Exclusive interview with Dr. Anoop Singh, Associate Professor, Department of Industrial and Management Engineering, Indian Institute of Technology Kanpur, India. On the opening day of Clean Power Asia, Dr Singh is part of a panel discussion in the track on Clean Power Policy, Strategy and Finance.
How committed is India with regards to cleaner fossil power and renewable energy?
India has recognised the need for promoting renewable energy since the 1970s. The growing importation of fossil fuels, energy shortages and environmental concerns have added to this urgency over the past decade. Adoption of cleaner super critical technology for thermal generation, and policy and regulatory initiatives for promoting renewable energy and energy efficiency have provided impetus to their development in India.
Any projects or success stories that you are particularly excited about?
In the context of fossil fuels, the ultra mega power projects (4,000 MW each) are mandated to use efficient supercritical technology. The Jawaharlal Nehru National Solar Mission (JNNSM) has spearheaded a growth era for harnessing solar energy in the country. It aims to develop 20,000 MW of grid-connected solar power by 2022. NTPC Vidyut Vyapar Nigam (NVVN) Ltd. is the nodal agency to invite bids for solar power and bundle sell the same with conventional power for sale by NTPC to utilities. In December 2010, NVVN received solar PV bids under the Jawaharlal Nehru National Solar Mission averaging Rs. 12.16 per kWh (min. Rs. 11.18 per kWh) against a reference price of Rs. 17.91 per kWh. Solar thermal bids averaged Rs. 11.48 per kWh (min. Rs. 11.14 per kWh) against a reference price of Rs. 15.31 per kWh. The process awarded projects for setting up 615 MW solar PV and solar thermal power generation capacity. Apart from this, there has been an encouraging response to the reverse bidding process for solar projects in the state of Gujarat. This is being followed up by Rajasthan and other states as well.
How is the Indian government supporting such projects?
The Electricity Act 2003 mandates specification of a renewable portfolio obligation and feed-in-tariff by the respective electricity regulatory commissions. Further, the Ministry of New and Renewable Energy (MNRE) provides generation based incentives to power generated through renewable energy sources. Fiscal incentives in the form of higher rates of depreciation and income tax exemption, and financing support encourage investment in renewable energy. The growing solar footprint in India is supported through a policy push through the JNNSM and state policies.
Are there investment opportunities in this sector in India?
India offers significant potential for renewable and clean energy development. Historical estimates have put renewable energy potential at over 150 GW. Recent estimates for solar and wind energy potential peg these resources at many times the earlier estimates. Market based instruments like the Renewable Energy Certificate and Energy Efficiency Certificates (under PAT scheme) offer new revenue models for investors.
Why do you think Asia has made such strides in green energy development?
Most of Asian countries continue to exhibit low energy access as far as commercial energy use is concerned. These countries have found opportunities to harness local renewable resources and adopt cleaner technologies, thus improving energy security while also serving the environment. Access to technology and encouragement for private investment through policy and regulatory initiatives have produced encouraging results in the region.
You are part of a panel discussion on finance for such projects at Clean Power Asia – what will be your message?
Investments follow a fare rate of return to compensate for the associated risk. While technological and operational risks for clean and renewable energy have reduced to some extent, sustainability of the policy and regulatory environment holds key to investments which reap returns over medium to long-term. Quantifiable and manageable risk, which has clear visibility to support debt servicing, would enhance flow of funds to the sector. There are still some challenges to project financing under the certificate based schemes.
Anything you would like to add?
Asian countries share a number of common issues as far as energy access and clean energy development is concerned. Further, countries also share similar issues including access to technology and finance, administrative hurdles and operational challenges. There is significant scope for intra-regional learning among the concerned governments, regulators, institutions, industry as well as academia. Multilateral institutions can play a key role in furthering this cause.
Dr. Anoop Singh
Department of Industrial and Management Engineering,
Indian Institute of Technology Kanpur
Kanpur – 208 016 (India)
(O):+91-512-259 7679; Fax: +91-512-259 7553;