It has been estimated that nearly 40 per cent of India’s power capacity – in total – would be produced through renewable sources by the year 2030. The power and environment ministry has been working on aggressive plans for targeting renewable energy capacity under the close monitoring of Prime Minister’s Office. The proposal is expected to be cleared by cabinet in the near future, paving way for higher investments in the sector. Also, with the Cabinet’s approval, India might be looking at building 350 Gw of wind and solar power by the year 2030. Of the total, the Government is expecting 250 Gw of renewable portfolio to be generated out of solar power and nearly 100 Gw through wind power.

It is estimated that India would be looking at building power capacity of nearly 850 Gw ^[i] by the year 2030. This target is expected to help the country in offering 35 per cent reduction in greenhouse gas emission.

Recent investments

• NTPC Ltd is planning to raise INR 700 crore by the way of selling tax-free bonds. This would allow them to access low-cost as well as long-term funds for its plans for renewable energy.

• It has been said that other companies including Power Finance Corp. Ltd would raise INR 1,000 crore, Indian Renewable Energy Development Agency Ltd would raise INR 2,000 crore and Rural Electrification Corp. Ltd would raise INR 1,000 crore. They are all looking at adopting the same strategy going forward.

• Brookfield Asset Management Inc. – which is based out of Canada – is planning to buy out assets in the power, financial services and renewable energy sectors in the country and would add close to USD 2 billion to the asset base it has been able to build in the previous five years.

• One of the large foreign investors in the power sector in India, CLP India, was able to announce issuance of corporate Green Bonds. This was done for the wind portfolio which is coined as CLP Wind Farms. The company – CLP Wind Farms – is planning to raise will raise INR 600 crore or USD 91.9 million by the way of issuing of secured, rated, unlisted, redeemable non-convertible debentures.

• Squared Capital – a global infrastructure investment manager – has been able to look at Indian green energy sector in a big way. It is planning to invest USD 150 million in the company Amplus Energy Solutions Pvt. Ltd.

• Richard Verma – US Ambassador to India – has announced grants of nearly USD 2 million for innovative projects which is focused on clean energy project. The grants that are planned would be the first round to PACE setter Fund, which is USD 7.9 million fund that has been established in the month of June by the Indian Government and the United States for pushing off-grid clean energy solutions and commercializing it.

• Chairman of the Adani Group – Mr Gautam Adani – has been in talks with Japan’s SoftBank as well as with Foxconn for investing in making solar cells and panels in the country. This project would be worth USD 3 billion. The focus is to set up a plant for producing 3 gigawatts of solar cells as well as panels by the year 2020.

• Cochin International Airport Ltd in Kerala state has now become first airport globally that would run fully on solar power. This airport was officially commissioned nearly 12 MW solar project. The chief minister of the state was able to commission land for the project to be constructed on 45 acres. This project was executed by Bosch Ltd at INR 62 crore in about six months.

• SunEdison – US solar power company – would be listing its Indian assets on Nasdaq. They plan to raise USD 500 million through TerraForm Global, which is a subsidiary for renewable assets in the non-OECD countries. This company has become the largest provider of open access solar power to various industries as well as commercial units in the country.

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Government initiatives

The Indian Government plans to provide 24×7 power in the entire country by the year 2019. They would like to create infrastructure that is cost effective, sustainable as well as solutions that is clean energy.

The Government is also looking at providing sustainable and energy efficient infrastructure in 100 smart cities that would include provision for adequate power generation, and using renewable as well as energy efficiency technologies.

Wind energy: The Union Cabinet – headed by Prime Minister Narendra Modi – has approved the National Offshore Wind Energy Policy^[ii]. This approval now gives a path for offshore wind energy development which also includes setting up of offshore wind power projects, along with activities such as research and development.

Hydrocarbons: Piyush Goyal – Minister of State for Power – invited US firms for participating in the unconventional hydrocarbons sector in India, especially focusing on exploring as well as exploiting alternate energy sources including shale gas, shale oil as well as gas hydrates.

Solar energy: The Government of India has been able to revise projects based on National Solar Mission target of Grid Connected Solar Power from 20,000 MW to 1,00,000 MW by the year 2022. Further, the Ministry of New and Renewable Energy has sanctioned master plan for developing 50 solar cities of the proposed 60 cities which is inclusive of cities in National Capital Region.

The Government is also planning to use marketing platforms such as Flipkart, Snapdeal and Amazon for promoting solar energy in India.

Meanwhile, Rajasthan Government has cleared INR 1,56,000 crore or USD 24.42 billion investments in sector – solar energy- in the state. These investments would be utilised for setting up solar parks which would have a total capacity of generating solar energy worth 26,000 MW.

In conclusion

Alternative energy sources are being harnessed in India at a faster pace to meet the growing power demand in the country. In fact, by the year 2022, India would need to invest around USD 200 billion for meeting its target as well as setting up around 60,000 MW of wind power capacity. With regards to solar power, the country in the next seven years would be able to provide 110 terawatt-hours or nearly 22 per cent incremental power demand, as per Institute for Energy Economics and Financial Analysis.

India was able to raise the solar energy target by 2022 to around 100 GW from 20 GW as a part of Narendra Modi Government’s efforts for lowering dependence on electricity produced by coal.

For setting up power projects, companies from global arena including SunEdison Inc, SoftBank Corp, Foxconn Technology as well as Trina Solar Ltd have announced multi-billion dollar investments.

Adani Power Ltd, NTPC Ltd and Reliance Power Ltd are already making inroads into solar energy projects.

Are you planning to invest in the growing renewable energy sector in the country and require guidance on market entry? Connect with our consultants at enquiries@tecnovaglobal.com

^[i]http://www.business-standard.com/article/economy-policy/india-s-energy-mix-to-have-40-renewable-sources-by-2030-115092200057_1.html

^[ii]http://pib.nic.in/newsite/erelease.aspx?relid=126903

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