| | India's fossil fuel giants begin to back Modi solar goal
22. July 2016 | Markets & Trends, Investor news, Global PV markets, Industry & Suppliers | By: Ian Clover
Leading big oil, coal, and gas giants of India are beginning to see the benefits of solar power.
IBC Solar
Many of the biggest names in Indian coal, oil and gas have embarked on renewable energy projects or initiatives in recent months as the attraction of solar becomes ever more apparent.
Indian Prime Minister Narendra Modi’s unabashed ambition to transform the country’s energy sector into a world-leader for renewables looks to have won over a series of the industry’s typically more curmudgeonly opponents – big oil and the fossil fuel industry.
Many of the country’s biggest names in fossil fuels have each initiated bold clean energy programs and projects in recent months, as the financial, corporate and ecological benefits of solar PV in particular become more widely known, accepted and embraced.
Indian Oil Corp. is to collaborate with Oil India Ltd to build a 1 GW solar plant in the state of Madhya Pradesh, state regulators have revealed, joining big power producers such as Tata Power Co. and NTPC Ltd in the pursuit of PV progress.
Oil & Natural Gas Corp, the biggest oil exploration firm in the country, is also seeking out solar opportunities, according to Bloomberg. “We already have some wind capacities, and now we want to position ourselves big in solar,” said the firm’s chairman, Dinesh Kumar Sarraf. “Investments in renewable energy are not for mere demonstration, but also because of business reasons. We are working towards giving renewables a reasonable share in our overall business mix.”
Solar’s plunging costs are making large-scale PV developments a more attractive proposition for big energy, particularly in light of the troubles state power retailers are having in terms of paying their own bills. Bloomberg states that these retailers are in the red for around $37 billion.
Hence, believes BNEF’s head of Asia and Pacific Justin Wu, more renewables than coal power will be built in Asia over the next 25 years. “And most of it will be built by these big conventional power companies."
The trend apparent in India mimics that seen already in Europe and China, where big utilities such as Enel SpA of Italy, Spain’s Iberdrola, Finland’s Fortum OYJ and China’s Longyuan Power Group have all transitioned to become leading renewable developers. France’s EDF and Total, along with Germany’s E.ON, are also making moves into clean energy and storage technologies.
NTPC has made noises about its intention to become India’s largest green power producer, while Tata Power recently purchased 1.1 GW of clean energy projects from Welspun Renewables for an amount of $1.45 billion.
This change in attitude has been partly fueled by Modi’s pro-solar policies, which target the installation of 100 GW of solar PV capacity by 2022, and a total of 175 GW of clean energy by that date. Recent auctions for solar have triggered some concerns that the ‘strike price’ is too low to be viable, and if no improvement in the financials of such projects is forthcoming then experts warn that some large-scale plants could become non-performing assets.
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