If India is going to provide power to its more than 1 billion people over the next five years, it will need to invest about $250 billion during that time, according to Reuters.
The country’s power minister, Piyush Goyal, speaking at the World Economic Forum conference in New Delhi this week, noted that most of the money would need to come from the private sector.
The government is seeking $100 billion for renewables and $50 billion for transmission and distribution upgrades, according to Reuters. Earlier this year, the government committed $250 million to solar plants, solar-powered irrigation and power upgrades.
India is having difficulty meeting its current power demands, and it will be a stretch to supply reliable electricity to a power-hungry nation that is slated to double its energy consumption by 2019. Nearly 40 percent of India’s 1.2 billion residents do not have access to reliable electricity, a gap that Prime Minister Modi has pledged to eliminate in the coming five years.
Much of that demand will ultimately be met by burning more coal. Goyal said India needs to increase the amount of coal it mines, while also cutting down on theft and investing in renewables. Coal already produces more than half of the country’s electricity.
Although coal will continue to reign in the country, Goyal claimed earlier this year that India will be a “renewables superpower," according to The Guardian. He suggested India could easily add 10 gigawatts of solar annually. Last month, the government approved the nation's first offshore wind farm.
There are many factors that could derail those solar ambitions, however. “The problem isn't the level of investment; it's the way that investment is being structured and directed,” said Adam James, global demand solar analyst with GTM Research. “The government has earmarked funds to develop several gigawatt-sized solar plants to meet its ambitious solar targets. That exposes India to a higher risk of not meeting its targets.”
James noted that projects of that size face considerable challenges in terms of project development, including securing land, offtakers, financing, grid connection and management. Even so, “the National Solar Mission has been a success,” said James, “and we are seeing a resurgence in state markets and unsubsidized growth in distributed generation.”