Friday, 3 December, 2021

Climate target poses upside risks to renewable growth outlook in India: Fitch

NEW DELHI: Fitch Solutions on Thursday said the new climate targets announced at the COP26 summit by Prime minister Narendra Modi pose an upside risk to its outlook for renewable growth in the country.

With the new targets, it expected to see attempts to alleviate the issues regarding supply chains, manufacturing and project development that have long plagued renewable proliferation, report agencies.

“The market’s rapidly growing need for electricity will keep the market highly reliant on coal power, posing challenges to the country’s decarbonisation plans,” it said. “Hydrogen will offer a unique pathway to decarbonisation in the power and wider energy sectors as the market seeks to cut one billion tonnes of carbon dioxide emissions.”

At the 2021 Climate Change Conference, also known as COP26, Modi outlined a net zero emissions target by 2070 for India.

“As the fourth-largest carbon-emitting market globally, India has lagged behind much of the world’s leading power markets including China and the US who have outlined a net zero target by 2060 and 2050 respectively,” Fitch Solutions said.

The new announcements put forth a clear ambition of the Modi government to tackle climate change more aggressively. India is targeting to increase its low-carbon power capacity to 500 gigawatts (GW) by 2030 and meet 50 per cent of its total energy requirements by 2030.

“We highlight that these pledges pose a mounting upside risk to our forecasted 313 GW of installed low carbon power capacity, including nuclear, hydro and non-hydropower renewables by 2030,” Fitch Solutios said.

It added that non-hydropower renewables will make up the vast majority, 83 per cent, of this growth highlighting the significance of the wind and solar sub-sectors.

“We highlight that the market will not reach the Modi government’s previous plans to develop 175 GW of renewables capacity by 2022 and will fall short with just 116 GW installed by end 2021.

“We also highlight increased risks to the successful continuation of renewables auctions as well as the development of recently selected projects within those tenders,” it said.