A solar engineer checks a solar-powered street lamp.

Priority area Renewable energy and energy efficiency Fostering India’s energy transition

India has announced the ambitious goal of significantly expanding the use of renewable energy sources and reaching an output of 500 gigawatts by 2030 (capacity in 2020/21: about 100 gigawatts). Furthermore, India intends that, from 2030 onwards, half of its electricity will be generated using renewable energy sources. So far, however, the right enabling environment to accelerate the expansion of renewable energies has been lacking. Germany is supporting India in making its power supply more technically and economically efficient, and more socially and environmentally sustainable.

In India, there is a large gap between energy supply and energy demand: energy consumption is increasing unchecked. Some of the existing power station infrastructure is antiquated and causes high levels of CO₂ emissions; these plants are unable to meet the increased demand for energy. More than 60 per cent of India’s electricity is currently generated by burning coal and gas. India’s energy policy also has a direct influence on the global climate.

On the one hand, power supply in India – above all in rural areas – falls well short of demand. This shortage is also severely hampering economic development. On the other hand, India’s high energy consumption, particularly due in part to an aspirational urban middle class, makes it the world’s third-biggest emitter of carbon dioxide.

That said, per capita emissions in India are relatively low. In 2019, they were 1.8 tonnes, compared with 7.9 tonnes for Germany and an average of 4.5 tonnes worldwide. Furthermore, although nearly 18 per cent of the global population lives in India, the country only produces seven per cent of global greenhouse gas emissions (all figures in this paragraph are World Bank figures from 2019).

Germany is supporting India in achieving an environmentally friendly and just energy transition. The ongoing support from the BMZ amounts to around six billion euros. Most of this funding is provided in the form of reduced-interest loans from KfW Development Bank, but part of it is provided in the form of Technical Cooperation. Through the support it is providing in the form of investments and advisory services, Germany is helping to save around 100 million tonnes of carbon dioxide a year.


Partnership for renewable energy

Joint Declaration of Intent on Indo-German Development Cooperation regarding Renewable Energy Partnership

between the Federal Ministry for Economic Cooperation and Development of the Federal Republic of Germany and the Ministry of New and Renewable Energy of the Republic of India

File type PDF | Date of status 05/2022 | File size 127 KB, Pages 4 Pages

In addition to using renewable sources of energy, another main focus of German development cooperation with India is ensuring by means of rural electrification programmes that all households are reliably supplied with electricity.

In October 2015, the Indo-German Solar Partnership with a funding volume of one billion euros was launched. An example for German activities in this context is the construction of the Sakri solar park in Maharashtra, which is now supplying more than 220,000 people with electricity.

Building on the Solar Partnership, in May 2022 the BMZ concluded a Partnership for Renewable Energy with India. For this new Partnership the BMZ is making another one billion euros available up to 2025. The topics covered by the Partnership are the broad use of renewable energies, integrating renewable energy sources into the power grid and using innovative storage technology.

Green energy corridors

Over the last few years, India has significantly stepped up the generation of electricity from renewable energy sources. However, feeding in this “renewable” electricity into India’s overstretched national grid has hit a choke point. Sizeable development loans provided by the Federal Republic of Germany are helping India to upgrade its network of transmission lines (“green energy corridors”), in order to improve the feed-in of power generated from renewable energy sources (such as solar, wind and hydropower) into the national grid. So far, 7,770 kilometres of green energy corridors have been established, providing around 40 million people with electricity from renewable energy sources.

Other important goals of development cooperation in this area are improving energy generating efficiency, reducing power transmission losses, and reducing power consumption in businesses and private households.

As at: 02/08/2022