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India's ambitious target of installing 170 gigawatt of clean energy by 2022 may not be possible unless central and state governments take immediate measures to help the industry overcome financial and regulatory constraints, top companies in the industry say.
Clean energy firms such as Suzlon, Mytrah, Vikram Solar and Mahindra & Mahindra's Susten listed a number of preconditions that need to be fulfilled to enable generate enough clean energy in the country.
"The Centre and states should have a harmonised policy so that investors can easily put up projects," said Tulsi Tanti, chairman and managing director at wind turbine maker Suzlon. "Then availability of finance in a way that debt equity ratio is 80:20 and tenure of debt is 20 years long, so that cost of financing and energy comes down, is required."
Tanti added that the government should mandate captive clean energy use for small and medium enterprises, giving them lower interest cost on setting up such projects.
Suzlon has committed 11,000 megawatt of clean power to the government, of which it plans 5,000 from solar energy.
"We plan a hybrid model of wind and solar energy, whereby solar plants will be set up on the same land as wind turbines. This saves us from land issues and overcomes power evacuation hurdles as grid is available near our wind farms," Tanti said.
Ravi Kailas, chairman and CEO at Mytrah Energy, told ET that financing is the key constraint in installing so many gigawatts of clean energy, especially the unavailability of long-term debt . "World over infrastructure has been financed by pension funds and India is far from that, so unlocking pension funds' ability to invest will completely change the game for reaching this goal," he said.
"Banks treating renewable energy as priority sector will take out another impediment from financing this sector. It's the debt market that needs attention," Kailas said.
Ivan Saha, president and chief technology officer at Indian module maker Vikram Solar, said having a fixed timeline of setting up clean energy projects is the most critical component in reaching the solar and wind targets.
"There is a cycle of frenetic activity for some months when bids for solar projects are announced and then a long lull," Saha said. "Therefore, a continuous process of planning, bidding and land identification have to take place according to a time
According to Mahindra & Mahindra's green energy vertical Susten, the government should take care of both land and grid infrastructure to make this target a possibility.
"The question is, how effectively can the government address issues to do with power evacuation? I can buy land but I cannot do anything when it comes to grid as it is in the hands of central and state government.
The government needs to actively start building the green corridor they're talking about," said Basant K Jain, CEO of Susten.
At present, India has only 33 gigawatt of clean energy capacity, with 22 gigawatt from wind, approximately 3 gigawatt from solar energy and the remaining from small hydro and biomass projects.
In November last year, the government set an ambitious target of setting up 170 gigawatt of clean energy projects by 2022 with 100 gigawatt from solar, about 50 gigawatt from wind and the rest from small hydro and biomass.
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