India’s corporate sector earlier took measures in renewable energy and energy efficiency independently. The inception of the Green Power Market Development Group is likely to alter this
An initiative by the Confederation of Indian Industry (CII), World Resources Institute (WRI) and supported by Shakti Sustainable Energy Foundation, the Green Power Market Development Group – India (GPMDG) aims to create a demand for renewable energy among corporates, help companies in meeting their renewable energy purchase obligations, make them sustainable in the long term and scale up India’s green energy market. This it intends to achieve by devising innovative approaches which will rapidly increase the share of renewable energy in the overall energy consumption of commercial and industrial establishments.
According to R. Ravi Chander, senior counsellor, renewable energy, CII, “The GPMDG initiative aims to bring together the leading suppliers of renewable energy and large energy consumers who are willing to buy green power to a common platform to identify and address the barriers through the creation of an industry task force/steering committee.”
The goals will be accomplished by addressing the policy and market barriers that currently impede the growth of renewable energy (RE). Additionally, the move intends to bring together the leading suppliers of renewable energy and large energy consumers (both groups referred to as member companies) who are willing to buy green power to a common platform to identify and address the barriers. The GPMDG will work closely with the government and other relevant institutions to help member companies set and achieve their renewable energy targets. It will interact with decision makers in regulatory bodies and government agencies to discuss these concerns and solutions. Also, it will meet at least thrice annually and learn from CII, WRI, other participants and guest experts about RE markets, technologies, products, economics, incentives and providers.
Welcoming the initiative, B.K. Chaturvedi, Member, Planning Commission, said, “India has experienced significant economic growth in recent times. Yet, the fact remains that its growth is constrained by energy supply and availability. The country has a huge potential in renewable energy, which, if realised even in part, would go a long way in cementing energy security.”
Concurring, Jamshyd N Godrej, Chairman, CII–Godrej Green Business Council, added that the “portfolio of opportunities” in renewable energy is very large. To improve energy access across the country, he stressed on how off grid options could be explored, more so with regard to solar power.
Highlighting the need to focus on clean energy and energy efficiency across sectors, Krishan Dhawan, CEO, Shakti Sustainable Energy Foundation, hoped that the effort to create awareness and commitment among industry would also create a demand for green power.
Initially, the concept was initiated in the United States and many large companies aimed at over 1,000 MW of generation capacity in the clean energy sector. The move resulted in benefits such as better pricing than what the companies could get by themselves. It provided support for new renewable energy projects and the market. It also provided a platform for companies to engage effectively on policy. When the buyers group models were replicated in the European Union (EU), another 15 companies supported over 200 MW of renewable energy, such as wind, solar and biomass.
Tara Parthasarthy, principal associate of the World Resources Institute, explains, “It was in the year 2000 that this idea was mooted in the US. The aim was to see how we could increase private investment in the renewable energy sector and thereby increase the green power market. There were around 15 companies and they would generate around 1,000 MW of green power in 10 years. It was a large goal, but they managed to achieve the figure early. Also, there was the instance of third party finance wherein the first ever solar PPA was signed between Sun Edison and Staples. The idea was to help companies make the investment. A collaborative solar mechanism was also tested in California.”
In India, the overwhelming response from corporate buyers and green power developers in Karnataka prompted CII and WRI to launch the Green Power Market Development Group as a nation-wide programme.
“The kind of work done in the US and EU drew attention and we thought we would try this out in India too,” says Parthasarathy. “In July 2012, we began talking to companies, mostly in Bangalore, and identified whether it would be useful to them. The companies, on their part, were unanimous and felt that this would work, not just for buyers, but also for sellers.”
The idea, she elaborates, is to get the companies together and talk, create an enabling environment of sharing and help them make informed decisions. “For instance, for a solar procurement project in Bangalore, we have been working with companies to find suppliers that meet their needs. We also facilitate interaction with regulators, since regulations can help or hinder green power procurement. They all come together on a single platform and since in India there has been no unified voice till now, it has been useful that way. We are also helping companies that are trying to test ideas as to how aggregated power can help companies procure renewable energy. We hope this has a huge impact, since we are working with the right companies so as to have an impact on renewable energy.”
For an organisation which joins the group, some of the benefits of the partnership are: accelerated learning about green power markets, technologies and products, opportunities to aggregate purchases and collaborate with peers to scale approaches that reduce costs, access to a network of corporate energy and environment managers experienced at pursuing green power opportunities and technical assistance in evaluating green power projects.
Ravi Chander adds that this programme, which has been designed for the corporate sector, will help them invest in renewable energy and procure clean and green power. “Being part of the GPDMG will commit certain percentage of their energy consumption to be met through green power. This will not only increase their brand image and reputation, but also enable their move towards a sustainable tomorrow. The initiative tries to address the challenges faced by buyers in procuring green power and strive hard to create an enabling market environment.”
According to S Chandrasekhar, Chairman, GPMDG – Karnataka State, and Managing Director, Bhoruka Power Corporation, the GPMDG aims to facilitate green energy procurement of 100 MW by Indian industry by 2017.
The initiative has widened the scope for renewable energy suppliers and technology providers through the Collaborative Rooftop Solar model and Green Power Procurement model. Under the Collaborative Rooftop Solar model, five potential buyers have committed to set up solar power plants at their rooftops. These are Bangalore International Exhibition Centre, Cognizant, Coca Cola, Infosys and Philips. The total aggregated rooftop solar capacity is 3.5 MW and developers such as Azure Power, Emmvee Solar, Kiran Energy and SunEdison have shown interest in the project. Under the Green Power procurement model, CII has facilitated discussion between ACC cement and Energon (IPP in the renewable energy sector) for procuring 54 MW of green power in Karnataka and Andhra Pradesh. Additionally, CII is in discussion with Coca Cola in engaging them with a few solar and wind energy developers.
Policy and Regulation
Policies and regulations can be the most important facilitators or barriers to green power procurement. Through the group, the companies can jointly articulate their needs to policymakers. “As an independent agency, we are able to provide analysis and data that is unbiased. GPMDG helps companies interact with utilities and regulators. WRI provides the analysis that can facilitate these conversations,” explains Parthasarathy.
Chander is positive that the move will help the Indian green energy market and enable buyers to access clean energy. “CII has achieved this in Karnataka through rigorous stakeholder consultation with industry and the government in the past one and a half years. The initiative also acts as a platform for knowledge transformation and helps in addressing the concerns of buyers and sellers.” A stakeholder consultation by CII revealed certain policy constraints affecting the purchase of green power. These included high cross subsidy surcharge and open access charges as also non-enforcement of the renewable power obligation of state-owned utilities.
Industry insiders believe that a stable policy will surely help matters. “The government must ensure policy stability over a 10 to 15 year period so that financing options improve. Corporates need to be become part of the solution,” says Rohan Parikh, Head, Green Initiatives, Infosys.