US Firm to Invest Billions to Set Up 1000 MW Solar Thermal Power Plants in India
US-based energy firm Bergamo Acquisition Corporation has partnered with an Indian company to set up 1000 MW of solar thermal power plants across India. Bergamo will hold 60 percent equity in the joint venture. The company has already selected six sites in as many states to set up the six 100 MW power plants. The company eventually has plans to ramp up the capacity to 1000 MW.
The joint venture’s first power plant will come up in Solan, Himachal Pradesh. The company would also invest almost $220 million to set up a consumer-cum-retail division to provide high quality solar products such as solar heaters and solar lamps. A facility that will manufacture these products in India will also be set up by 2011.
The increased interest in the Indian solar energy sector is the result of the Indian government’s plan of setting up 20,000 MW of solar power capacity by 2022. Under the National Solar Mission, the central and state governments will provide several financial incentives to investors who wish to invest in solar energy-based power generation.
In addition to tax benefits and guarantee returns on investments, the government has also set premium tariff rates for solar PV and thermal power plants which are almost six to seven times those offered to coal power plants. Therefore, several government-owned companies including the leading oil and gas companies have multi-million dollar investment plans in solar and other renewable energy technologies.
The demand for solar energy-based power is also increasing as all the states are required to buy a definite percentage of their power from renewable energy power plants. And even though the per unit cost of generation is significantly high for solar energy power plants, the power companies will pool the electricity from conventional power plants and renewable energy power plants to sell it at a lower price in order to insulate the consumers from the high tariff rates. The government would compensate the power companies through several financial incentives.
The National Solar Mission is divided in three phases on the basis of installation targets— 1300 MW till 2013, 10,000 MW till 2017 and 20,000 MW by 2022. The projects for the first phase have already been approved. According to the Debashish Majumdar, chairman and managing director of Indian Renewable Energy Development Agency the quantum of projects outstripped the proposed target for the first phase.
“We are over-subscribed for the first phase of 1,300 MW, and by December 2011 generation will have begun work for at least half of this target. The rest could be done by December 2012 which will be ahead of schedule. There is no dearth of investors.”
Going by current figures, for example, investments chasing every 1000 MW of photo-voltaic and solar-thermal power was almost four times the capacity.
Other foreign companies looking to expand their presence in the Indian solar energy market are: Siemens which recently launched its renewable energy business in India; equity firm Blackstone invested $300 million in one of India’s leading solar cell manufacturing company, Moser Baer; Astonfield Renewable Resources announced an investment plan of $2 billion to build 500 MW solar PV plant.
Image: Worklife Siemens at Flickr (Creative Commons)
The views presented in the above article are author’s personal views and do not represent those of TERI/TERI University where the author is currently pursuing a Master’s degre
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