Boost for Modi's renewable energy push as Hindujas plan to invest $1 bn

The Hinduja Group on Monday said it plans to build solar-based power stations to generate 1,000 MW at the cost of around a billion dollars.

Speaking to CNBC-TV18, Gopichand P Hinduja, co-chairman of the $25-billion Group said that the company is willing to invest in only renewable energy greenfield project in India.

“We have identified three companies with whom we are going to be joint-venture partners. I have identified, acquired the land also where we want to go but again we are waiting for reforms to take place,” Hinduja said.

In January, Prime Minister Narendra Modi announced his plan to boost solar energy capacity 33 times to 1,00,000 MW of installed solar power capacity by 2022 from the present 3,000 MW.

After PM’s announcement, on 11 February the Power, Coal and Renewable Energy Minister Piyush Goyal said that he expected that renewable energy sector to attract investment of $200 billion.

“We are looking at nearly twice the amount of interest than what our target is, more than 200 GW or 2,00,000 MW, with investments of $200 billion,” said Goyal.

The Renewable Energy Global Investors Meet & Expo (RE-Invest) is currently under way in New Delhi.

Besides Hinduja, many other companies like Sun Edison, Mahindra Susten, Welspun Renewables etc. have committed to invest in the renewable energy sector.

Mahindra’s renewable energy arm Mahindra Susten aims to become a billion dollar entity over the next two to three years.

Welspun Renewables has pledged to set up 11,001 mega-watts of solar and wind power projects while Sun Edison plans to build 15,200 mega-watt.

Talking on the sidelines of the RE-Invest 2015 meet, Pashupathy Gopalan, president of SunEdison Asia-Pacific said, “SunEdison is proud to support Prime Minister Modi’s mission to add 100 gigawatts of clean energy to India’s grid by 2022.”

In a white paper, Crisil said that the cost of capital of solar power needs to fall below Rs 5 crore per mega-watt for it to get a big push without government support.

“The technology curve for solar power is evolving. In the last two years, capital cost per mw has fallen from Rs 14 crore per mw to less than Rs 8 crore. Consequently, average solar tariff rates have declined from Rs 15 per kWh to Rs 8 per kWh. Crisil believes for solar power projects to achieve grid parity with traditional sources, capital cost needs to fall below Rs 5 crore per mw. And until that is achieved, government support through preferential tariff or viability gap funding will be critical,”  the Crisil paper said.

The current cost of solar power production is pegged between Rs 6-8 crore per mega-watt.

With inputs from Agencies