Indian Prime Minister Narendra Modis unabashed ambition to transform the countrys energy sector into a world-leader for renewables looks to have won over a series of the industrys typically more curmudgeonly opponents big oil and the fossil fuel industry.
Many of the countrys 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 firms 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.
Solars 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 BNEFs 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, Spains Iberdrola, Finlands Fortum OYJ and Chinas Longyuan Power Group have all transitioned to become leading renewable developers. Frances EDF and Total, along with Germanys E.ON, are also making moves into clean energy and storage technologies.
NTPC has made noises about its intention to become Indias 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 Modis 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.