The report, titled "New Energy Outlook: India," outlines what the country must do to hold global warming well below two degrees Celsius and avoid the most severe impacts of climate change.
05 Sep 2024 | 1793 Views | By Autocar Professional Bureau
A new report from BloombergNEF (BNEF) suggests that while it is still possible for India to reduce its carbon emissions in line with the Paris Agreement, achieving this goal is becoming increasingly difficult.
The report, titled "New Energy Outlook: India," outlines what the country must do to hold global ...
This is an Autocar Pro Plus article. Subscribe to continue reading.
A new report from BloombergNEF (BNEF) suggests that while it is still possible for India to reduce its carbon emissions in line with the Paris Agreement, achieving this goal is becoming increasingly difficult.
The report, titled "New Energy Outlook: India," outlines what the country must do to hold global warming well below two degrees Celsius and avoid the most severe impacts of climate change.
The report emphasizes the need for rapid decarbonization of India's power sector, which is currently the largest emitter in the country. According to BNEF’s Net Zero Scenario (NZS), India must more than triple its solar and wind capacity by 2030, reaching 494 gigawatts. The analysis also indicates that India needs to phase out all unabated fossil fuel-based power generation by 2045, transitioning to a mix of low-cost renewables and flexible technologies like batteries, pumped hydro, and gas peakers.
Shantanu Jaiswal, head of BNEF in India and Southeast Asia, warned that India’s opportunity to stay on a pathway compatible with limiting global warming to well below two degrees is narrowing quickly. He highlighted the need for a transition to a clean power system based on wind, solar, and energy storage, which he said is essential to reducing carbon emissions cost-effectively. Jaiswal stressed that most emissions reductions in India must occur over the next decade, with emissions from all sectors needing to peak within this timeframe.
The report presents two updated climate scenarios: the Net Zero Scenario (NZS) and a base-case Economic Transition Scenario (ETS). The NZS aligns with a 67% chance of keeping global warming to 1.75 degrees Celsius and indicates that carbon emissions growth must be limited, with emissions peaking across all sectors within the next ten years. Under this scenario, emissions from India's power, transport, and buildings sectors must peak this decade, followed by industrial emissions by the early 2030s, and then decline rapidly through mature and emerging technologies.
In contrast, the ETS assumes no new policies and results in a global warming outcome of 2.6 degrees Celsius, showing the limits of the energy transition using only currently economical and commercially available technologies.
India is currently on track to achieve its updated Nationally Determined Contribution (NDC) even under the base-case scenario. However, the NZS indicates that to remain aligned with the Paris Agreement, India’s emissions increase from energy-related sectors should be limited to 106% by 2030 relative to its 2005 baseline, significantly lower than the 175% increase under the ETS and the 192% rise implied by its NDC.
The report highlights that cleaning up the power sector could account for nearly half of all emissions avoided by 2050, compared to a scenario without further action on decarbonization. Electrification of end-use sectors, such as road transport, buildings, and industry, could account for another 12% of avoided emissions. By 2050, India’s power system is projected to grow significantly and shift entirely to clean power technologies, with combined wind and solar installations reaching 4,328 gigawatts. Storage solutions, including pumped hydro and batteries, are expected to expand from around 5 gigawatts today to over 770 gigawatts by mid-century.
The report identifies a $2.1 trillion investment opportunity in building 4 terawatts of wind and solar power in India from now until mid-century. However, it also notes that this renewables-heavy system poses grid-balancing challenges that will require flexibility, not only through supply-side solutions like batteries and pumped hydro but also through demand-side measures such as electrolyzers and smart vehicle charging.
The report also underscores the difficulty of scaling up technologies and fuels required to reduce the remaining two-fifths of emissions, such as biofuels for shipping and aviation, clean hydrogen, and carbon capture and storage for heavy industry and power. It projects that India's annual hydrogen consumption could increase more than tenfold to 64 million tons by 2050, while carbon capture could grow to 1.4 billion metric tons per year under the NZS.
According to the report, India's energy sector investment under the Net Zero Scenario would amount to $12.4 trillion between 2024 and 2050, which is 34% (about $3 trillion) higher than under the Economic Transition Scenario.
The findings form part of a series of regional and sector-specific reports from BloombergNEF's global New Energy Outlook, which aims to inform public policy, corporate strategies, and financial decision-making related to the low-carbon transition.