Fossil fuel-based power generators like NTPC, Reliance Power and Lanco Power, and energy majors such as Indian Oil Corporation, Bharat Petroleum, Hindustan Petroleum and GAIL, are warming up to renewable power in a big way as India moves to control its fast-expanding carbon footprint as part of the global effort to fight climate change.
This trend is expected to strengthen in coming years as the cost of generation of conventional power goes up due to the increase in fuel costs. Besides, the government is incentivising renewable power, according to industry experts. ?The India government is incentivising renewable power generation through subsidy and tax sops. Further, it is obligatory for power distribution companies to buy a certain portion of their power requirements from renewable sources, which provides an assurance to investors about market demand,? VP Raja, chairman, Maharashtra Electricity Regulatory Commission, told FE.
?Availability of surplus land also encourages conventional power generators to invest in renewable power capacity,? Raja said.
?Wind power at grid parity coupled with favourable regulatory environment is attracting lot of investments from independent power producers,? Charudatta Palekar, principal consultant, PricewaterhouseCoopers, said.
NTPC has lined up wind power projects worth 500 mw for implementation in coming years. Besides, it also plans to develop 130 mw solar power generation capacity at its existing plants in states like Andhra Pradesh, Chhattisgarh and Uttar Pradesh.
Reliance Power is investing R11,000 crore in renewable power generation capacity. It is making the largest ever investment at a single location to develop a 200 mw wind power project at Vashpet, in Sangli district of Maharashtra. The company also plans to invest R8,000 crore to set up 500 mw solar power generation capacity in Rajasthan over the next three years.