The need for energy efficiency is presently a global hot topic, and so the inaugural National Energy Investment Summit being held next month, is both a timely and significant platform for the region.
The event is taking place on July 21st – 22nd 2011 at The Grand in New Delhi, and is seen as pivotal in the country’s quest to achieve its 2022 agenda.
It is supported by a number of Government and industry associations, including the Ministry of New and Renewable Energy, The Energy Resource Institute, World Institute of Sustainable Energy, Indian Wind Energy Association, Solar Energy Society of India, Indian Private Equity & Venture Capital Association, All India Association of Industries and Centre for Wind Energy Technology (C WET), Renewable Energy & Energy Efficiency Partnership and Independent Power Producers Association of India.
Up to 150 investors, Government officials and renewable energy solution providers are attending. Investors are expected to travel from the Middle East, Europe, China and Australia – as well as India.
This initiative provides an ideal arena for all parties to discuss projects geared towards transforming the country’s energy industry. Key issues such as emission reduction, carbon emission trading and Clean Development Mechanism are also being debated.
The two days are organised and hosted by business information group naseba. “We are proud to host this summit and grateful for the support of the Ministry of New and Renewable Energy in India. This is the first capital raising platform for renewable energy projects of its kind in the region, and up to US$ 7.5 billion in expected to be invested.” commented naseba General Manager (INDIA) , Mohammed Saleem
India is on track to produce 700 megawatts of solar power at a cost of $2.2 billion by December, ahead of an initial target for an ambitious plan that seeks to boost green power generation from near zero to 20 gigawatts (GW) by 2022.
Under India’s Solar Mission , investors bid to build solar power plants and the winning bids are determined by the electricity tariff that they accept as viable. Such has been the interest that the government has been flooded with investment pledges for the first batch of projects rolling out in December.
India’s 20 GW solar plan is likely to attract overall investment of about $70 billion, the government has estimates. Issued in 2009, the plan envisages India producing 1,300 megawatts (MW) by 2013, another up to 10 GW by 2017 and the rest by 2022.
“The entire solar industry is no longer worried about the upheavals that are taking place in the European markets because they find a very new and very promising market is developing in India,” said Debashish Majumdar, chairman and managing director of Indian Renewable Energy Development Agency.
IREDA, a state-run agency, is the leader in the country’s solar energy financing.
“So far, every year the general mood was that nobody knew what would happen to the German policy or what would happen to Spanish policy,” said Majumdar, who attended a global summit on clean technologies in Munich last week.
Germany , the world’s top solar power producer with about 17 GW installed by end-2010, is considering cutting incentives for photovoltaic energy by an additional six percentage points in another step on March 1, 2012.
Germany, Spain , Italy, Japan and the United States are the leading producers of solar power in the world. While India’s solar sector remains a risky venture because of a shortage of data and trained manpower, such deficiencies also open up a huge market for expertise and technology such as Colorado-based Juwi Solar, Schneider , Schott Solar.
“The (Solar Mission’s) second phase would create a very large market for service providers, especially EPC contractors and people who can analyse data to ascertain how much resources like sunlight are available and how much (solar energy) is going to be produced,” Majumdar said.
“These agencies would get lots of business,” he told the Reuters Global Energy and Climate Summit in New Delhi, adding it was still not possible to determine the size of such a market.
EPC contractors handle the engineering, procurement and construction of solar power plants.
If everything goes to plan, and the rollout of the first projects in December should be an indicator, solar would contribute the equivalent to one-eighth of India’s current installed power base by 2022.
PROINSO will conduct the supply throughout this year and, according to company sources, is currently negotiating the provision for other solar energy projects in India in excess of 20 MW power for 2011, for both Indian and European developers with projects in India.
MECASOLAR and PROINSO- companies that form part of Grupo OPDE- plan to open an office in India before the end of the year, and will be travelling there in April on a trade mission with the Spanish Association for the Internationalisation and Innovation of Solar Companies (SECARTYS-SOLARTYS).
This mission will enable both companies, – who participated in the Renewable Energy Technology Congress held in New Delhi -to see first hand the commitment that the Indian Government is making to solar energy, its current plans for the development of solar energy the forthcoming years –National Solar Mission-, and the various plans that some regions are carrying out. During this mission contact was also made with a large number of promoters, EPC companies and customers.
