MUMBAI/NEW DELHI: India’s ambitious clean energy transition could face a major climate challenge, with nearly 90% of the country’s planned renewable energy capacity projected to face high or critical climate risk by 2030 unless resilience measures are built into projects from the outset, according to a new climate-risk assessment released by Zurich Kotak General Insurance and Zurich Resilience Solutions.For Maharashtra, however, the findings offer both reassurance and a warning. The state’s planned renewable energy portfolio of 13.6 GW is among the least exposed in the country, with only 26% of projects falling in the highest-risk categories, compared with 90% in Gujarat, 85% in Rajasthan, 96% in Arunachal Pradesh and 94% in Uttarakhand.Yet the report cautions that Maharashtra’s relatively lower risk profile could mask growing vulnerabilities along the cyclone-prone Konkan coast and around Mumbai, where rising temperatures, rapid urbanisation, expanding data centres and industrial electrification are driving some of the country’s fastest growth in electricity demand.As India’s financial capital battles recurring floods, intensifying heatwaves and mounting cooling demand, the reliability of renewable power generation is becoming as critical for Mumbai’s economy as it is for the nation’s energy transition.The report, which analysed 871 renewable energy assets across 10 states accounting for about 267 GW of planned capacity, estimates that renewable assets worth nearly $55 billion (about Rs 4.7 lakh crore) could be exposed to severe climate-related losses within the decade.Floods, wildfires, hailstorms, tornadoes, extreme winds and heat stress have emerged as the biggest threats to India’s rapidly expanding solar, wind and hydropower portfolio.The findings come at a critical juncture as India, now the world’s third-largest renewable energy producer, races towards its target of 500 GW of non-fossil fuel capacity by 2030.The study warns that climate risk is no longer a distant concern but an immediate infrastructure challenge. Heatwaves, erratic monsoons, floods and extreme weather events are already reshaping the operating environment for power infrastructure across the country.The report estimates that 729 renewable energy sites, representing around 239 GW of capacity, fall in high or critical risk categories by 2030.For consumers, the implications extend beyond project developers and investors. Disruptions to renewable generation could affect future power reliability, increase insurance and financing costs, and potentially raise the overall cost of electricity as India seeks to meet surging demand from households, industries, electric vehicles and data centres.
How important do you consider resilience measures to be in renewable energy project planning?
The analysis identifies tornadoes, floods, wildfires and hailstorms as the most damaging hazards for renewable assets. Solar farms face risks from hail damage, wildfire smoke and extreme winds; wind farms from storms and flooding; while hydropower projects are vulnerable to changing rainfall patterns, floods, droughts and landslides.Rajasthan, India’s largest renewable energy hub, emerged as the most financially exposed state with renewable assets worth $16.4 billion at risk. Gujarat follows with exposure of $8.6 billion, while Arunachal Pradesh’s hydropower-heavy portfolio faces $13.1 billion in climate-linked exposure despite having far fewer projects.For Maharashtra, which has 95 planned renewable projects with a combined capacity of 13.6 GW, the report estimates climate-related exposure of $1.6 billion. While only 26% of the state’s renewable assets fall in the highest risk categories — among the lowest shares nationally — the report cautions against complacency.Cyclones and flooding along the Konkan coast remain significant threats, even as rising temperatures, industrial electrification, data-centre expansion and Mumbai’s growing urban heat island effect are driving electricity demand sharply higher.The report argues that the risks can be substantially reduced if resilience measures are incorporated during project planning and construction. It estimates that an investment of about $4.6 billion, equivalent to roughly 2% of the portfolio’s replacement value, could reduce potential losses from $55 billion to $27 billion, generating a six-fold return on resilience spending.Recommended measures include mandatory climate-risk screening before project approvals, climate stress-testing of high-risk projects, stronger engineering standards, improved drainage and flood protection systems, resilient substations and grid infrastructure, and incorporating climate resilience into procurement and financing decisions.The report says many of India’s renewable projects are still in planning or construction stages, providing a narrow but crucial window to strengthen infrastructure before vulnerabilities become locked in for decades.As India seeks to balance energy security, economic growth and decarbonisation, the study argues that climate resilience must become as important as generation capacity itself.Without it, the country’s clean energy expansion could face growing operational disruptions, financial losses and reliability challenges just as electricity demand enters a period of unprecedented growth.
