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The power sector has the potential to attract $250 billion investments over the next five years, said Piyush Goyal, Minister of Power, Coal and New and Renewable Energy.
Speaking at the World Economic Forum’s India Economic Summit 2014 here on Thursday he said, “Over the next five years, the Indian power sector would provide an investment potential of $250 billion of which $100 billion will come into the renewable energy sector and $50 billion for the transmission networks,” said Goyal.
Transmission lines “We want clean energy and we don’t want a situation where certain States have excess power but can’t give it to deficit States due to the lack of transmission lines,” he added. Talking about power sector issues at the event, the Minister said India’s power needs is expected to double sometime during the next five years and the aim is to double current generation capacity by 2019.
“Right now we produce one trillion units a year and the aim is to take it to two trillion by 2019. But, to do it there are challenges of fuel supply and ensuring how to increase the share of renewable.
“Till now renewables only produce six per cent of the total number of units. Stranded gas-based power plants also need to be revived,” said Goyal.
The Supreme Court verdict of September 24 de-allocated 204 coal blocks given to companies between 1993 and 2010 putting pressure on the Government to ensure fuel supply to power plants.
The Government has since promulgated an ordinance to allow for e-auctioning coal blocks in order to ensure continuity of production from these blocks after March 31, 2015.
Also, the Government announced a new price for domestically produced natural gas on October 18.
These steps will take care of fuel supply concerns and the focus will now be to revive gas-based power plants, said Goyal.
On renewable and clean energy, he said that the focus of the Government is to improve the bankability of solar power purchase agreements as subsidies are a thing of the past.
Solar push “With interest rates coming down, stability in the foreign exchange rate to help hedging, the cost of capital for renewable projects will come down. The target of solar generation has also been increased to 100,000 MW by 2022,” said the Minister.
He added that high tax paying corporates like NTPC and Coal India can invest in the renewable sector and get the benefit of tax incentives for those investments.
On nuclear projects, Goyal said that India is being cautious about nuclear power plants as the lifecycle cost of a plant is not yet clear.
“I hear that US and Europe are also not developing new nuclear power plants. We are cautious about it as we don’t want to be saddled with an old asset in the garb of alternate energy,” he added.
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