Coal News We love to talk!

JUN 06 2017

US pullout from Paris accord to brighten climate for Modi's green energy plan

  • Economic Times, ET Bureau / Hyderabad
  • Created: Tue 06th JUN 2017


US withdrawal from the Paris climate deal can potentially elevate India to a leadership role in the global fight against climate change and sharpen investor focus on the Narendra Modi government's programme to build massive renewable energy capacity.

The government is working to build 175 GW (giga watt) of renewable energy capacity by 2022, envisaging an estimated investment of $175-180 billion. The green push will not end there. The government expects non-conventional sources to account for 40% of total generation capacity by 2030.

The sheer scale of the government's programme -- the largest such scheme in the world -- offers heavy traction for investors. This has already been demonstrated in successful green Masala bond issues worth nearly half a billion dollars by coal-burning behemoth NTPC and IREDA, government's funding agency for renewable projects.

"India will pick up any investment slack in the US after the pullout as investors and fund managers look for a country with a solid green energy policy and commitment. This means fatter and wider sources of funding for Indian solar and other renewable energy projects," a government official said.

Other such as Raj Prabhu, CEO of US-based green energy market tracker disagrees. "The impact for India will be almost zero in the short-term. It will not have a significant impact in the short-term as the withdrawal will take approximately four years, which means the next election could decide what will happen," he told TOI on Saturday.

But there are yet others who feel that emerging technology and economy of scale have created enough market force to drive renewable capacity building in years to come, though coal will remain the mainstay for providing 'base load'. Solar tariffs recently dropped to Rs 2.44 per unit for a project in Rajasthan's Bhadla solar park. This is 18% lower than the average tariff of Rs 3 per unit for power from NTPC's coal-fired plants.

Simultaneously, solar module prices have continued to slide, with Chinese supplies becoming 11% cheaper than a year ago and the government announcing several incentives to promote domestic manufacturing. Officials said such market dynamics is enough to drive growth in renewables. The government's policy focus and commitment, then, is the icing on the cake.

"With all the attention given to the solar industry, we need to recognise that electricity generated from solar makes up just 1% of the total power generated in India and there is a long way to go for India to shift from its dependency on coal to renewable energy. (but) Because of severe pollution issues, China and India have no other option but to continue to develop renewable energy sources," Prabhu said.

According to Prabhu, the Indian renewables industry, especially solar, should be more worried about GST impact, poor financial health of discoms, poor traction in demand growth, RPO (renewable power obligation) shortfall, curtailment and other issues.


Rajasthan TOTAL Sri Prabhu Lingeshwara Sugar & Chemical Ltd Renewable Purchase Obligation Renewable Energy Coal Tariff China NTPC Ltd Energy United States Power Electricity India Solar

Related News

  • Worlds biggest natural gas producer Gazprom eyes bigger share in India  Read more
  • ONGC, Cairn India demand halving of cess on crude oil  Read more
  • Solar power: New government can begin with big business set-ups  Read more
  • Oil wars: How Kremlin's $13 billion Indian deal almost fell apart  Read more
  • Power-hungry businesses build their own solar plants  Read more
  • CNG Fuelling facilities of IGL in Delhi & NCR enough to meet increase in demand, can dispense 35 lakh kg per day  Read more
  • Coal-power projects worldwide, including India, see steep drop  Read more
  • Indias coal imports climb 43% in May, shipping data shows  Read more
  • Hopeful of Unesco nod for $16-billion Adani coal project: Australia  Read more
  • Sterling and Wilson bags solar power project in Abu Dhabi  Read more