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The Challenge
As one of the fastest growing economies in the world, India is set to contribute 1/4th of the projected rise in global energy demand by 2040. It is already the fourth largest greenhouse gas emitter after China, USA, and the EU, and as it creates more and better opportunities for its people, leading to improved living standards, emissions will continue to rise. Still, although energy use in India has almost doubled since 2000, energy consumption per capita is one third of the global average and 237 million Indians do not have access to energy. Prime Minister Narendra Modi has committed to ensuring that the 27 million households that remain without energy get power by 2019.
The Opportunity
Alongside the goal of bringing electricity to hundreds of millions of people, India has also set significant voluntary targets under the Paris Agreement on climate change. It has committed to reduce emissions intensity of GDP by 33-35 percent by 2030 from 2005 levels, and to boost renewable energy capacity to 40 percent by 2030, as well as to ensure that 40 percent of electricity requirement will be met through non-fossil fuels.
The Government of India has also set an ambitious target of generating 175 GW of renewable energy by 2022. Its leadership on the International Solar Alliance (along with France) signals its commitment. As a result, annual investments in solar power could surpass investments in coal by 2019-20, with US$35 billion committed by global players. Therefore, by 2020, solar energy could be cheaper than coal. The energy access market (through only decentralised renewable energy, DRE) in India is estimated at US$400 million. Globally, when renewable energy use is doubled, world GDP is expected to expand to US$1.3 trillion. Market-based approaches to unlock energy efficiency opportunities are estimated to be worth more than US$11 billion.
Potential Areas of Focus
The scale of India’s ambitions to expand its renewable energy capacity opens the door for business and private sector to work alongside central and state governments to pilot innovative renewable energy technologies. Through innovative and grid-complementing DRE solutions, such as home energy systems and renewable energy mini-grids, businesses can help ensure last mile connectivity for remote communities. Investment in solar energy and efficient storage via lithium-ion based batteries, the cornerstone of expanding renewable energy use, is key. Sector-building through innovative business models and financial institutions, such as green infrastructure bonds to raise funds to provide debt financing for renewable energy and energy efficiency projects, could be another key area for intervention.
UNIBF Activities
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