APAC to Invest $3.3 Trillion in Power Generation with Focus on Renewables: Report

India offers significant untapped opportunities for further renewable energy investments

October 6, 2023


The Asia Pacific (APAC) region is forecast to invest $3.3 trillion in power generation over the next decade, with a strong focus on renewables.

Wind and solar energy would account for 49% of the investment, while energy storage would receive 12% of the total investments, as per Wood Mackenzie‘s latest analysis.

In the coming five years, the region is set to add 1,840 GW of new capacity, outpacing the rest of the world combined, as India and China invest in a mix of coal and renewables to address escalating power needs.

India, the second-largest power market after China in the region, wields a pivotal role in the global energy transition, driven by its substantial economic growth and soaring power demand. The country’s cost-effective renewables, the most affordable globally, have spurred the rapid adoption of large-scale wind and solar projects, boosting the renewables’ share of power generation to 22% in 2022, with wind and solar representing nearly half of this share.

India faces a dual challenge: aiming for carbon neutrality by 2070 while heavily investing in over 50 GW of new coal power projects. Despite fossil fuels currently supplying 75% of India’s power (with a declining trend) and per capita power sector emissions expected to peak in a decade, it is unclear if this will enable a successful low-carbon transition.

Wood Mackenzie said India needs a substantial $350 billion investment in power generation over the next decade to address this challenge. This investment offers opportunities in renewables, encompassing utility solar, onshore and offshore wind, hybrid renewables, and energy storage projects, paving the way for a cleaner and more diverse energy mix while driving the adoption of new technology.

In a recent report, Wood Mackenzie in its latest report on India explored how India can reach its 2070 net zero emissions goal through a radical transformation involving a significant shift to zero-carbon energy sources, substantial electricity generation growth, a decrease in fossil fuel usage, adoption of low-carbon hydrogen and carbon capture, and the integration of electric vehicles, niche technologies, and enhanced energy security.

In another report last November, Wood Mackenzie pointed out that Indian firms have led in green energy procurement in the Asia Pacific for the last two consecutive years, securing 8.1 GW of capacity and representing 89% of the region’s contracted renewables, driven by competition, rising energy costs, and the attractiveness of open access initiatives, rooftop solar installations, and power purchase agreements.

A recent study by the International Energy Agency and International Finance Corporation also emphasized that despite growing clean energy investments, there is still a need and urgency to ramp up investments in this sector worldwide, including in India.

Developing countries (excluding China) must nearly septuple their clean energy investments to reach $1.4-1.9 trillion annually by the early 2030s, creating opportunities for sustainable growth, job creation, and universal energy access by prioritizing clean electrification, grid enhancements, and efficiency to meet climate and development goals.