India’s energy needs are immense, fueled by a rapidly growing population and industrial sector. Traditional fossil fuels have dominated the energy mix, but their environmental impact and the volatility of global oil prices have prompted a shift towards greener alternatives.
This shift has boosted interest in energy stocks as investors pursue sustainable, high-growth opportunities. The transition to green energy in India gained significant momentum with the launch of Government initiatives. In this article, we will cover all you need to know about this.
Key Reasons Behind the Growth of Green Energy
In this section, let’s delve into the primary factors driving the explosive growth of green energy in India:
1. Government Support and Policy Framework
The Indian government has made substantial strides in promoting green energy through various policies and initiatives. In 2023, the National Green Hydrogen Mission was launched, aiming to produce 5 million metric tons of green hydrogen annually by 2030. This initiative reflects a broader commitment to achieving 500 GW of non-fossil electricity generation capacity by 2030.
Furthermore, the establishment of a National Grid facilitates the distribution of renewable energy, making it more accessible to consumers. These supportive policies create a conducive environment for investment and innovation in the green energy sector, fueling growth for green energy stocks.
2. Technological Advancements
India’s renewable energy capacity reached 152 GW in 2024, with solar and wind playing key roles. Solar open access capacity grew 153% in the first half of the year, reaching 3.6 GW, driven by low-cost modules and favorable policies.
Karnataka led with over 30% of the additions. Technological advances in energy storage and grid management have improved the reliability of renewable energy despite challenges in land acquisition and transmission.
3. Economic Viability of Renewable Sources
Green energy’s financial advantages are becoming more and more obvious. It is both environmentally and financially prudent to switch to renewable energy sources, as demand for energy is expected to increase by 35% by 2030.
Businesses and consumers have strong incentives to switch to more environmentally friendly options because renewable energy sources are frequently less expensive than conventional fossil fuels.
Investors monitor companies involved in this industry, for example, Adani Green share price, which is ₹1600+ as of Nov ‘24. It reflects confidence in companies advancing green energy.
4. Climate Change and Environmental Needs
India’s move to renewable energy is consistent with its commitment to the Paris Agreement, which calls for net-zero emissions by 2070 and a 45% reduction in GDP emissions intensity by 2030.
The government also intends to generate more than 50% of its electricity from non-fossil sources, reflecting its involvement in global climate initiatives. These efforts demonstrate India’s commitment to sustainable development and tackling climate change.
5. Investment in Infrastructure and Green Technology
To support its green energy ambitions, India needs substantial investment in infrastructure. Projections indicate that nearly half a trillion dollars will be required to meet the anticipated growth in energy demand and infrastructure development.
Investment in green technology is crucial for enhancing the capacity and efficiency of renewable energy systems, ensuring they can meet the energy needs of a growing population.
Conclusion
India’s green energy revolution is a multifaceted process driven by government support, technological advancements, environmental concerns, economic opportunities, and the pursuit of energy security.
As the nation continues to invest in renewable energy, it sets a precedent for other countries striving for sustainable development. The interplay of these factors will shape the future of India’s energy landscape, positioning it as a leader in green energy innovation.