Indian Renewable Energy Sector gets $4bn US investment, and more
And one of the major developments of Obama’s India visit is US federal agencies committing a total of $4bn for both projects and equipment sourcing in the renewable energy sector in India. “The US President emphasized that all their agencies would work together for more investment in RE and bilateral ties,” said an Indian government official. US Trade and Development Agency has decided to leverage a $2bn loan to renewable energy projects while the US Overseas Private Investment Corporationwill lend $1bn to clean energy projects in India. And, in another deal which came about during PM Narendra Modi’s visit to the US last year, the US Exim Bank will agree to $1bn lending. Several other major US companies already have a foothold in the Indian solar sector – including New York-listed SunEdison, which signed up two major agreements recently. The Adani Group and SunEdison have announced plans to invest $4 billion to set up India’s biggest solar equipment plant. India Inc’s Mahindra Groupwill also invest in the government’s ambitious plan for clean energy development with about 45bn rupees ($732m) in renewables over the next four years. The group’s plans include development of 500MW of solar by the end of next year.
“There will be more such investments in India. The government is determined to attract companies and make it easier for them to do business in the country. India already allows 100% FDI in renewable energy, and encourages technology transfer,” a government official said.
The Indian government had recently revised the targets for solar energy capacity addition to 100,000 Mw by 2019 and wind energy to 10,000 Mw annually. The government also aims to pump up domestic manufacturing in RE under its ‘Make in India‘ programme. While the wind energy turbines in India are mostly domestically sourced, there is tremendous scope for the programme in solar as 70 per cent of the country’s solar energy capacity is based on imported content, mostly from China and the US. India’s current solar power capacity stands at 2600Mw and the government aims to add around 4500Mw during the current financial year. However, our manufacturing capacity is only 1500Mw.
Renewable energy accounts for 33,791 Mw out of India’s total generating capacity of 255,000 Mw at the end of December 2014. In addition, another 1,123 mw of renewable capacity operates independent of the grid.
India has a huge energy demand-supply gap which leads to dependence on expensive diesel-based back up generator systems and also an increasing reliance on the import of fuels – oil, gas and also coal. If India is able to achieve its ambitious target of 100 GW of solar energy and also triple its nuclear capacity by 2022, it would be well on it’s way to a low-carbon energy future. Not only that, it would address India’s energy security concerns, lower pollution levels and contribute to the country’s sustainable development goals.
