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Moody's Ratings in its latest report has said that India's power sector - the biggest carbon emitter - will need massive $700 billion investment over the next 10 years to help the country achieve its 2070 net-zero pledge. Stating that the power sector accounts for around 37 per cent of carbon emissions in the country, it said the investments required by the power sector during fiscal 2026-51 to be of the order of 1.5 per cent to 2 per cent of GDP (around 2 per cent for the next 10 years), which is manageable for India. 

According to the report, the sector, which currently is highly dependent on coal-fired generation, has to make significant decarbonization investments for the country to meet its emission cut goals. It said ‘our expectation of strong economic growth over the next 10 years implies an expansion of India's coal-based power generation capacity in that period, hindering carbon transition.’

Moody's pegged power sector's annual investment requirement between Rs 4.5 lakh crore to Rs 6.4 lakh crore ($53 billion to $76 billion) of investment until fiscal 2034-35 (fiscal year ending March 2035), and around Rs 6 lakh crore to Rs 9 lakh crore annually over fiscal 2026-51. It said ‘we estimate India's power sector investments would be in the range of Rs 4.5 lakh crore to Rs 6.4 lakh crore ($53 billion to $76 billion) until fiscal 2034-35 (total investment of around $700 billion over the next 10 years), and Rs 6.0 lakh crore to Rs 9.5 lakh crore annually over fiscal 2025-51’.

The report said the power sector investments include capital spending for electricity generation (including renewable energy, coal and nuclear power), electricity transmission and distribution and energy storage. Annually, this represents 2 per cent of real GDP over the next 10 years, and 1.5-2 per cent of GDP over fiscal 2026-51. These investments are significant and will be funded jointly by the public and private sectors and foreign and domestic capital.