Particulars | Capacity (GW) | Share (%) |
| Coal | 217.59 | 48.27 |
| Oil and gas | 25.41 | 5.64 |
| Nuclear | 8.18 | 1.81 |
| Total fossil-fuels | 251.18 | 55.72 |
| Solar | 89.43 | 19.84 |
| Wind | 47.19 | 10.47 |
| Hydro | 46.93 | 10.41 |
| Bio power | 10.96 | 2.43 |
| Small-Hydro | 5.07 | 1.12 |
| Total renewables | 199.58 | 44.27 |
Sources: India Climate and Energy Dashboard, Government of India, and Polymerupdate Research
Global energy investmentIEA forecasts the overall global energy investment to exceed US$ 3 trillion for the first time in 2024, with US$ 2 trillion going to clean energy technologies and infrastructure. Investment in clean energy has accelerated since 2020, and spending on renewable power, grids and storage is now higher than total spending on oil, gas, and coal. As the era of cheap borrowing comes to an end, certain kinds of investment are being held back by higher financing costs. However, the impact on project economics has been partially offset by easing supply chain pressures and falling prices. Solar panel costs have decreased by 30 percent over the last two years, and prices for minerals and metals crucial for energy transitions have also sharply dropped, especially the metals required for batteries.
The Agency further warns of energy investment flow imbalances, particularly insufficient clean energy investments in Emerging Markets and Developing Economies (EMDE) outside China. There are tentative signs of a pick-up in these investments. Clean energy investments are set to approach US$ 320 billion in 2024, up by more 50 percent since 2020. This is similar to the growth seen in advanced economies (+50 percent), although trailing China (+75 percent). The gains primarily come from higher investments in renewable power, now representing half of all power sector investments in these economies.
Progress in India, Brazil, parts of Southeast Asia and Africa reflects new policy initiatives, well-managed public tenders, and improved grid infrastructure. Africa’s clean energy investments in 2024, at over US$ 40 billion, are nearly double those in 2020.
“Yet much more needs to be done. In most cases, this growth comes from a very low base and many of the least-developed economies are being left behind (several face acute problems servicing high levels of debt). In 2024, the share of global clean energy investment in EMDE outside China is expected to remain around 15 percent of the total. Both in terms of volume and share, this is far below the amounts that are required to ensure full access to modern energy and to meet rising energy demand in a sustainable way,” IEA added.
By Dr. Sajjid Mitha (Founder and CEO)
POLYMERUPDATE / POLYMERUPDATE ACADEMY / RACE CONFERENCES
sajjid.mitha@polymerupdate.com
