Welcome to another issue of our new India x Cleantech series! On a monthly basis, we are pulling news from across clean technology sectors in India into a single, concise summary article about the country.
Climate Policy & Carbon Tax
India seeks to be a global leader in climate change action, the country’s foreign affairs minister recently said. S Jaishankar, a seasoned foreign affairs professional, stated his government’s various efforts to shift towards a low-carbon policy across multiple sectors, including transportation and energy. India has set an ambitious target of 175 gigawatts of renewable energy capacity by December 2022. It has also set a target of having 450 gigawatts of non-fossil fuel power generation capacity by 2030. Jaishankar also highlighted recent measures by his government to promote e-mobility in the public transport sector.
The first-ever Fair Finance Guide India scorecard has found a poor record of several large Indian banks underprepared to address financial risks related to climate change. Seven of the eight banks analyzed in this study scored zero on the themes of climate change and environment. Public disclosures of the banks were analyzed for the purpose of this scoring. The study covered some of the largest public and private sector banks including, State Bank of India, Yes Bank and HDFC Bank.
Uncertain policy environment in the Indian renewable energy sector has started to show on the pace of investment. According to Mercom India, while the global renewable energy investment increased by 34% during first nine months of the year, investments in India slowed down. In 2018, investment in India’s solar power sector fell by 15% to $9.8 billion compared to $11.5 billion in the preceding year.
A division of Royal Dutch Shell acquired a 20% stake in Orb Energy, an Indian company that offers credit to small and medium-sized companies to set up solar power projects. This is Shell’s second major investment in an Indian renewable energy company. In 2018 the petroleum giant had acquired a 49% stake in Cleantech Solar, a Singapore-headquartered but India-focused solar power company.
Abu Dhabi-based Masdar Group is planning to acquire a 20% stake in a leading independent renewable energy power producer. Masdar could invest $150 million to own 20% in Hero Future Energies. International Finance Corporation may own 20% while the balance stake is expected to remain with the promoters.
The Indian government has issued new guidelines to facilitate the implementation of EV charging infrastructure in the country. As per the guidelines, installation of EV charging infrastructure shall be undertaken in a phased manner with large cities (with population of over 4 million) being covered first. At least one charging station has been envisaged in an area of 9 square kilometers in the cities while highways shall have charging stations at every 25 kilometers on both sides.
Reiterating their commitment to the memorandum of understanding signed in 2017, Toyota and Suzuki announced that they will launch affordable small electric cars to target the Indian mass market. Suzuki is expected to launch the electric version of its highly popular WagonR in 2021.
Tata Motors is prepping the launch of the electric variant of its compact SUV Nexon early next year. The car is expected to be priced around $23,900 with a range of 300 kilometers per charge. The car is expected to compete directly with the Hyundai Kona which, while offering a much higher range of 450 kilometers per charge, is much more expensive at around $35,000.
After ordering around 500 electric sedans from Indian companies, the Indian government has placed orders for Hyundai’s electric Kona as well. The government-owned Energy Efficiency Services Limited (EESL) ordered compact sedans from Tata Motors and Mahindra & Mahindra. There were reports that EESL was not satisfied with these cars as they had failed to deliver on their promised range of 150 kilometers per charge. EESL has now shifted preference to Kona with claimed range of 450 kilometers per charge.
Tata Motors has launched the upgraded version of its Tigor compact sedan for the mass market. The earlier version of the car was available only for commercial use, such as car aggregators. The first electric variant of the car claimed a range of 142 kilometers per charge, which has now been increased to 213 kilometers.
Renewable Energy & Batteries
India managed to add 4.3 gigawatts of renewable energy capacity in the period of April to September 2019. This includes 2.9 gigawatts of solar power and 1.3 gigawatts of wind energy capacity. While the capacity addition during the six month period is the highest in the corresponding period over last several years, it is only 36% of the target capacity addition planned for the period April 2019 to March 2020.
The Ministry of New and Renewable Energy refuted a report by ratings agency CRISIL which claimed that India would fail to achieve the 175 gigawatt target of renewable energy capacity by March 2022. The Ministry claimed that a large volume of capacity is in pipeline and 113 gigawatts would be achieved by March 2021. It further clarified that the milestone for the target capacity is December 2022 instead of March 2022.
EDF plans to increase its renewable energy portfolio in India to 1 gigawatt in the coming months in partnership with petroleum giant Total. The two companies have a joint venture operating the the country — Eden Renewables. The JV operates 200-300 megawatts of capacity and signed power purchase agreements for 716 megawatts of solar power capacity earlier this year.
The Indian government is studying the feasibility of setting up projects along the border with Pakistan in the states of Rajasthan and Gujarat. Studies are underway to determine the possibility to set up 30 gigawatts of solar and wind energy capacity in Gujarat and 25 gigawatts in Rajasthan. Both states have ample arid land and are blessed with significant solar radiation resource.
ReNew Power Limited, one of India’s leading renewable energy IPPs, is looking to sell 300 megawatts of solar power projects located in the southern part of the country. The company operates a sizeable solar power capacity in the state of Andhra Pradesh, which has seen sharp policy fluctuations over the last few months.
A draft policy, issued by the Punjab Energy Development Agency (PEDA), outlines technology-specific targets for solar power and bio energy. The state plans to set up 3 gigawatts of solar power capacity by 2030. To achieve this, the state will encourage the installation of utility-scale, canal-top, rooftop, floating and hybrid solar power projects. Punjab currently has an operational solar power capacity of 810 megawatts.
Bloomberg New Energy Finance expects India to add 2.9 gigawatts of wind energy capacity this year. The country added 2.3 gigawatts of capacity in 2018. Between 2019 and 2022 BNEF expects the cumulative capacity to be 15.6 gigawatts, which will increase the total installed capacity to 51 gigawatts, 9 gigawatts short of the target set by the Indian government.
India’s largest renewable energy company, ReNew Power Limited, achieved the milestone of 5 gigawatts of operational capacity. According to reports, it is only the 11th company in the world to have achieved this milestone. The company recently commissioned a 250 megawatt solar power project in the western part of the country.
Adani Green Energy, a subsidiary of Adani Enterprises, successfully raised $362.5 million through a green bond issue. The company offered a coupon rate of 4.625% and a 20-year maturity. According to media reports, this is the first green bond issued by an Indian entity with a maturity period of 20 years.
Urja Global Limited is planning to launch a green bond issue worth $500 million to finance renewable energy projects and electric vehicles. The company has signed an agreement with the state government of Andhra Pradesh to set up a manufacturing unit of lithium-ion batteries and electric vehicles.
One of the world’s largest railway systems, Indian Railways, has set a target to become a ‘net zero’ carbon emissions emitter by 2030. To achieve this, the Indian Railways is expected to shift from diesel locomotives to electric locomotives. Indian Railways is setting up rooftop solar power projects at several of its railway stations and has expressed interest in setting up large-scale solar and wind energy projects to power its operations.