At the end of this year both PROINSO and MECASOLAR will attend INTERSOLAR INDIA to be held from 14 to 16 December. Prior to this, they will be present at INTERSOLAR EUROPE to be held from 8 to 10 June in Munich, where they hope to make contacts with customers in India, taking advantage of the huge attendance at the event.
PROINSO have highlighted the enormous growth potential for the solar energy market in India in the coming years, as forecasts suggest that by 2020, the country will have installed 10,000 MW.
World leader in distribution
PROINSO, which has offices in Spain, Germany, Greece, Italy, United States, Britain, Canada, China and Czech Republic– expects to exceed the figure of 1,000 MW supplied throughout 2011. The company can provide these forecasts as they have closed orders which predict that this figure will be added together to the 812 MW which has already been supplied since 2005.
PROINSO has a strong international focus, as is indicated by its more than 1,555 qualified installers who are part of its Network, in addition to more than 90,000 m2 of logistics warehouses spread out among its delegations.
The state government of Gujarat will buy power from the plant under a 25-year power purchase agreement, the New Delhi– based company said in an e-mailed statement. The International Finance Corp., the private-sector financing arm of the World Bank, is an investor in the project.
Other investors include the U.S. Overseas Private Investment Corp. and two venture-capital firms — Helion Advisors, based in Gurgaon near New Delhi, and Menlo Park, California-based Foundation Capital, Azure said.
As the country suffers through another blistering summer, it only makes sense that this abundant resource is put to some use.
Venture capitalists have raised $24.5 billion since 2009 to invest in clean technology or renewable energy in India, and would like to invest more than a fifth of that capital in solar-energy projects, according to researchers VCCEdge and Preqin.
Their investment is based on the thesis that India will need more energy than it now generates if it is serious about maintaining its economic growth rate of 9%.
The nation’s existing fossil-fuel-based power plants cannot keep up with current demand as evidenced by the frequency of power cuts across the country. And, proven coal reserves are expected to last only up to 50 years more. Against this backdrop, the 300 sunny days that the country gets in a year looks like a huge resource boon. Estimates say this free source can be used to generate five trillion megawatts of energy, a huge surplus considering India’s annual consumption is about 848 million megawatts.
While this opportunity to be part of a new and rising industry has attracted droves of investors—domestic and foreign—attractive targets are in short supply. Funds such as Blackstone, TPG Growth and Reliance Venture Asset Management Pvt. Ltd. have all paid high premiums on portfolios that involve long developmental pipelines and few operating assets.
The solar sector has seen only eight transactions amounting to $100 million in the last three years—a fraction of the money that has been raised to invest in this sector.
Shivani Bhasin Sachdeva, chief executive of private equity fund India Alternatives, says solar-power-based power generation needs greater economic support than say, wind-based and small-hydropower projects, as the latter sources are on the verge of reaching grid parity—the point at which an alternative means of generating electricity is economically on a par with a conventional technology such as coal-based-generation.
The Indian government is doing its bit. In 2009, the Central Electricity Regulatory Commission—which promotes efficiency and competition in bulk electricity generation and transmission— launched the ambitious Solar India Initiative to be deployed over 19 years. Its three-phase plan works toward generating 20 gigawatts of solar energy within 12 years.
“When the solar policy was announced 15 months ago, there was a kind of gold rush into the sector,” said Alan Rosling, founder and chairman of Kiran Energy Solar Power Pvt. Ltd.
His company received $30 million this year from New Silk Route Advisors Pvt. Ltd, Bessemer Venture Partners India and Argonaut Ventures LLC and is engaged in developing solar projects.
Initially, new entrants thought it would be easy to reap quick returns but the first round of bidding, led by the government, for the purchase and sale of power under the National Solar Mission (dubbed the Vidyut Vyapar Nigam scheme) “was a very good way of shaking out players who were not serious,” Mr. Rosling said.
Indeed 418 applicants competed for 30 government contracts for the purchase of solar power from private industry, said Sanjay Chakrabarti, leader of the national clean technology practice at Ernst and Young. This indicated a high level of interest in a relatively underdeveloped sector that had few experienced players, he said.
