India 2016: Led by policy push, solar set to be ruling theme in renewable energy growth

India’s prime minister Narendra Modi made a big push for renewable energy by raising the target twice. And that is taking this industry to another level.

2016 Outlook

In 2014, his government upped the 2022 target of the national solar mission to 100 gigawatts, from the earlier 20 GW. And at the Paris climate summit in December, he said that India will produce 175 GW from non-fossil sources by 2022. In eight years after that, 40 per cent of the nation’s electricity will come from renewable energy.

Such ambitious targets have spurred big-ticket investments, and a bunch of companies have emerged to take advantage of the opportunity, which includes getting subsidies over a period of time by the government to encourage more companies to set up plants for solar and other renewable energy. India will need to add 15 GW of capacity each year until 2022 to meet the goal set by the government.

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However, the regulatory environment and infrastructure needs to keep pace to meet such lofty targets. India’s current installed capacity is 2,900 MW. No country has ever managed to grow like Modi’s government wants it to. China, the largest producer of solar energy, has a capacity of 40 GW. Germany, which leads in renewable energy in Europe, has lower installed capacity.

For now, the sector is growing fast and that pace is expected to accelerate in 2016, assuming that the broader macro environment does not worsen significantly. However a major challenge will be on selling solar power to state-owned distribution companies that are heavily indebted in several states such as Delhi, Tamil Nadu, Uttar Pradesh and Bihar. Gujarat, where Modi had launched a solar mission when he was chief minister, is now a power-surplus state, so does not need that much of solar power.

Second, a bidding war might force renewable power producers to bid for lower tariffs that might hurt profits. The companies will be helped by the decreasing costs of solar and wind power, which can now rival that produced by new coal plants.

But that said, the year ahead promises to bring in a lot more addition in solar capacity, and might see even lower costs of production at a wider scale. Investors would be watching to see if the electricity can be profitably sold.

Also Read: 

India mulls $1b private equity fund for clean energy

India 2015: Top five private equity deals cross $1b in renewable energy space

India: BK Goenka-led Welspun Group to sell its renewable energy business

 

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.