CLP reaps Indian winds of change

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Posted on: 30 Nov 2011

Hong Kong listed energy provider CLP's Indian subsidiary is set to become the largest wind energy developer in the country by 2012, said observers, with a total power portfolio of 638.8 mw.
The company has already commissioned six wind energy projects in various parts of India, and is in the process of developing two new wind farms by next year. The company has invested close to US$2 billion in the Indian market in the last 10 years.
The Chinese mainland's Suntech Power is also taking a stake in India's renewable energy sector and is to supply 100 mw worth of solar panels to India's SunBorne Energy over the next two years.
Another Mainland company - GCL Solar Systems - is in talks with India's solar photo-voltaic (PV) cellmaker Indosolar for a four year solar wafer supply deal, which could be worth US$2 billion.
XinTong Solar Technology of the Mainland has meanwhile entered into a joint venture with ALTA Energy of India to supply 2000 solar powered systems to power mobile phone towers.
At the same time, the Mainland's Dongfang Electric has received international quality certification issued by German testing agency TUV Sud for one of its wind turbines, which removes a barrier to selling it in India.
These are some examples of how Hong Kong and the Chinese mainland have moved centre stage in the Indian market to partner with the Indian renewable energy industry. Mainland and Hong Kong players are understood to be supplying almost 25% of the country's requirement for renewable energy equipment.
Prices that are between 10% and 15% lower than Indian and other overseas equipment, along with timely delivery and installation, are major reasons why Hong Kong and Mainland firms are preferred.
Additionally, the option to borrow in Rmb is another good reason for these companies' ability to capture a large slice of the Indian market over a relatively short period.
Various government incentives, such as no duty on imports of power equipment for the renewable energy sector, have attracted Indian power companies to invest in Chinese technologies.
Besides, India's new, renewable power equipment manufacturers still need to develop huge capacity to service the growing domestic market.
Opening renewable sector
India's Ministry of New and Renewable Energy, set up in 1982, has been setting ambitious targets for renewable energy generation.
Renewable energy capacity is 20,152 mw, a share of 11% of total power generation capacity, both new and conventional.
Wind energy accounts for the major share here at 70%, followed by hydro power capacity which enjoys a 15.7% share.
By contrast, solar power represents less than 1% of renewable energy components, although the Ministry has targeted setting up 1,300 mw capacity by 2013.
By 2017, solar energy will need an investment of US$19 billion. The country has the potential to generate eight million mw of solar energy per year.
On a larger scale, India's wind energy capacity is estimated to hit 20,000 mw by 2012, around 25,000 mw by 2015, and around 46,000 mw by 2020.
According to the Geological Survey of India, the estimated potential for geothermal energy in India is about 10,000 mw while the country's hydro potential is 84,000 mw, ranking India fifth in the world in terms of exploitable hydro potential.
Another alternative source, biomass power generation (mainly from agricultural waste), attracts investments of over US$135 million annually, generating more than 5,000 million units of electricity.
Besides renewable energy, the government has placed emphasis on energy conservation, which is the most cost effective way to improve energy availability.
India's power sector is aiming at bringing "power to all by 2012". While investment and capacity targets have been identified, actual achievements are lagging.
The power ministry is struggling to provide a capacity of 50,000 mw even after the Planning Commission reduced the target to 62,000 mw in the mid-term review of the current 2007 to 2012 energy plan.
Even so, efforts to add more energy capacity continue as a national trend.
Such plans are aimed at rural electrification, providing viable, sustainable solar cooking options in rural areas, solar panels in rural homes, solar energy operated water pumps and solar powered street lighting.
Incentives are available for solar water heating and solar panels in major cities too. Some industrial establishments, in the hospitality and real estate sectors especially, have taken advantage of these policies to move towards sustainability.

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Posted: 30 November 2011

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