Key Takeaways

• Rajasthan, Gujarat, and Arunachal Pradesh present the highest risks to India’s renewable energy growth by 2030.
• Rajasthan leads with a $16.4 billion Value at Risk from solar energy projects.
• Effective multi-hazard stress testing is essential for safeguarding renewable projects and should be standard practice.

High-Risk States for Renewable Energy Expansion

A recent analysis by Zurich reveals that Rajasthan, Gujarat, and Arunachal Pradesh carry significant risks to India’s renewable energy ambitions ahead of 2030. The report emphasizes that prioritizing resilience in these states is crucial for supporting India’s ongoing renewable energy build-out.

Rajasthan, as the largest renewable energy producer in India, is particularly vulnerable. The state hosts 272 assessed sites with 82,149 MW of planned capacity, representing the highest absolute Value at Risk (VaR) at $16.4 billion. The analysis indicates that 85% of Rajasthan’s assets fall into critical risk categories, with extreme temperatures frequently exceeding 50°C adversely affecting both solar panels and auxiliary systems. This state is pivotal to India’s goal of achieving 500 GW of non-fossil fuel energy.

Gujarat ranks second, with 172 sites contributing 47,530 MW through solar and wind power. The report identifies a $8.6 billion VaR, with 90% of its assets in critical risk categories. Gujarat’s hazard profile is complex; besides sharing similar risks with Rajasthan, its extensive coastline also exposes it to cyclone and storm surge threats that could impact coastal solar and wind installations. Rising demands, driven by an expanding electric vehicle manufacturing sector and ambitions for green hydrogen, further complicate Gujarat’s energy landscape.

Arunachal Pradesh presents a unique risk profile, with just 30 assessed sites carrying a substantial VaR of $13.1 billion. Alarmingly, 96% of these assets are categorized in the highest risk categories due to the state’s predominance in hydropower production. The eastern Himalayan region where these assets are located faces severe risks stemming from high precipitation, slope instability, seismic activity, and flooding.

Other Indian states exhibit varying levels of risk. Karnataka boasts the lowest critical-risk rate at only 5%, while Uttarakhand presents a stark contrast with 94% of its assets falling into the highest risk categories due to severe Himalayan hydrology and precipitation volatility. Uttar Pradesh also faces significant risks, with 78% of its renewable assets categorized as high-risk, largely due to flood exposure from the Ganga River system and increasing occurrences of extreme heat.

Zurich underscores the importance of conducting multi-hazard stress tests on critical projects to effectively gauge the difference between the identified Value at Risk and potential losses when mitigation actions are applied. The report argues for adopting forward-looking climate screening as a standard procedure in site selection, project approvals, and permitting processes, to enhance the resilience of renewable energy projects across these high-risk regions.

The content above is a summary. For more details, see the source article.