New Delhi: Billionaires from India and some from abroad are lining up investments to realize Prime Minister Narendra Modi’s green energy target of 175 gigawatts by 2022. They face greater hurdles than the $200 billion needed.
On Monday, Indian telecommunications billionaire Sunil Mittal announced a joint venture with Softbank Corp.’s Masayoshi Son to spend $20 billion to set up 20 gigawatts of solar power in a decade. That follows plans by billionaires Gautam Adani and Anil Ambani.
The success may rest on more mundane details. Impediments such as an absence of local manufacturing, a difficult business environment and inadequate infrastructure stand in the way, said industry executives.
Zhiguo Zhu, senior vice president at Trina Solar Ltd, which plans to set up a 2-gigawatt factory in India this year, complained about “slow” processes in a phone interview last week that are delaying its plans.
“In Myanmar, China or Thailand, we put up a factory in eight months,” Zhiguo said on 16 June. “In India, I can give you the start date, but not the finish date.”
Son too was cautious about a completion date.
“We’d like to do this over 10 years. How much we can accelerate will depend on cooperation and collaboration with the central government” and utilities, Son said while announcing his joint venture plans. “If we have land available to us then manufacturing locally makes sense. If we have up and down in availability of land then it becomes more difficult to make locally.”
Upendra Tripathy, secretary at the ministry of new and renewable energy, said he’s aware of the criticisms and is meeting investors and project developers in various states every month to ensure faster clearances.
“We will double mandatory clean energy purchase quotas for states this year,” Tripathy said, referring to the purchase of expensive clean energy.
Still, compliance remains low as money losing state power distributors prefer buying cheaper thermal energy.
“The question is whether loss-making distribution companies will buy it,” said Anish De, partner, infrastructure and government services, at KPMG India. “Only aligning them with the government’s requirement can sort out the problem.”
Further out, the absence of a forecasting and scheduling mechanism for fluctuating clean energy will make Indian power utilities reluctant to absorb the power as is happening in Japan and China now.
Bridge to India, a solar energy researcher, foresees a problem of “curtailment” in India, where grid operators don’t allow expensive and oscillating clean energy to access their networks.
“Developers should account for such exigencies while bidding,” Jasmeet Khurana, a senior manager at Bridge to India said.
The government has expedited strengthening grid infrastructure across nine Indian states with €1.3 billion ($1.5 billion) from German Bank KfW, Tripathy said.
India’s current installed green power capacity is about 37 gigawatts. Bloomberg
Source: Mint;23 June 2015