A new report predicts that investments in a number of startup companies trying to decarbonize the economy will cause a significant shift in the Indian energy transition landscape over the course of this decade. Investors have the chance to invest $25 billion annually in the area.
This new research report by Avendus Capital in collaboration with Clean Energy Pipeline, an independent research firm based in the UK, focuses on energy transition and clean energy investment in India, in collaboration with Clean Energy Pipeline.
Avendus commissioned a poll from Clean Energy Pipeline as part of the study, and it received over 2,000 responses. The survey was designed to determine the level of interest among international investors in India's clean energy sector. It revealed that significant organisations and investors from around the world have been interested in decarbonization as a result of strong economic growth. A few significant businesses and investors who took part in the poll were also interviewed for the research, including SUSI partners, Actis, ABB, and Ikigai Capital.
The survey highlights that throughout the course of this decade, the landscape of clean-tech participants in India is expected to shift significantly. The energy shift will be aided by numerous new businesses and business strategies as well as existing enterprises increasing their product lines.
Prateek Jhawar, Managing Director and Head, Infrastructure & Real Assets Investment Banking, Avendus Capital said, “Over the last few decades, any mention of the cleantech sector has become synonymous with renewable power producers. The fact is that only about 20% of final energy consumed is in electrified form. Investments in decarbonisation of the balance 80% share will require and witness participation from a multitude of players in addition to renewable power producers and its current ecosystem.”
Jhawar states that the Indian energy transition sector saw a surge in investment interest in 2022 despite the global economic recession. “We believe India will continue to be at the forefront of global decarbonisation efforts. In our view, Green Hydrogen will be the next big wave in energy transition globally, while green ammonia will provide viable end uses in the short term,” he adds.
Over the past five years, India's renewable energy sector has drawn yearly investments of over $10 billion, with project finance investments expected to reach $16.6 billion in 2021. According to early projections by Clean Energy Pipeline, project finance increased dramatically in India in 2022 as well.
The research reveals that the management of grid load is essential to meeting India's rising energy demand. Both the Pump Storage Hydro and the Battery-based Storage Project will receive investments.
According to the report, substantial expenditures are needed to support the expanding EV penetration in India.
“Carbon capture, utilisation and storage industry is in nascent stages and commercially-viable business models will have to be developed for it to become an attractive investment proposition,” says the report.
Another key message that comes out of the study is that Indian companies are coming up with service oriented solutions for energy delivery and management.