Goyal pegs power sector investments at $250 bn

Minister says addressing fuel supply issues, increasing private participation high on govt's agenda

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New Delhi, November 7, 2014: India's energy sector will see investment of $250 billion (Rs 15.3 lakh-crore) in five years as the government addresses key constraints, including fuel supply issues and problems in private sector participation, said Piyush Goyal, the Union minister for power, coal and renewable energy.

"This will include $100 billion in renewable energy and another $50 billion in the transmission and distribution sector," he said at a gathering of global and domestic investors and policy makers at the India Economic Summit here.

His ministry, said Goyal, had solutions for all the problems being faced by investors. The new government, he said, was focusing on increased private participation in coal mining, in technological upgradation of Coal India's operations and clearances for new mines for the mining behemoth, to double annual coal output from the current 500 million tonnes in a few years. "This will increase the plant load factor of power stations. We are also working out solutions for the issue of stranded gas-based capacity," he said.

And, was going to expand the contribution of solar power in India's overall energy supply. "The original task was to increase solar capacity from the current 2,000 Mw to 20,000 Mw by 2020. Now, the government has raised it to 100,000 Mw," he said, adding the economy of scale achieved will allow technology upgradation that will further drive down costs.

"The government is trying to ensure bankability of power purchase agreements for renewable power. This government will protect investments and remain committed to providing power to all. We are incentivising more production to have grid stability."

Experts at the session pointed to more pressing issues. Bankability of projects, consistent yields on investments, consistency in regulation and policies are some of the key factors that impact investments, said Dong-Kwan Kim, managing director at Korea-based Hanwha Group. "The cost of capital is too high. Many of the off-grid consumers might not be able to afford it."

Ashvin Dayal, the MD of Rockefeller Foundation in Thailand, said some of the key factors that would determine the government's ability to make power available to remote areas are the cost of technology for storage solutions and an integrated approach in decision making and implementation of policies.

Courtesy: The Business Standard