CRISIL Calls for Policy Support to Boost Green Energy Demand in Budget 2025
As India gears up for its Union Budget 2025, CRISIL, the prominent ratings agency, has made a compelling call for the government to drive demand for emerging renewable energy technologies. According to Rahul Prithiani, Senior Director & Global Head of Energy and Sustainability at CRISIL, a clear policy focus on these emerging technologies, especially green hydrogen, is crucial to creating a conducive environment for growth in the renewable sector.
“Creating demand is key to driving the renewable energy sector forward,” Prithiani stated. He emphasised the need for government intervention to support the adoption of green energy technologies through incentives and strategic policy measures. Green hydrogen, for example, requires not only technological innovation but also a supportive framework to encourage its widespread use, which remains underdeveloped in India.
CRISIL forecasts a massive surge in green energy investments, predicting a fivefold increase by 2030, totalling over Rs 31 lakh crore. This significant leap will be crucial for India’s clean energy goals, which align with the country’s commitment to the Paris Agreement on climate change. A large portion of the investment, Rs 19 lakh crore, will be allocated to storage and renewable energy, while Rs 4.1 lakh crore will focus on the transportation and automotive industries, including electric vehicles (EVs). Around Rs 3.3 lakh crore is expected to go into the oil and gas sector as part of India’s broader decarbonisation strategy. This comprehensive investment will aid in meeting the nation’s energy demands while transitioning to a cleaner, more sustainable future. Amish Mehta, Managing Director & CEO of CRISIL, elaborated on the necessity of government action in his remarks at the India Infrastructure Conclave 2025. “Accelerating grants and incentives, scaling up blended finance initiatives, and providing policy support are essential to drive initiatives for carbon market development and industrial decarbonisation,” he said, reinforcing the urgency of robust government backing.
For emerging renewable technologies such as green hydrogen, carbon capture, utilisation and storage (CCUS), and energy storage solutions, the Indian government must create a policy landscape that provides clarity and security for investors. The development of these technologies is capital-intensive, and while debt financing is readily available for established sectors like solar and wind energy, high-risk technologies face challenges in securing adequate funding. Government funding and incentives are pivotal for de-risking investments in high-tech solutions. CRISIL highlighted that blended finance, which combines public and private capital, could play a crucial role in bridging the gap for high-risk, high-investment projects. Moreover, international collaboration through organisations like the International Solar Alliance can help with technology transfers, concessional funding, and expertise sharing. India’s commitment to decarbonisation under the Paris Agreement demands investments of approximately $10 trillion by 2070. The country has pledged to raise the proportion of power generated from non-fossil fuel sources to 50% and reduce the carbon intensity of its GDP by 45% by 2030. This ambitious plan relies heavily on the scaling up of renewable energy technologies and the decarbonisation of industrial processes.
However, financing large-scale investments remains a challenge. CRISIL notes that while solar, wind, and EV projects have access to relatively lower-risk financing, newer technologies like green hydrogen and CCUS require substantial government backing to make them viable. This support will be critical in enhancing project feasibility and attracting private sector investments. The financing landscape for emerging green technologies can be divided into low-risk and high-risk categories. For low-risk projects, there is significant debt financing available, driven by strong capital markets and development finance institutions. For high-risk ventures, however, government support and incentives will be critical to attracting private investments, particularly from specialised climate and venture funds.
Moreover, as green technologies evolve, international partnerships and funding schemes will become increasingly important. CRISIL’s report stressed the importance of cooperation between public and commercial sectors, as well as international stakeholders, to accelerate the transition to a greener economy. As India strives to meet its renewable energy and decarbonisation targets, the role of emerging technologies cannot be overstated. The upcoming Union Budget presents a crucial opportunity for the government to set the tone for the future of India’s energy transition. With the right policies in place, including the scaling of financial support and fostering innovation, India can lead the way in green energy while simultaneously driving economic growth. Through the concerted efforts of the public and private sectors, alongside international collaboration, India can meet its ambitious climate goals and establish itself as a global leader in sustainability.
