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Lower crude prices usually spell trouble for renewable energy projects as both institutional investors and Big Oil lose economic incentive to go green. But not so for India, says power, coal and renewable energy minister Piyush Goyal as the Narendra Modi government moves to ramp up solar power capacity to 100,000 mw by 2021-22.
"For us, renewable or solar is not only about economics. It's a deep passion and our PM's and nation's commitment -- in that sense, all our commitment -- to leave behind a cleaner world for the next generation. As the PM said when someone asked him during the US President's recent visit, 'For us there is no pressure of Lima, or Peru or Paris (global climate talks). The pressure is internal to us. It is an acquired pressure. For the future generation'," Goyal told TOI on Wednesday.
Explaining the economics, Goyal said oil or gas was not the main source for generating power in India. Nearly two-thirds of the 2.5 lakh mw installed generation capacity used coal as fuel. Availability of gas was also limited. "Oil prices may go up or down (but it doesn't affect our solar plan)... Rather, if other countries are pulling back on renewable projects, it is good for us to drive a hard bargain for getting equipment at a cheaper rate," he said.
Several global oil majors have exited or put off plans to set up renewable energy projects in recent times after oil prices plummeted by half since June 2014. But Goyal's optimism does not seem out of place, going by the response to a three-day global renewable energy investor summit his ministry is holding with industry chambers CII and Ficci in the capital from Sunday.
"The response has been so overwhelming that we have had to close registrations earlier than the deadline," he said. He reckons some $200 billion investments in renewable energy projects over the next several years and is putting in place policies to wean the sector away from subsidy.
The policies are focusing on addressing issues of both grid-connected as well as off-grid projects. Simultaneously, funding plans are also being put in place. The pricing issue is being addressed through mandatory renewable energy procurement norms for state utilities for bundling with power from traditional sources. Power from traditional sources costs an average of Rs 3 a unit, while solar power costs Rs 12-15.
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