Low-cost finance for energy transition ? IRENA

Low-cost finance for energy transition – IRENA

News: A recent report called 'Low-cost finance for energy transition,' released by the International Renewable Energy Agency (IRENA), has recognized and praised India's outstanding progress in expanding its renewable energy capacity.

About India’s renewable energy story:
 The renewable energy sector has seen unprecedented growth driven by national targets of 175 GW of renewable energy capacity by 2022 and 500 GW of non-fossil fuel capacity by 2030.
 India ranked third on the Renewable Energy Attractive Index in 2021, and its solar and wind power base is the fourth largest in the world.
 The Indian Renewable Energy Development Agency Limited (IREDA) has promoted emerging technologies such as battery energy storage systems, green hydrogen electrolysers, e-mobility, and waste-to-energy through innovative financing policies.
 India Sovereign Green Bond Issuance to mobilize private sector capital for sustainable development and lower the cost of capital for green projects by tapping into new investors.

Key Highlights of Report:
 The Renewable power generation technologies, notably solar photovoltaic and onshore wind power, have become mature and competitive. Additionally, technology such as offshore wind, hydrogen electrolysers, heat pumps, energy storage should be deployed faster and at greater scales.
 The report recommends policies to support industry innovation especially during the early R&D to foster commercially mature solutions with reduced costs.
 Investment in energy transition technologies: With a focus on renewable energy, energy efficiency, electrification and enabling infrastructure – end-use electrification – to fully capture the benefit of renewable power.

Way Forward
 The report recommends using wide ranging experience of EU countries both in terms of getting access to technology and on innovative financing solutions to reduce the cost of capital.
 It highlights the importance of Domestic financial markets as they provide diversified funding sources (corporate bond markets) to avoid currency risk and help mitigate macroeconomic shocks.