Renewable energy gets new lease of life
The renewable energy sector has emerged as one of the major investment magnets. While record capacity addition and low tariffs in solar power have made headlines, there are several issues that have been overlooked. In a two-part series, Business Standardlooks at the bright spots of the Indian green energy sector and looming threats
One sector that has got a lot of attention with the coming of the NDA government is renewable energy (RE). Piyush Goyal, minister of state for coal, power and renewable energy, said a year ago that India would invite $2 billion worth of investment in green energy. Back-of-the-envelope calculations show that it has actually happened, especially in solar and wind energy.Around two gigawatt (Gw) of solar projects were commissioned during the past financial year translating into $0.2 billion worth of investment. Total wind power projects commissioned were 3.6 Gw, the highest in the past two financial years totalling an investment of $2.1 billion.
“The two Gw of solar projects that got commissioned in 2015-16 were already in the pipeline and has less to do with current policy and regulations. The hype has been built now. So, we can expect six Gw to be installed during the current calendar year and around 10 Gw in 2017,” said Jasmeet Khurana, associate director at solar consultancy Bridge To India.Moreover, international private equity investors poured $1.5 billion in RE companies in India in 2015.Among the major deals that culminated last year were ReNew Power Ventures. Goldman Sachs-backed ReNew raised around $200 million from Abu Dhabi Investment Authority. Around $65 million was put in by Goldman Sachs and Global Environment Fund.Aditya Birla-Abraaj joint venture was formed with $200 million to invest in solar power projects in India. Singapore government’s investment arm, GIC, signed an agreement with Greenko Group Plc for the $253-million acquisition of Greenko Mauritius, which runs the Indian assets as well.
India also announced International Solar Alliance – an alliance of 123 countries for harnessing solar power. Also, several states – Andhra Pradesh, Telangana, Rajasthan, Karnataka, Madhya