Government-backed incentives, mandatory use of locally manufactured equipment and solar purchase obligations for utility companies have helped the Indian solar sector emerge as a safe bet as investors are assured of long-term annuity returns, said Yogesh Mathur, chief financial officer at Moser Baer Group.
The maker of compact discs and electronic devices decided to take the plunge into solar power and is, today, the country’s second largest maker of solar cells and the fifth largest maker of solar modules—panels that convert sunlight into electricity.
Despite government support, execution of these plans is plagued by delays. For investors, the buzz fades somewhat when they realize that initial returns are less than expected due to gestation periods of up to 25 years, and a complexity of implementation that’s greater than expected. But there are benefits too.
“Projects in clean tech (including solar energy) are often subsidized via government grants, which reduces the capital expenditure burden for private investors,” she said. “Further, investors can choose… across a spectrum of clean technologies, which diversifies their risk.”
That’s why there’s more money likely to come in with another 29 India-focused funds looking to raise $6.79 billion for investing in companies that produce energy using renewable sources or engaged in activities that have a minimal or beneficial impact on the environment.
Where they will put all this money isn’t clear but in a few years, India is on track to “emerge as one of the biggest solar energy markets globally,” said Moser Baer’s Mathur.
New Delhi: Amid a growing debate over environment and development, Prime Minister Manmohan Singh on Sunday said his government will “stay sensitive” towards green concerns but maintained that the pace of development should not suffer in the process.
Observing that the environmental issues have “acquired a new urgency” in recent years, the Prime Minister emphasized the need to work with renewed energy to address green concerns.
“While we stay sensitive to environmental concerns, we will also strive to ensure that the pace of our development does not suffer in the process,” Singh said in the UPA government’s annual report presented to the people on Sunday.
“We need to work with renewed energy to address environmental concerns if we wish to make our growth processes sustainable and give our people a better quality of life,” he further said.
The Prime Minister also referred to various green steps taken by his government during the year 2010-11 which included the establishment of National Green Tribunal, sanctioning of Rs 2,500 crore under Mission Clean Ganga and launching of Jawaharlal Nehru National Solar Mission.
“We will accelerate our efforts in sustaining our environment in the coming years. More specifically we will work sincerely to implement the National Action Plan on
Climate Change, including the eight national missions which are a part of the Plan,” Singh added.
According to the report, the Prime Minister’s Council on Climate Change has considered all eight climate change related national missions.
The eight missions are the Jawaharlal Nehru National Solar Mission, National Water Mission, National Missions on Enhanced Energy Efficiency, Sustainable Habitat, and Strategic Knowledge for Climate Change, and the National Missions for Sustaining the Himalayan Ecosystem, a Green India and Sustainable Agriculture.
NEW DELHI, INDIA: Delhiites would now be able to sell power directly with the Delhi government about to launch a roof top solar energy policy. Chief Minister Sheila Dikshit Thursday said the policy will be launched in the capital soon to encourage people to switch to the renewable energy source.
“We are soon starting rooftop solar policy for setting up solar power units on rooftops of households in the capital, where the owners of buildings will get incentives and it will be connected to the main grid,” Dikshit said here at a seminar.
According to the policy, house owners can either lease out their roof to a developer, who will then set up the unit, or they can pay 30 percent of the cost of installation. The remaining 70 percent will be financed through banks.
House owners will get to earn Rs.17 per unit of power produced through the solar panels, which will be directly fed into a grid. They can sell the power for 25 years.
The government is working out modalities of the scheme’s benefits. The discoms may even deduct the amount the house owner earns through the solar unit from the electricity bill.
Greg O’Connor, Commercial Counselor at the US Embassy in New Delhi said Washington is keen to promote bilateral cooperation in the alternate and renewable energy sector, and added that American firms are ready to set up units in partnership with industries in Punjab and in other parts of India.
He and other US officials visiting Amritsar over the last three days said such cooperation could bring in a change in energy-starved India.
Representatives of American firms were in Punjab this week to learn about the commercial aspects and the opportunities available to them.
Suneet Kochar, district president of the Confederation of Indian Industry , said that the visit by the American delegation should be seen as an an opportunity for Punjab.
He said that till a few years ago, the business environment in Punjab was dismal, and such business opportunities as being provided by the United States, would certainly boost industrial and business confidence in the state.