The
power firm looks to make solar equipment as part of its strategy to be present
across the renewables value chain
India
needs as much as $200 billion to meet its target to install 100GW of solar
power and 60,000MW of wind power by 2022. Photo: AP
NTPC Ltd is exploring options to manufacture
solar equipment as part of the state-owned power producer’s strategy to be present
across the green energy value chain.
To start with, India’s largest power generator
is evaluating a plan to set up a 1,000-megawatt (MW) per annum manufacturing
capacity, which may require an investment of Rs.5,000 crore.
The plan stems from the fact that NTPC has to
set up 10,000 MW of solar power capacity on its own, along with buying 15,000MW
from solar project developers, on behalf of the ministry of new and renewable
energy.
“We are evaluating the opportunity. We want to
be present across the value chain—from polysilicon to solar panels. We have the
money, and the present costs can be reduced. Silicon and quartz are available
in abundance in the eastern part of India. A presentation on the subject has
been made,” said an NTPC executive, requesting anonymity. The plan is at a
preliminary stage.
There has been considerable interest in the
solar-equipment manufacturing space in India, with US-basedSunEdison Inc. announcing
its plans to establish a joint venture (JV) with Adani
Enterprises Ltd to build a solar, photovoltaic manufacturing
facility in India at an investment of about $4 billion.
US-based First Solar Inc. and
China’s Trina Solar are
among companies that are considering plans to set up manufacturing facilities
in India.
With an installed capacity of 45,048MW, NTPC has
around a 17% share of India’s power-generation capacity of 272,593MW, and has
set itself a target of becoming a 128,000MW power producer by 2032. It plans to
raise the contribution of renewable energy to 28% of its planned capacity by
then.
“It is the right time to go for manufacturing.
We have a large solar power generation commitment on ourselves. Also, in due
course, NTPC has the target to reduce its dependence on fossil fuel sources,”
said the executive cited earlier. “With a focus on renewable, solar is a viable
solution.”
The government has pushed renewable energy to
the top of its energy security agenda and is looking to provide green power at
less than Rs.4.50 a unit.
While the current installation cost of a solar
project is around Rs.6 crore per MW,
economies of scale are expected to drive down the cost to Rs.4.5 crore per MW.
India needs as much as $200 billion (Rs.12.75 trillion) to meet its target to install 100GW
of solar power and 60,000MW of wind power by 2022.
Analysts expect solar power tariffs to fall.
“Solar power is likely to become cheaper than,
or equivalent to, conventional thermal energy prices over the next two to three
years and reach Rs.4-4.5/kWh by FY18,”
India Ratings and Research, the domestic arm of Fitch Ratings, said in a 22
July report. “This will be driven by a decline in capital costs (solar modules
and other balance of plant), an increase in efficiency, a shift towards large
solar photovoltaic projects, leading to the economies of scale and lower return
expectations by developers,” the report added.
Queries emailed to spokespersons of NTPC,
ministry of new and renewable energy, SunEdison and Adani remained unanswered
till press time.
The emphasis on solar and wind power is also
expected to strengthen India’s standing at global climate change negotiations
that culminate in a summit in Paris in December.
The government’s focus on renewable energy is
aimed to minimize India’s dependence on coal-fuelled electricity.
While there has been a growing interest from
overseas and domestic investors in the Indian renewable-energy space, concerns
are being raised over its viability in the backdrop of state electricity boards
(SEBs) increasingly showing a reluctance to buy power on account of their poor
financial health. With a debt of Rs.3.04 trillion and losses of Rs.2.52 trillion, SEBs are on the brink of
financial collapse.
Russia’s OAO Rosneft,
the world’s largest publicly traded oil company, is exploring a huge investment
in solar energy in India, Mint reported on 14 July.
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