India currently generates around 70% of its electricity from coal, a critical fuel supporting various heavy industries including steel and cement. To achieve net zero emissions by the mid-century and aid global efforts to combat severe planetary warming, India must invest an estimated $12.7 trillion in its energy system, which is over three times its gross domestic product, according to BloombergNEF (BNEF).

In BNEF's ambitious 2050 projection, India's power-related emissions would peak in 2024, necessitating a swift transition to clean up the nation's coal-dependent electricity sector. This shift involves significant grid investments to manage variable renewable energy and a substantial increase in funding for green energy.

Despite substantial expansion in renewable energy, India remains the third-largest emitter of greenhouse gases, mainly due to its heavy reliance on coal for electricity and industries like steel, cement, and aluminum. BNEF reports that India added a record 16 gigawatts of utility-scale solar capacity in 2022.

Realizing the 2050 investment target in line with global climate objectives requires a yearly investment of $438 billion until 2050. Cumulative investments for expanding power generation capacity must reach $2.8 trillion by 2050, with over $2.7 trillion designated for low-carbon initiatives.

However, this immense funding requirement raises challenges, and Indian banks alone may not be able to meet the demand. Global capital has been cautious, with many major pension and sovereign wealth funds refraining from investing in India's renewable energy sector. Challenges in India's power market efficiency, along with international factors such as the US Inflation Reduction Act and European clean energy investment initiatives, have also impacted investment.

To overcome these challenges, BNEF suggests India should establish sector-specific decarbonization strategies and implement policies that attract global and domestic financing sources.

In BNEF's 2050 scenario, power-related emissions would peak in 2024, with transport sector emissions reaching their highest point in 2028 due to increased electric vehicle adoption. Industrial emissions are projected to peak in 2031, followed by a rapid decline, supported by technology advancements like green hydrogen and carbon capture.

In the context of road transport, widespread electrification will demand robust charging infrastructure and affordable clean power. BNEF's net zero scenario suggests that India could potentially reduce its fossil fuel imports by 2050, inching closer to Prime Minister Narendra Modi's goal of energy self-sufficiency by 2047, marking India's 100 years of independence.

In a less aggressive scenario based on technology-driven changes, rather than policy shifts, India's power mix would still see improvements, but emissions would rise over a fifth compared to 2021 levels. India aims to decrease the emissions intensity of its GDP by 45% from 2005 levels by 2030 and achieve half of its power generation capacity from clean sources like solar, wind, nuclear, and hydropower by the end of the decade.