In a report released by KPMG and unveiled by Minister of Petroleum & Natural Gas and Housing & Urban Affairs Hardeep Singh Puri, a remarkable annual investment demand of USD 4.5 trillion in the energy sector until 2050 has been highlighted. The report underscores the urgent need for a rapid and extensive shift in energy practices, signaling a substantial global investment prospect."
The urgency behind this transition is driven by the compounding factors of rapid growth and climate change, making it a focal point in the global energy landscape, according to the report.
Moreover, this transition is driven by India's expanding population and its infrastructure development initiatives, necessitating a fast-tracked energy shift. By 2047, India needs to secure an average annual investment of USD 350 to 400 billion to realise its clean energy goals, the report mentioned.
“A transition to clean energy is a huge economic opportunity for a country like India. The growing economy needs more energy than ever, and energy needs resources, materials, and manufactured products and systems. Beyond energy project development, where India has excelled, the full value chain needs addressing," said Anish De, Global Head, Energy, Natural Resources, and Chemicals (ENRC), KPMG International.
"To ensure a successful energy transition, it is imperative to reimagine supply chains, addressing the centralization of supply chains, which poses a considerable risk due to overreliance on a single country. Diversification of renewable energy supply chains through strategies like the China + 1 approach becomes imperative," the report added.
The report highlighted that clean technology manufacturing is a beacon of opportunity in India, offering a cumulative market opportunity of USD 300 to 400 billion by the end of the decade.
With high captive demand, robust manufacturing clusters, government support, and unique domestic capabilities, India stands as a formidable contender in this domain, according to the KPMG report.
Sharing her views, Anvesha Thakker, Partner and Industry Lead, Clean Energy, KPMG India, said, “India as a country has the ingredients to emerge as a credible alternate frontier for clean technology manufacturing, but the industry must strengthen its manufacturing and sourcing strategy and focus on value engineering, effective expansion management, digital technologies, and other levers to grow."
The findings of the report also conveyed that positioned between Europe and China, India holds the ingredients to emerge as a clean technology manufacturing hub. However, strengthening manufacturing and sourcing strategies is essential to fully unlocking this potential, the report mentioned.
Expounding on geopolitical situations, De added, "Geopolitical upheavals have brought to the fore the broader challenges of energy security and the risks that they pose for many countries, especially India. As a very large energy importer, India needs to find alternatives that make the country less vulnerable. For this, it is extremely important that India gets its manufacturing and supply chain story right, as it would serve not only the nation but also de-risk the world."
Additionally, as per KPMG in India estimates, the energy transition could create the need for 5 to 6 million jobs by 2030 and 9 to 10 million by 2047, of which approximately 30 per cent is expected in manufacturing when we consider not only the local requirements but the global demand for talent and the requirements of the global capability centres of energy majors in India.
"This would require a comprehensive skilling strategy to address the demand for deep skills while also ensuring rapid talent development at scale," Thakkar added.
Thakkar noted that if we get our strategy right, we can really convert these areas of opportunity through policies, robust supply chain strategies, creating an ecosystem that focuses on innovation, debottlenecking financing through innovative commercial frameworks and instruments, and other measures.
In conclusion, the path ahead involves policies, robust supply chain strategies, an innovation-focused ecosystem, and innovative financing frameworks. The clock is ticking, but the possibilities are boundless as India steers towards a brighter, cleaner energy future.