India’s Clean Energy Push Faces a Grid Financing Bottleneck, Says Nicki Hutley

India has attracted strong investment in renewable power, but funding for the grid that carries that electricity to homes and businesses has lagged. Australian economist Nicki Hutley told ANI that financing transmission and grid infrastructure was the biggest barrier to India’s clean energy transition, even though global investors have capital available.

“There has been strong investment in renewables and other clean power, but not enough investment in the transmission and grid infrastructure needed to distribute that power,” Hutley said. She said large infrastructure companies also had to navigate regulation and land acquisition before they could build the networks India needs.

Pension Funds Weigh Returns and Risk

“There’s certainly no shortage of capital,” Hutley said, pointing to large pension funds in Australia, the United Kingdom and Canada as potential investors. Whether they commit money depends on the returns a project can offer and how much risk the funds can take on.

Hutley said India could attract more investment by reducing regulatory barriers and bringing down the cost of capital. She called for bringing together the people who can make those decisions, so that companies have a clearer path to raising the money they need for grid projects. The goal, she said, is to turn rising renewable capacity into electricity that the network can actually deliver.

Hutley Calls for a Faster Transition

Hutley said India’s 2070 net-zero target was too far off to meet the goals of the Paris Agreement, even if the country’s emissions peak by 2040. She argued that bringing forward even part of the transition would benefit India and help global climate efforts, provided it could be done without compromising economic growth.

She singled out transport electrification as one area where the benefits could extend beyond emissions. Switching to electric transport, she said, could lower costs and reduce pollution in India while helping advance the goals of the Paris Agreement.

With inputs from ANI