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Renewable energy outpaces fossils in India: Reports

IANS  |  New Delhi 

Wind and in are now outpacing fossil fuels as investment opportunities providing on average 12 per cent higher annual returns, 20 per cent lower annual volatility and 61 per cent higher risk-adjusted returns than coal and natural gas, reports said on Friday.

Investors also increasingly see as less risky than fossil energy, even though wind and solar are new entrants in the mix.

This is predominantly because of shortcomings that impact profitability of the fossil energy sector in India, such as sourcing issues, import dependency, long construction periods, environmental regulations and more recently low plant load factors and stranded coal and

These are findings from a new series of reports titled "An Assessment of India's Energy Choices" led by Climate Policy Initiative (CPI), the (ISB), (JNU) and the (IIT Delhi).

The series looks at the future of in along different economic dimensions.

From a broader macroeconomic perspective, the studies published under this initiative find that there is a close relationship between economic growth in and growth.

For example, corresponds to lower unemployment, fewer net energy imports, a lower fiscal deficit and a higher GDP over the next 25 years.

Econometric analysis of out to 2042 shows that India could add between two million and 4.5 million jobs in wind and solar.

Despite these strong economic signals, however, the studies indicate that to meet the official target of of 175 GW by 2022, India needs to focus more on strong and also on strong macroeconomic policies.

"Assessing the various direct, indirect, and external costs and benefits of all will reflect the significance of renewables for India's energy future,", said in a statement.

works to facilitate India's transition to a cleaner

"Our work shows that meeting India's is clearly associated with positive impacts for India's economy," said

"Unfortunately, while it is likely that the sector will continue to grow, there are a range of barriers to it reaching its full potential."

The studies indicate that India should prioritize policies that support a strong fiscal environment.

As renewable energy growth is so closely related to economic growth, and vice versa, India can take steps to meet both and growth goals by focusing not only on strong but also on strong fiscal policies.

The authors recommend that policymakers work to address the main investment risk factors for renewable energy.

The study also suggests a near-term path that transitions coal plants to flexibility assets.

CPI's research points out that as renewable penetration grows, overall economic risk of stranding existing fossil assets also increases at the same time that there will be a greater need for flexibility to provide base-load power.



(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Fri, May 18 2018. 17:32 IST