The dominance of fossil fuels in power generation in India will end by the end of the decade. The Reserve Bank of India has made this claim in its latest report. The report said that the share of renewable energy in power generation globally is expected to cross 50 percent. According to the report, the energy transition has accelerated in recent years. Apart from this, the pace of deployment of clean technology and capital investment has reached record levels.

The RBI said, "The era of dominance of fossil fuels is coming to an end, and the share of renewable energy in power generation globally is expected to cross 50 percent by the end of this decade." According to the report, an increase in clean energy generation will help sectors such as steelmaking and aviation, where low-carbon options are still in their early stages. The central bank also highlighted the importance of increasing investment in low-carbon energy.

The RBI said, "Clean power generation can boost the aggressive carbon emission reductions that are urgently needed. This will provide more time to tackle sectors such as steelmaking and aviation, where carbon emission reductions are currently a challenge."

The report states that for every dollar invested in fossil fuels, an average of three dollars needs to be allocated to renewable energy in the coming years, which is much higher than the current ratio, where both sectors are getting equal investment. Tripling renewable energy capacity by 2030 is considered essential to meet net-zero emission targets by mid-century.

"On the energy supply side, for every US dollar spent on fossil fuels, an average of US $3 should be invested in low-carbon energy over the rest of the decade," the RBI said. In the report, RBI has highlighted that the estimated cost of a completely carbon-free global energy system by 2050 will be US$215 trillion.

However, the report remains optimistic about the ongoing efforts to green the financial sector. It emphasised that striking the right balance between public policy interventions and market-based competition will prove to be the key towards achieving this ambitious energy transition. The central bank also said that financial inclusion has improved significantly as the world moves towards a more sustainable energy future.