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India Needs $145B Yearly for Energy Transition, Says Report

A new report states India requires approximately $145 billion in annual investments to align its economic growth with net-zero pathways, focusing on power generation, storage, and grid upgrades. While coal production targets remain on track, natural gas demand is projected to double by 2050. The analysis highlights India's potential to become a major global alternative in the solar and battery supply chain. Success depends on market reforms and attracting private capital for vital infrastructure modernization.

Key Points: India's $145B Annual Energy Investment Gap: Report

  • $145B annual investment needed
  • Coal production target on track
  • Natural gas demand to double by 2050
  • Grid modernization is critical
  • Solar supply chain alternative to China
2 min read

India needs $145 billion in annual investments to meet energy transition goals: Report

Report says India must invest $145B yearly in power, storage, and grids to meet net-zero goals while balancing coal and gas demand.

"India is uniquely positioned to become one of the world's most credible, large-scale alternatives to the Chinese solar and battery supply chain. - Wood Mackenzie Report"

New Delhi, Jan 27

India's energy sector must mobilise about $145 billion a year to bridge the gap between its robust economic expansion and ambitious net‑zero pathways, with the investments concentrated in power generation, storage and urgent grid modernisation, a report said on Tuesday.

The report from energy and natural resources data analytics firm, Wood Mackenzie, said India remains on track to reach its 1.5 billion tonnes coal production target by 2030 with increasing emphasis on coal gasification to diversify the energy mix, the report said.

The data analytics firm forecasted natural gas demand to double from 72 billion cubic metres in 2024 to over 140 billion cubic metres by 2050, with industry accounting for over two‑thirds of demand through 2030 and above 55 per cent until 2050, the report said.

Though the report cited many gaps between India's growth and climate, it maintained that "India is uniquely positioned to become one of the world's most credible, large-scale alternatives to the Chinese solar and battery supply chain."

As global markets seek to diversify their procurement, India's maturing manufacturers ring ecosystem offers a distinct competitive edge, the report said.

Joshua Ngu, Vice Chairman, Asia Pacific at Wood Mackenzie, urged that India must de-risk its immediate energy security while simultaneously building the low-carbon architecture required to support a top-tier global economy.

"The $1.5 trillion investment between 2026 and 2035 for energy transition is not just about adding megawatts; it is about the wires," said Rashika Gupta, Vice President, Power and Renewables Research at Wood Mackenzie.

Success hinges on the pace of market reforms, specifically the Electricity Amendment Bill to improve distribution competition and provide the transparent investment signals needed to unlock private capital for grid modernisation, Gupta added.

Despite the acceleration of the energy transition, the firm noted that hydrocarbon fuels remain fundamental to near-term stability.

The firm forecasted that India's crude oil import reliance could reach 87 per cent by 2035 and urged revitalisation of the upstream sector and attract international oil companies to Indian exploration and production (E&P).

- IANS

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Reader Comments

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Priya S
Becoming an alternative to China's solar supply chain is a golden opportunity for 'Make in India'! 🇮🇳 This could generate so many jobs and boost our manufacturing sector. But we must ensure the technology and quality match global standards. Let's hope the policy framework supports this vision.
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Aman W
The report talks about doubling gas demand but also 87% oil import reliance by 2035? That's worrying. Energy security means reducing imports, not increasing them. We need to push much harder on domestic renewable energy and maybe even reconsider nuclear options. Can't keep depending on volatile global markets.
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Sarah B
As someone working in the infrastructure sector, I appreciate the focus on "the wires" - the transmission and distribution network. Building solar parks is one thing, but getting that power efficiently to homes and factories without massive losses is the real challenge. The Electricity Amendment Bill is crucial.
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Karthik V
Coal gasification and still targeting 1.5 billion tonnes production? 🤔 This seems like a contradictory path. We should be aggressively phasing down coal, not finding new ways to use it. The investment should be overwhelmingly in solar, wind, and storage, not in propping up fossil fuels. This is a respectful criticism of the strategy.
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Nisha Z
For the common person, all this talk of billions and transition means little if electricity bills keep rising. The transition must be just and affordable. Hope the plan includes support for middle-class families to adopt rooftop solar and EVs, not just big industrial projects.

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