NITI Aayog

The second wave of Covid-19 reminds us to build a resilient society. Climate Change, not unlike Covid-19, will deliver devastating effects to our planet and disrupt our way of life. So, in this climate decade, India must channel investments into sustainable activities. The first step is to construct a robust “green taxonomy” – a green list of sustainable activities. 

In India, the lack of suitable fiscal incentives and relevant experience, combined with high upfront capital costs, has hindered the adoption of battery energy storage systems (BESS) in comparison to other developed countries. However, there is potential for the country to take the lead.

A new report by government thinktank NITI Aayog and Rocky Mountain Institute (RMI) identifies financing as one of the hurdles for India’s electric mobility transition. It proposes solutions to lower the cost and increase finance for electric vehicles in the nation.

With this, green hydrogen (hydrogen produced using renewable energy) would become cost-competitive with hydrogen from fossil fuels in certain industrial applications such as ammonia production for fertilizers.

A new report says that the nation would require an estimated annual battery capacity of 158 GWh to realize its 2030 electric vehicle (EV) adoption target. Meeting this potential demand would require investments exceeding INR 85,900 crore (US$ 12.3 billion) in case battery manufacturing is 100% indigenized.

Electric vehicles will account for 65-75% of new three-wheeler (3W) sales by 2030. Intra-city transport buses will see 25-40% EV penetration and two-wheelers 25-35%. In four-wheeler passenger vehicles, the market will be driven by shared mobility, while just 10-15% of new car sales for personal mobility will be electric.

A joint study by Smart Power India, an arm of US-based impact investor Rockefeller Foundation, and government thinktank NITI Aayog, evaluates the status of electricity access in India across different states and benchmarks distribution utilities’ capacity to provide electricity access. It also offers recommendations to help DISCOMs realize their full potential.

Power Minister RK Singh has revealed interest from manufacturers in developing more production lines even before incentive schemes being drawn up by the government are taken into account.

The government is trying to harness renewables to increase domestic output but will need a more liberal energy market and to consider the structure of procurement auctions, cloying red tape and the financial travails of state utilities if it is to achieve its goals, says Rakshika Kaul of Amp Energy India.

Policymakers could amend solar auctions to encourage manufacturing as the nation chases an aggressive solar target of 300 GW by 2030.