Priority area Renewable energy and energy efficiency Fostering the energy transition in India
In India, there is a gap between energy supply and energy demand. Energy consumption is growing significantly as a result of population and economic growth. At present, India is still relying on fossil energy for over 90 per cent of its energy generation – mainly coal. Existing power stations are partly antiquated, cause high levels of CO2 emissions and are not always able to fully meet the increased demand for energy. This means that India's energy policy has a direct influence on the global climate.
On the one hand, power supply in India – above all in rural areas – still falls well short of demand. This shortage is also severely hampering economic development. On the other hand, India's large population and its rising urban middle class with its high level of energy consumption make the country the world's third-largest emitter of carbon dioxide.
That said, per capita emissions in India are relatively low. In 2021, they were 2.8 tonnes, compared with 8.9 tonnes for Germany and an average of 6.9 tonnes worldwide. Furthermore, although about 18 per cent of the global population lives in India, the country only produces 7.3 per cent of global greenhouse gas emissions (all figures in this paragraph from Our World in Data (External link)).
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 80 million tonnes of carbon dioxide a year.
Renewable Energy Partnership
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 Renewable Energy Partnership 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 energy, including in agriculture, the integration of renewable energy sources into the power grid, and, in the future, the use of 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 this electricity into India's overstretched national grid constitutes a bottleneck. 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.
As at: 06/06/2023