Budgeting for Net Zero

Table of Contents

• Figure ES1. A simplified illustration of the study approach to model cost gap 5
• Figure 1. Diagram mapping the need for government support along the technology S-curve 25
• Figure 2. Summary of research methodology 28
• Figure 3. CLD on the systemic approach for macroeconomic analysis 31
• Figure 4. Global capacity of Li-ion-based battery energy storage systems 34
• Figure 5. Year-wise LCOS projections for stand-alone BESSs 38
• Figure 6. Cost gap as a share of GDP 40
• Figure 7. Net impact on GDP and energy savings 41
• Figure 8. LCOE values for Tamil Nadu and Gujarat 47
• Figure 9. Share of government spending required in different scenarios as a share of India’s GDP 50
• Figure 10. The net impacts of varying the level of government support on GDP, public funding, and private funding 51
• Figure 11. Benefits to cost ratio for CapEx and GBI-based approaches to meet the cost gap 51
• Figure 12. Cumulative emissions avoided by offshore wind generation depending on the source of electricity that the generation replaces 52
• Figure 13. India’s optimal generation capacity mix, as per the CEA 57
• Figure 14. Current status and projected solar PV capacity for India 57
• Figure 15. Summary of projections on India’s cumulative solar PV capacity between 2024 and 2030 58
• Figure 16. Average module prices over the last 3 years in India 62
• Figure 17. Impact of government levers on large-scale solar LCOE 62
• Figure 18. Share of EVs in India’s new vehicle sales, by segment and year 68
• Figure 19. Projected purchase rates across different vehicle segments by 2030 71
• Figure 20. Cumulative hydrogen demand in India from domestic production and imports, 2020 77
• Figure 21. Hydrogen funding by major regions as of October 2023 79
• Figure 22. Comparison of LCOH results from the study with secondary sources 82
• Figure 23. Funding required per kg of GH2 with respect to grey hydrogen in India 83
• Figure 24. Sensitivity analysis for funding required for GH2 with respect to grey hydrogen considering adoption rate in different scenarios 84
• Figure 25. Share of government spending required in different scenarios as a share of India’s GDP 85
• Figure 26. Net impact of varying the level of government support on GDP, public funding, and private funding 86
• Table ES1. Current capacity and goals for key clean energy technologies 4
• Table ES2. The cost gap to achieve India’s 2030 clean energy goals for selected technologies 6
• Table ES3. Macroeconomic impact of providing government support to achieve cost parity for clean energy technologies relative to BAU (cumulative to 2050) 7
• Table 1. Current capacity and goals for key clean energy technologies 20
• Table 2. Technology development phases and government support: A framework for clean energy in India 24
• Table 3. Summary of major government support measures to promote BESS deployment 36
• Table 4. Scenarios considered for GEM analysis 39
• Table 5. The macroeconomic impact of providing government support to achieve cost parity for BESSs relative to BAU (cumulative to 2050) 39
• Table 6. Summary of government support measures to promote offshore wind deployment 46
• Table 7. Cost gap and the expected benefits of achieving the 2030 targets (37 GW) and full potential (of 71 GW) by 2037 48
• Table 8. Summary of government support measures to promote solar PV deployment 59
• Table 9. Summary of government support measures to promote solar PV manufacturing 60
• Table 10. Cost gap between 2024 and 2030 for solar PV 63
• Table 11. The macroeconomic impact of providing government support to achieve cost parity solar PV relative to BAU (cumulative to 2050) 63
• Table 12. EV purchase rates and India’s goals for 2030 69
• Table 13. Summary of major Central Government support policies to support EV adoption 70
• Table 14. Adoption curves used for this study 72
• Table 15. Key findings on future of demand incentives from TCO analysis and resulting purchase rates (adoption refers to % of new sales) 72
• Table 16. Types of hydrogen based on their energy source and production method 76
• Table 17. Government support measures for GH2 80
• Table 18. Summary of investment requirements for two key scenarios for GH2 84
• Box ES1. Estimating the cost gap 5
• Box 1. Policies used by advanced economies and China to promote investment in BESSs 34
• Box 2. The full macroeconomic impact of deploying BESSs up to 2050 40
• Box 3. Validation of LCOE from other relevant sources 47
• Box 4. What do the critics say about meeting the cost gap for offshore wind in India? 53
• Box 5. The full macroeconomic results of achieving the 293 GW goal 64
• Box 6. Strategic public investment in GH2: Unlocking long-term benefits despite high costs 87
• 1.0 Introduction 20
• 2.0 Background 23
• 2.1 Scope and Definitions 23
• 3.0 Approach and Methodology 28
• 3.1 Qualitative 28
• 3.2 Quantitative 29
• 3.3 Macroeconomic Impacts 30
• 3.4 Consultation on Methods and Results 31
• 3.5 Limitations 32
• 4.0 The Power Sector: Battery energy storage systems 33
• 4.1 Background 33
• 4.2 Status of Technology 33
• 4.3 Approach 36
• 4.4 Results 37
• 4.5 Discussion 41
• 5.0 The Power Sector: Offshore wind 45
• 5.1 Background 45
• 5.2 Approach 46
• 5.3 Results 47
• 5.4 Macroeconomic Results 49
• 5.5 Discussion 52
• 6.0 The Power Sector: Solar PV 55
• 6.1 Background 55
• 6.2 Approach 61
• 6.3 Findings 61
• 6.4 Discussion 65
• 7.0 Passenger Transport: EVs 67
• 7.1 Background 67
• 7.2 Macroeconomic Results 73
• 7.3 Discussion 74
• 8.0 Industrial Sector: Green hydrogen 76
• 8.1 Background 76
• 8.2 Approach 81
• 8.3 Results 82
• 8.4 Macroeconomic Results 84
• 8.5 Discussion 86
• 9.0 Conclusion 89
• References 91