Renewable Energy
CII Media Releases
Green Corridors need to be built across the country to achieve the target of 175 GW RE Power by 2022: CII
Apr 21, 2017

The Power sector in India is going through a transformation phase.    The Government of India over the last two and half years has taken several policy measures to ensure rapid capacity addition from mere 32 GW in 2014 to 175 GW by 2022 from new and renewable energy resources.   While the growth in power generation capacity from new and renewable energy is commendable, there is a need for well-defined renewable energy policies in the states to create a conducive environment to realize the full potential of the sector.   This was said by Mr Ratul Puri, Chairman, CII NR Committee on Power & Chairman, Hindustan Power Projects Pvt Ltd during the 4th Edition of the CII Renewable Energy Summit organised by Confederation of Indian Industry (CII) here today.  Mr Puri further stated that the Northern Region of India alone has renewable energy potential to the tune of 365 GW whereas around 10,247 MW of power has been harnessed so far.   
To provide a further boost to renewable energy sector, some of the challenges that need to be addressed on priority basis include precarious financial health of DISCOMs; inadequate and outdated grid infrastructure and operations, fragmented solar component manufacturing with many small players and high AT&C Losses, Mr. Puri added.    Exemption from wheeling charges, electricity duty and incentives may help in attracting fresh investments in new & renewable sector, Mr Puri said. 

Addressing the Conference Mr. Sumant Sinha, Chairman, CII Northern Region said that initially when the target to scale up RE production to 175 GWs by 2022 was set by the Government of India, experts were sceptic about the achievement of such mammoth goals. However, progressive policies of the Government of India coupled with state initiatives helped generate huge interest among industry to invest in renewable energy sector in the country.    As several foreign companies as well as big domestic conglomerates are entering the foray, renewable energy sector is expected to witness a lot of churning and consolidation in coming years, he added.  

Falling cost of the renewable energy, especially on the solar front, is giving a tough competition to other sources of energy.    However availability of the grid infrastructure in the country remains a challenge.  There is also a need to build a competitive domestic solar manufacturing capacity within the country.  At the moment a large part of the requirements are being imported, mostly from China, opined Mr Sinha. 

Sharing the investors’ perspective, Mr Suresh Goyal, India Country Head & Executive Director, Macquarie Infrastructure & Real Assets stated that the whole spectrum of Renewable Energy is taking the country and the overseas investors by storm.  Exemplifying this, he quoted that India has attracted 50 per cent of the global investments in the RE sector in the recent times, thus showcasing that India is the most attractive market for the RE investors.    Mr Goyal said that an investor primarily looks at counter party risk; equipment performance; grid performance and stability; payment track record of the developers; yielding capacity of the assets as the key points for investing in any RE project in the country. In this regards, he felt that barring equipment performance criteria, the government should ensure that the rest of the criteria is taken care of to make an impact on doing business. 

Highlighting some elements for encouraging the private developers in the states, Mr Inderpreet Wadhwa, Founder, Director and CEO, Azure Power called on the States to come up with a policy mechanism which clearly defines the right mix of power requirements and power consumption in the state, so that new projects can only be auctioned after the demand for power is determined.   DISCOMS are an important segment in the RE sector and they need to have a stronger financial position to attract the private developers to come forward and invest.   

On the financing models and solutions in the Renewable Energy space, Mr KS Popli, Chairman & Managing Director, India Renewable Energy Development Agency (IREDA) shared that earlier 30:70 models was quite prevalent, however, today as we are quite certain on the cash flows in the projects, there are new instruments like sub debts up to 10 per cent, hard and soft underwriting etc. are available. There is no doubt that the Power Purchasing Agreements will be honoured in the future, irrespective of falling tariff rates, he added.The cost of financing RE projects would decrease significantly with deepening of the bond market. Further, the green bond market has grown up significantly in the last 5 years, he added. 

Earlier during the day, CII also released a Report on ‘State Renewable Energy Policies: A Comparative Study’ during the Summit. The report aims to disseminate information on the policy initiatives undertaken by various State Governments in the Renewable Energy Sector. This report aims to serve as a ready reckoner for investors in the Renewable Energy sector and help them take informed decision.

New Delhi
21 April 2017

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