Indian largest oil refiner and marketer is planning a large investment for a major push in renewable energy.
According to media reports, Indian Oil Corporation plans to invest as much as Rs 25,000 crore (US$3.5 billion) over the next few years to set up wind, solar, and bio-fuel plants. The company is also looking to invest in alternate energy solutions.
The company has an installed renewable energy capacity of 216 megawatts. The company did not share the exact details of how it plans to increase this installed capacity but did share some broad initiatives it is looking to implement or expand upon.
One of those initiatives is the installation of solar power systems at Indian Oil’s fuel retail stations. The company has around 24,000 retailing stations. In 2015, we covered a story that the company was planning to install solar power systems at 10,000 of these stations. Indian Oil had announced a scheme offering a financial subsidy up to 50% for the fuel station owners to set up solar power systems, with and without battery storage. The company has reported that around 2,000 of these fuel stations have solar power systems installed.
In the recent past, the company has also announced plans to set up large-scale solar power parks for self-consumption and to meet its renewable purchase obligation. Indian Oil, along with Oil India Corporation, had signed an agreement with the state government of Madhya Pradesh to develop solar power projects with a cumulative capacity of 2.7 gigawatts.
Indian Oil is also working on the production of biofuels including waste-to-energy and ethanol. Blending gasoline with ethanol has found a major push from the Indian government which is looking to reduce the use of gasoline to cut foreign exchange costs as well as reduce vehicular emissions.
The company has pledged to invest in second and third-generation biofuels in order to meet the increasing demand for ethanol. India’s National Biofuel Policy 2018 aims to achieve 10% ethanol blending in gasoline by 2022 and 20% by 2030. According to the United State Department of Agriculture, India is expected to hit an all-time high ethanol blending of 5.8% this year.
While ethanol blending and other similar initiatives are offsets of Indian Oil’s core petroleum business the company may have to make significant investments in the large-scale renewable energy business as well. Being a public sector company under the direct control of the central government it may be asked to focus on setting up large-scale renewable energy projects, especially because it already has substantial experience in the area. We recently covered a story stating the Indian government may allocate targets to public sector companies to set up renewable energy parks across the country.