India’s Green Energy Ambitions Present A Significant Opportunity For ENGIE
Incorporated in 2014, ENGIE is one of India’s leading clean-power generation companies. Part of the global France-headquartered ENGIE Group, ENGIE India is focused on strengthening its commitment to India’s de-carbonization goals. In this exclusive interview, Amit Jain, Managing Director, ENGIE India, tells us more about ENGIE India’s current activities and future plans. Jain also shares keen insights on India’s new clean energy initiatives like offshore wind farms and grid-scale energy storage. An interview by Venugopal Pillai.
Let us start by understanding ENGIE India’s current renewable energy portfolio. What impact the acquisition of SolaireDirect had?
The acquisition of SolaireDirect was more than eight years ago. The portfolio acquired provided a fantastic platform to enable ENGIE’s global renewables acceleration to more than 38 GW by the end of 2022.
The acquisition of SolaireDirect in 2016 had a significant impact on ENGIE India’s renewable energy portfolio. As a result of the acquisition, ENGIE India was able to expand its solar power capacity significantly. In 2020, ENGIE India announced that it had commissioned a 200-mw solar project in Rajasthan, which was one of the largest solar projects in the country at the time.
The project was built using SolaireDirect’s technology and expertise, and it helped ENGIE India become one of the leading players in India’s solar power sector.
Overall, the acquisition of SolaireDirect has helped ENGIE India to diversify its renewable energy portfolio and strengthen its position in the Indian market. We are now well-positioned to take advantage of the growing demand for renewable energy in India and contribute to the country’s transition to a low-carbon economy.
What is your targeted portfolio, say in the next five years? What would be the broad breakup of solar and wind?
ENGIE India had a total renewable energy capacity of 1.5 GW from wind and solar plants, with a further 400 mw in the pipeline.
Globally, we are targeting 50GW by 2025 and 80GW by 2030. We are hoping that we can secure further renewable opportunities in India.
We gather that ENGIE has a partnership with Edelweiss with respect to renewable energy assets. Please elaborate.
Correct, ENGIE and Edelweiss Infrastructure Yield Plus signed a strategic partnership for solar assets in India back in 2020.
In line with both ENGIE’s and EIYP’s strategies, we agreed to sell a 74 per cent stake in 12 solar assets aggregating 813 MWp of operating capacity collectively to EIYP and Sekura Energy Ltd, a portfolio company of EIYP.
This reduced our net debt by more than EUR 400 million, which then freed up capital for re-investment in other renewable projects. In India, as in many other countries, ENGIE uses all its engineering capabilities to design, finance and build renewable energy production capacity. Once this capacity is built, ENGIE partially disposes of its interest and retains the O&M of the asset. The value created by this “Develop Build Share Operate (DBSO)” strategy increases significantly the impact of solar and wind development potential in many countries.
India is beginning to explore offshore wind energy, initially through pilot projects. How do you gauge the potential? Would ENGIE be interested in pursuing offshore wind energy options in India?
The Indian government has recognized the potential of offshore wind energy and has set a target of installing 5 GW of offshore wind capacity by 2022 and 30 GW by 2030.
While India is still in the early stages of exploring offshore wind energy, there is significant potential for the sector to grow and contribute to the country’s renewable energy mix.
Offshore wind energy is a reliable and cost-effective source of renewable energy, and it can play a crucial role in meeting India’s energy demands while reducing its carbon footprint. As a leading player in the renewable energy sector, ENGIE is always exploring new opportunities to expand its portfolio and contribute to the transition to a low-carbon economy.
In other parts of the world we are already on this trajectory, with 14 projects in progress in seven countries our JV Ocean Winds project is aiming to become a world leader in offshore wind power. This 50-50 joint venture between ENGIE and EDPR has an offshore wind power portfolio totalling 14.5 GW
From pure solar and wind firms, we are seeing the emergence of hybrid (solar + wind) projects in India. What is your take on the matter?
The emergence of hybrid solar-wind projects in India is an exciting development that can help address some of the challenges associated with intermittent renewable energy sources. Solar and wind energy are both highly complementary sources of renewable energy, as they often produce energy at different times of the day and in different seasons. By combining solar and wind energy in a hybrid project, there is a potential to optimize energy generation and improve the overall efficiency and reliability of the power plant. This is something we are exploring but not yet involved.
Speaking of grid-scale energy storage in India, what challenges do you foresee, from a techno-commercial perspective?
Grid-scale energy storage has the potential to play a critical role in India’s energy transition, as it can help to address some of the key challenges associated with renewable energy integration, such as grid stability and intermittency.
There is a global challenge when it comes to energy storage and this revolves around regulatory framework, lack of clarity on the pricing etc.
With respect to the O&M of solar PV farms, we understand that ENGIE advocates the use of robotic cleaning. Please discuss how this could prove cost-effective.
As dust builds up on the surface of the PV modules, the capability of electricity generation is constrained. To avoid generation loss, these panels need to be cleaned regularly. Traditionally, cleaning the solar panels required a large volume of water (a 1-mw solar plant requires 150,000 litres of water per annum, on average).
In a country like India where clean water is a luxury and water scarcity is a concern, excessive use of water cannot be freely recommended.
Robotic solar cleaning offers a revolutionary and water-free solution to remove dust from panels. Hence, it is the solution that India requires today to augment the penetration of solar plant installation while reducing the reliance on water
India has been bidding out solar and wind projects under the reverse auction route, resulting in unusually low tariffs. What is your view? Do you specifically feel that this could hurt the overall capacity addition programme with developers unable to honour the tariffs committed?
India has been using the reverse auction route since 2017 and the auctions have resulted in record-low tariffs, making India one of the cheapest producers of solar power globally.
The low tariffs have been attributed to several factors, including the availability of cheap financing, reduced solar panel costs, improved technology, and economies of scale. Additionally, the Indian government’s push towards renewable energy and the scale of the projects being offered have also contributed to the low tariffs.
While low tariffs may seem like a good thing, some experts have raised concerns about the sustainability of such tariffs in the long run. Critics argue that these tariffs may not be enough to cover the cost of the project and provide a reasonable return on investment for the private developers. This could lead to developers cutting corners on quality or delaying the completion of the project, which would ultimately impact the reliability and stability of the grid.
India has significant green energy ambitions and ENGIE has long years of experience in this very field. Given this, how do you see the overall opportunity for ENGIE in India? What would be your focus areas in the subcontinent?
India’s green energy ambitions present a significant opportunity for ENGIE, given its extensive experience in the renewable energy sector. Globally, we, at ENGIE, have a target of achieving 80 GW of renewable capacity by 2030.
India has set a target to reduce the carbon intensity of the nation’s economy by less than 45 per cent by the end of the decade, achieve 50 per cent cumulative electric power installed by 2030 from renewables, and achieve net-zero carbon emissions by 2070.
The country has already achieved its commitment made at COP 21- Paris Summit by meeting 40 per cent of its power capacity from non-fossil fuels- almost nine years ahead of its commitment and the share of solar and wind in India’s energy mix have grown phenomenally. We have been part of this growth trajectory and would like to continue along this path in support of the country’s energy transition.
Source: T&D India