GAIL India, a government-owned natural gas distribution company, has announced plans to enter the solar module manufacturing sector.
GAIL, formerly Gas Authority of India Limited, has expressed intentions to collaborate with other companies in an attempt to have footprint in the growing solar module manufacturing market in India.
It plans to set up a vertically integrated manufacturing facility covering production of polysilion, wafers, cells, and modules. While GAIL has not the disclosed name of the company it is looking to partner. Though, given its complete lack of exposure to renewable energy equipment manufacturing, it is likely that it would prefer to partner with a company well-versed in solar power technologies.
Like most other non-power-sector government-owned companies, GAIL’s renewable energy experience is limited to owning few hundred megawatts of solar and wind energy projects. However, it has made some efforts over the last few years to alter that. In 2019, it had expressed interest to acquire 874 megawatts of wind energy assets from financially troubled IL&FS. GAIL had submitted a bid of Rs 48 billion for the operational assets. However, the company lost out to Orix Corporation, which already held 49% stake in the assets.
In 2020, GAIL again tried its hands at investing in a renewable energy company. This time, a private solar power generator — Acme Solar Holdings. Never confirmed, GAIL had reportedly considered acquiring 49–74% stake in Acme. At that time, Acme was one of the largest private solar power companies, with a portfolio of 5.8 gigawatts, including nearly 3 gigawatts of operational assets.
GAIL now joins a long list of domestic and foreign companies looking to enter solar module manufacturing capability. An import duty of up to 40%, increasing demand, and capital incentives are driving new companies to enter this sector.
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