India's Energy Transition Requires Massive Investment Despite Continued Coal Dependence: Moody's-ICRA

(MENAFN- KNN India) New Delhi, Jun 5 (KNN) India will need substantial investment to meet its ambitious 2070 net-zero emissions target, particularly in the power sector, according to a joint report released by Moody's Ratings and ICRA.

The analysis projects that over the next decade, these investments will constitute approximately 2 percent of the country's real GDP for the electricity value chain, which includes power generation, storage, transmission, and distribution infrastructure.

The report emphasises that India must navigate the complex balance between energy security, affordability, and the transition to cleaner energy sources.

Despite the push toward renewable energy, India's rapidly growing economy will continue to depend on coal in the short to medium term.

The study anticipates a 32 to 35 percent increase in coal-based generation capacity, equivalent to approximately 70-75 GW, over the next 10 years, alongside the addition of 450 GW in renewable capacity.

"We expect the private sector to remain active in India's renewable energy sector, while government-owned companies will also increase their role," stated Abhishek Tyagi, Vice President and Senior Credit Officer, Moody's.

He noted that solar and wind power will dominate new generation capacity additions over the next 20-25 years, with smaller contributions from nuclear and hydropower sources.

The report also forecasts a slowdown in road project execution in the near term, despite a healthy budgetary allocation of ₹2.72 trillion for the Ministry of Roads, Transport and Highways (MoRTH) for FY2026.

Ashish Modani, ICRA's Senior Vice President and Group Head of Corporate Ratings, explained that road awarding is projected to improve only in the second half of FY2026, leading to subdued revenue growth for road developers over the next 12-15 months due to the typical 6-9 month lag between project awarding and on-ground execution.

In contrast, ports and data centers are emerging as key growth areas for infrastructure development.

Under the Maritime India Vision 2030, the government has committed substantial capital expenditure to expand port capacity. ICRA anticipates a 3 to 5 percent increase in cargo volumes in FY2026, driven by containerised cargo, petroleum products, and fertilisers, though global trade and tariff uncertainties present potential risks to this growth trajectory.

(KNN Bureau)

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