Moody’s Upbeat about India’s Power Sector Growth

On 6th June, 2024, Global rating agency Moody’s has expressed strong confidence in the growth trajectory of India’s power sector.

Key Points

Renewable Energy & Electricity Transmission: Rating agency highlighted that investments in renewable energy and electricity transmission will continue to drive the sector over the next six to seven years.
Power Demand: The agency expects power demand in India to grow by 5 to 6 percent annually.
Base Load Requirements: It noted that coal-based generation capacity additions will likely support base load requirements.
High Financial Leverage: Renewable energy companies, primarily funded by debt, will face high financial leverage over the next three years. However, consistent government regulations and policies supporting the transition to renewable energy will benefit the industry, allowing power companies to advance despite their high debt levels.
44 Gigawatts Requirement: India needs to add around 44 gigawatts (GW) to meet its target of 500 GW of renewable energy capacity by 2030. Achieving this target will require an investment of USD190 billion to USD215 billion over the next seven years.
Share of Renewable Energy: The strong policy support has enabled India to increase the share of renewable energy in its power capacity mix to around 43 percent in the fiscal year 2023-2024.
Green Hydrogen Target: India has set a target to produce 5 million tonnes of green hydrogen by 2030, supported by 125 GW of renewable energy capacity.