The future of coal in India may be bleak for now because of a court ruling ending all but 4 mine allocations, but the Government of India’s hopes for renewable energy – solar and wind – ride high.
Prime Minister Narendra Modi is no stranger to this form of energy generation, having hosted renewable energy investment conferences in his previous stint as chief minister of the state of Gujarat. Now, he has made his cabinet colleagues, especially his Power, Coal and Renewable Energy Minister Piyush Goyal see the light. Readers may note how that now one minister holds both portfolios, the traditional and non-traditional means of generating electricity.
Goyal is toeing Modi’s line, giving interviews in local and international media, talking of India turning into a renewable energy superpower soon.
Modi’s colleagues apart, even government-owned companies have decided to get into the act, including those that have been in the business of making electricity by traditional means.
Coal India Ltd (CIL), for example, recently announced plans to develop solar power plants across India, to generate about 1,000 megawatts of solar power, for an investment of about US $1.2 billion. The identification of sites for setting up the plants has begun in earnest. Renewable energy seems to be the flavor of the day because a few days later, another public sector unit (PSU), National Aluminum Company Limited (NALCO), announced plans to install a 100-MW wind energy project, according to this report in The Times of India. The company is one of the largest aluminum production companies in the world, and its new project would require an investment of about US $110 million.
So what’s a coal company doing in the business of harnessing energy from the sun or what’s an aluminum producer doing installing a wind power project? There may be no clear answers but here are macro indicators.
NALCO’s announcement came just after the Supreme Court of India (SC) ruled that 214 coal mines were illegal and their licenses cancelled. That included one owned by NALCO. What is not so widely known is that NALCO is among the largest captive power generators in India, with a capacity of 1,200 MW, and wanted to use the coal mine to power its aluminum smelter plants.
On the other hand, CIL, some analysts say, may be looking at renewable energy to balance out its overall carbon footprint.
Mostly, companies seem to have turned their attention to this source of electricity because of some gentle prodding by the new government. Plus, not only does it make good but also “clean” business sense.
How serious India is in pursuing the green energy plan can be gauged from the fact that it will host a meeting of international investors in February. The ‘Renewable Energy Global Investors Meet and Expo’ – ‘RE-INVEST’ will take place in the nation’s capital New Delhi, an initiative of course by Goyal’s ministry, to showcase India as an attractive destination for renewable energy.
Renewable energy contributes about 6% to India’s total energy production, but the summit hopes to change that by attracting large-scale investments in the sector. The aim is to hold such a conference every year for the next five years, or until 900 MW of clean energy capacity was developed.
The World Bank, for example, has already announced a US $775 million investment in Indian renewable energy sector.
The Prime Minister’s logic for cheering on the solar energy sector is simple – India enjoys almost 300 sunny days in a year and this energy needs to be harnessed to provide electricity to about 300 million Indians who, at present, do not enjoy reliable power supply. To do that, as per one estimate, India needs about US $100 billion in investments, and that’s where conferences like the New Delhi one sure will come handy.