Sectoral Analysis: Green Energy

Sectoral Analysis: Green Energy

The Indian green energy sector aims to reach $80 billion by 2030. India aims to meet its rapidly growing energy demand with 50% renewable energy by 2030 and net-zero emissions by 2070 through government initiatives and renewable capacity growth. The sector’s growth, investments, key projects, and Indian green energy stocks are covered in this article.

Growth in Green Energy

India ranks fourth in wind and solar energy capacity as of 2023. From FY16 to FY23, India’s renewable capacity grew 15.4% CAGR to 125.15 GW. New renewable installations are expected to double by 2026 with strong policy support and investor interest. By 2040, renewable energy will be essential to meet India’s 15,820 TWh demand, with local production reducing imports.

Recent Investments

India’s 2024 Union Budget allocated ₹19,100 crore to the Ministry of New and Renewable Energy, a significant increase from the previous budget. Key funding includes ₹851 crore for renewables, ₹600 crore for the National Green Hydrogen Mission, and ₹300 crore for bioenergy. By March 2025, India’s renewable capacity is expected to reach 170 GW from 136.57 GW in December 2023.

SWOT Analysis

Strengths

  • Government Support: Policies like the National Green Hydrogen Mission and agreements for large projects, such as NTPC’s 28,500 MW renewable project in Rajasthan, underscore government backing.
  • Expanding Capacity: India aims for 500 GW in renewables by 2030, intending to lead in green hydrogen production.
  • Environmental Impact: Emphasis on green energy supports India’s net-zero commitment for 2070.

Weaknesses

  • New renewable infrastructure requires large initial investments.
  • Technology Dependence: Solar equipment imports reduce cost efficiency and timelines.
  • Reduced infrastructure makes renewable energy integration into the power grid difficult.
  • Periodic policy changes may affect investor confidence and project continuity.

Opportunities

  • Renewable Project Expansion: PM Surya Ghar Muft Bijli Yojana encourages rooftop solar.
  • Green Hydrogen and Battery Storage: India aims to produce 5 million tonnes of green hydrogen by 2030, inspiring electrolyser production.
  • Global partnerships: Sovereign Green Bonds and international agreements could boost investment.
  • Rural electrification: Renewable energy can boost rural energy access for sustainable cities.

Threats

  • Policy instability: Regulations may delay projects.
  • With thermal energy expected to generate over 50% of India’s power by 2030, fossil fuels remain competitive.
  • Technological dependence on imports makes the sector vulnerable to supply chain disruptions.

Key Projects

Several high-impact projects advance India’s green energy goals. NHPC’s 200 MW solar project in Gujarat’s Khavda renewable park, worth ₹846.66 crore, is a recent development in the sector. In 2024, Adani Green Energy and Adani Energy Solutions joined the Utilities for Net Zero Alliance, promising dramatic renewable capacity and sustainable energy sourcing increases by 2030.

Green Energy Stocks in India

Some notable green energy stocks by market capitalisation as of September 2024 include:

  • Adani Green Energy Ltd: ₹3,17,432.19 crore
  • NHPC Ltd: ₹95,076.25 crore
  • SJVN Ltd: ₹51,205.23 crore
  • Premier Energies Ltd: ₹49,999.89 crore
  • Jaiprakash Power Ventures Ltd: ₹11,664.59 crore

Note: These stocks are examples, not recommendations. Consult a professional before investing.
Indian green energy has great potential, but policy stability, technology, and investment frameworks must be addressed for sustainable growth.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.