Wednesday, February 26, 2014: In an initiative to capture clean and renewable energy, the Indian public sector oil giants, will be forming new companies to set up large solar and wind energy projects in the country and abroad, since a memorandum of understanding (MoU) for setting up of the SPVs was signed by Oil Secretary, Vivek Rae, and New and Renewable Energy Secretary, Satish Agnihotri.
In the first step, the Oil and Natural Gas Corp (ONGC) with Oil India Ltd (OIL), GAIL, Engineers India Ltd (EIL), Solar Energy Corp of India (SECI) and Indian Renewable Energy Development Agency (IREDA) will set up a special purpose vehicle (SPV) to undertake big electricity grid-connected projects. For the second part, the SPV led by Indian Oil Corp (IOC) will work at setting up off-grid projects using the advanced technologies. The SPV will include Bharat Petroleum Corp (BPCL), Hindustan Petroleum Corp Ltd (HPCL) besides SECI and IREDA.
Farooq Abdullah, the New and Renewable Energy Minister (MNRE) said that the vast potential for setting up large social projects exist in Laddakh, Rajasthan and Gujarat. Similarly, offshore wind farms are envisaged in 15 nautical miles. While, at the MoU signing event, Rae said that the collaboration is aimed at leveraging the financial and managerial muscle of oil companies to scale up renewable energy projects, as well as manage complexities of small projects, in a Business Standard report.
Agnihotri said that the government is looking at ultra mega projects of up to 500 MW at a cost of Rs 60-70 million per MW. As per feasibility studies by EIL, the project is targeted to complete in three months. Two SPVs are likely to be incorporated by 15 August, this year. The two SPVs are proposed to be set up for promoting the deployment of technologies to supplement conventional fossil fuel based power generation, which will give boost to the development of large scale grid connected renewable energy projects and implementing off-grid applications, said the same report.
The BS reported that the SPVs will function independently as commercial organisations, and will utilise various promotional schemes of MNRE and State Governments for the purpose. The first SPV will be headed by ONGC and will be for installation of large scale grid connected power generation plants, based on the renewable energy. The second SPV will be headed by IOC that will be for setting up renewable energy off-grid projects using advanced technologies and market based business solutions, for promoting access to the energy deficient population.
