A highlight of RE Invest 2015

The number of Indians that do not have access to electricity is roughly equal to the population of USA(WRI), and the new Indian government elected in 2014 and led by Prime Minister Narendra Modi has made a strong commitment to its voters to provide 24-hour electricity access to all by 2019. The government sees renewable energy as a critical component of its bid to provide energy access to all, and has announced extremely ambitious plans to increase the country’s renewable energy capacity. It has increased India’s target installed solar capacity by nearly 33 times over the coming seven years from ~3000 MW to 100,000 MW. The task would require a colossal investment to the tune of $100 billion (Reuters). Further, the government also wants to install nearly 60 GW of wind energy by 2022.

In February 2015, the Government of India organised RE-Invest 2015, a major global investors meet & expo targeted at India’s renewable energy sector. The expo served to signal India’s long term commitment to development of renewable energy to meet the country’s energy needs, and subsequently attract large scale domestic and international investments. The platform, which was the first of its kind at such a colossal level, saw representation from nearly 41 countries and even ministerial delegations from the UK and Germany. The focus of RE-Invest was to

  • Promote international investment in the Indian renewable energy sector.
  • Enable Indian companies to showcase their manufacturing capabilities and products
  • Promote individual states as an investment destination
  • Bring key industry stakeholders (project developers, financiers, investors, etc.) to share latest insights into the latest developments and trends on both the technology and financing fronts
  • Demonstrate investment opportunities across the entire renewable energy chain in India, with separate emphasis on different sources within the larger RE chain
  • Showcase policy initiatives being undertaken at the state as well as national level to promote renewable energy, and further conduct targeted discussions around policies, compliance norms, and incentives for projects

Prime Minister Modi inaugurates RE-Invest (Source: PM Modi’s website)

Some significant commitments were laid out by various companies at this expo. To understand why the commitments laid out are extremely ambitious, one must keep in mind India’s current installation numbers – renewable energy contributes about 6% of the total power generated in India, with ~3GW of solar and ~21 GW of wind installed currently. The size of commitments made at RE-Invest when compared with India’s current installation numbers speak volumes about the industry’s confidence in India’s RE sector. Some key commitments made are highlighted below.

  • Nearly 387 global and domestic companies/stakeholders made commitments to set up renewable energy projects that aggregate upto nearly 270 GW. Nearly 17 companies have also committed to setting up manufacturing facilities that aggregate to nearly 62 GW. Major American companies also made ambitious commitments. For example – SunEdison committed to setting up 15.2 GW worth projects and the pv cell manufacturing company First Solar committed to setting up 5 GW capacity by 2019. Other major Indian companies have each made commitments to set up wind and solar energy projects in the range of ~5000 MW– ~12,000 MW. (The complete list of commitments made by companies can be found here on the RE-Invest webpage)
  • Nearly $200 billion is expected to be invested in the Indian renewable energy sector.
  • 30 Financial institutions/lenders committed to finance 70 GW of renewable energy projects. In fact, India’s largest lender, the State Bank of India (SBI) committed ~USD 12,000 million for the generation of 15 GW of clean energy over 5 years. Along with SBI, other banks also mentioned that there was potential for the interest rate for the clean energy sector to also considerably come down.
  • The government has even proposed building a consortium of 50 countries with abundant solar potential to pool research and technology advancements for the growth of the sector, especially in its outreach to the poor.

The vision presented at the expo was well received by the industry. In fact New York city’s erstwhile mayor and UN secretary general’s special envoy for cities and climate change Michael Bloomberg said during his address at the expo that he was very bullish on India’s future, citing steps that India has taken to move towards a cleaner and low carbon economy.

Jpeg 2_Michael Bloomberg arriving at the expo in a CNG powered rickshaw

Michael Bloomberg arriving at the expo in a CNG powered rickshaw (Source: UN and Climate Change)

The intent for the expo was to highlight India as an attractive investment destination and encourage companies to set up manufacturing facilities and generation projects in India across the entire value-chain. Undoubtedly the road to achieve the numbers is filled with obstacles in terms of financial health of the power offtakers, high costs of capital, and land acquisition challenges – obstacles that require urgent attention from the government. But, regardless, there is a very strong buzz in all factions of the industry, with the Indian renewable energy sector touted to be one of the most exciting markets globally. In fact, buoyed by the success and response received at RE-Invest 2015, a 2nd expo, RE-Invest 2016 is being organised in February 2016, which will build upon the commitments made in the 1st expo and take the dialogue forward. As Prime Minister Modi rightly said, “India has now graduated from megawatts to gigawatts in terms of renewable energy production.”