Budgeting for Net Zero

The report analyzes the cost gaps for battery energy storage systems (BESSs), offshore wind, solar PV, electric vehicles (EVs), and green hydrogen (GH2) in India. It finds that while current subsidies are sufficient for solar PV and BESSs, significant additional support is needed for offshore wind, EVs, and GH2. Macroeconomic modeling suggests that bridging these gaps generally boosts GDP and employment, except for GH2, which remains cost-uncompetitive until after 2050.

• Existing Central Government subsidies are sufficient to cover the cost gap for solar PV and battery energy storage systems (BESSs), but only cover 1%–59% of the gap for offshore wind, green hydrogen (GH2), and electric vehicles (EVs).
• The cost gap for BESSs is estimated at INR 2,637 crore (USD 321 million), and the technology is projected to reach cost parity with the benchmark evening electricity tariff by 2028.
• Offshore wind has a substantial cost gap of INR 5.1 lakh crore (USD 61 billion) to reach the 37 GW goal by 2030, with a projected grid parity timeline of at least 12 more years.
• Domestic manufacturing policies for solar PV, including a 40% customs duty, have increased project costs, potentially leading to a shortfall of approximately 20 GW against the 2030 capacity goal of 293 GW.
• To achieve the 30% EV sales target by 2030, demand-side incentives are required for all segments except electric three-wheelers (e3Ws), which have already achieved cost parity.
• Green hydrogen (GH2) is projected to remain uncompetitive against 'grey' hydrogen until after 2050, with current subsidies covering only about 5% of the cost gap.
• Macroeconomic modeling indicates that government support to bridge cost gaps for BESSs, solar PV, offshore wind, and EVs increases GDP, employment, and net revenue by 2050, while GH2 shows a negative benefit-to-cost ratio (BCR) of -0.24.

APA

Raizada, S., Laan, T., Mani, S., Jain, S., Sharma, D., Bassi, A. M., Gangopadhyay, A., Ranjan, U., Molleti, G., Khan, S., Banerjee, B., Gajjar, J., & Pallaske, G. (2024). Budgeting for Net Zero. International Institute for Sustainable Development. https://www.iisd.org/system/files/2024-12/india-budgeting-for-net-zero.pdf

Chicago

Raizada, Swasti, Tara Laan, Sunil Mani, Saumya Jain, Deepak Sharma, Andrea M. Bassi, Anasuya Gangopadhyay, et al. Budgeting for Net Zero. International Institute for Sustainable Development, 2024. https://www.iisd.org/system/files/2024-12/india-budgeting-for-net-zero.pdf.

Wikipedia

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BibTeX

@techreport{raizada2024budgeting, author = {Raizada, Swasti and Laan, Tara and Mani, Sunil and Jain, Saumya and Sharma, Deepak and Bassi, Andrea M. and Gangopadhyay, Anasuya and Ranjan, Upasna and Molleti, Gautham and Khan, Sarah and Banerjee, Bidisha and Gajjar, Jaymin and Pallaske, Georg}, title = {{Budgeting for Net Zero}}, institution = {International Institute for Sustainable Development}, year = {2024}, month = dec, url = {https://www.iisd.org/system/files/2024-12/india-budgeting-for-net-zero.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }