The crisis engulfing India’s Adani Group highlights the need for India to further expand its sources of green energy investment and production beyond a heavy dependence on a few private conglomerates, analysts say.
The sector could see a slowdown in investment amid the fallout of the Adani crisis, although experts say that the country’s renewable energy industry is in a strong position to withstand any effect.
“The Adani-Hindenburg crisis does highlight the importance of diversifying the sources of investment and financing for India’s renewable energy ambitions,” says Ashwini Kumar, a green hydrogen consultant and climate advocate.
“The Indian energy sector is changing rapidly and the need for fresh and substantial investments limits the number of companies that have the wherewithal to make the required investments in this sector.”
Billionaire Gautam Adani has seen the market value of his listed companies plunge by more than $100 billion since US short-seller Hindenburg Research released a scathing report last month accusing the group of financial irregularities.
While the conglomerate covers a range of sectors in its portfolio, including ports, airports and media, it has become increasingly focused on green energy development in recent years.
This follows the Indian government’s plans to increase the role of renewable energy in the country, as its appetite for power grows and the country looks to bring down carbon emissions, with the aim of achieving a net-zero target by 2070.
Prime Minister Narendra Modi’s government has said that it is committed to meeting a target of producing 50 per cent of its electricity requirements from renewable energy sources by 2030.
On its website, the Adani Group says it is “a significant contributor to this vision by harnessing the power of solar and wind energy”.
However, Mr Adani has, over the years, made billions of dollars from his coal empire, which has continued to expand, with his group operating mines in India, Australia and Indonesia.
India is the world’s second-largest consumer and producer of coal, and Adani Enterprises has emerged as one of the largest developers of coal mines in the country.
The company is also one of the biggest importers of the fossil fuel, which is a major contributor to pollution. Given India’s fast-growing appetite for power, the country is not expected to be able to scale back its demand for coal in the near future.
However, as India seeks to increase its green energy production to help meet rising demand, Adani has earmarked $70 billion of investment for the industry, with the aim of becoming the world’s top renewable energy producer by 2030.
Adani, which says it currently has 20 gigawatts of renewable energy capacity, is aiming to generate an additional 45 gigawatts by 2030.
Its projects include a solar power plant spread across 1,000 hectares in Kamuthi, in the state of Tamil Nadu, which can generate 648 megawatts.
It further intends to build three giga-factories to manufacture solar modules, hydrogen electrolysers and wind turbines. The group has also said that it plans to produce the world’s cheapest green hydrogen.