A new report from the Institute for Energy Economics and Financial Analysis (IEEFA) tracks key trends in major companies across India’s power sector value chain. He sees the country poised to lead the clean energy wave, with investors stepping up in response to bold policies that enable the transition.
Bold policies and reforms by the Indian government to enable the clean energy wave are bearing fruit as major players announce business plans, according to a new report from the Institute for Energy Economics and Financial Analysis (IEEFA).
“With soaring inflation of imported fossil fuels, energy security is a key national priority,” says report author Shantanu Srivastava, energy finance analyst at IEEFA. “India is tackling climate change through ambitious national clean energy targets and bold policies and reforms to support them.”
Some of the “big bang” policies include the green hydrogen and green ammonia policy, production-linked incentive programs (PLIs) for solar modules and batteries, and economic allocation based on the market to democratize electricity markets. Other initiatives include general grid access and green energy corridor projects encouraging investment in the grid sector, as well as private ownership through the National Monetization Pipeline and privatization of distribution companies. (discom).
Domestic and international power sector players are rapidly increasing India’s renewable infrastructure capacity and preparing for the next wave of sector reforms, the report says. Key trends among large power companies include diversification across the value chain, leapfrogging competition to adopt zero-emissions technologies, and value-added products and services such as peaking power supply , round-the-clock supply and enterprise decarbonization solutions.
Companies are betting on rapidly falling costs of producing green hydrogen to harness its use in energy storage, mobility, fertilizers, refining and industry. They also embark on the manufacture of electrolysers. Reliance Industries and Adani Group aim to produce green hydrogen at or below the cost of its fossil counterpart, the report said.
In energy storage, companies are betting on pumped hydro, virtual power plants, demand response management and battery storage to deliver dispatchable and controllable renewables and grid reliability .
The players participated in the government’s PLI program for the manufacture of solar panels, while acquiring stakes in public discom companies – integrating the last link in the value chain of the electricity sector. An example is the private sector integrated utility Tata Power, which recently acquired Odisha discom.
In transmission, operators such as IndiGrid InvIT (infrastructure investment fund) and Adani Transmission are vying for both new assets and brownfields, as government agencies seek to evacuate the large capacity of planned renewable energy production in the country. As power markets democratize and integrate, companies see opportunities in power trading through trades and contracts with customers through open access and trading capabilities .
Several industry players have diversified from commoditized power generation, distribution and transmission to providing value-added products such as peak power, 24-hour supply and business decarbonization solutions that generate higher margins and offer growth prospects in a rapidly changing environment. energy saving.
“For India to accelerate its transition,” says Srivastava, “it is imperative to build momentum in clean energy investments through such corporate policies and actions. This, in turn, depends on clarity and integrity on the political front and the availability of cost-effective, long-term funding to fuel industry players’ ambitious long-term infrastructure plans.
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