In a report released The Indian government is rolling out “big bang” clean energy policies and reforms including the green hydrogen and green ammonia policy, production-linked incentive schemes in solar module and battery manufacturing, market based economic dispatch, general network access, green energy corridor schemes and privatisation of state-owned assets across distribution, generation, and transmission. Key trends among large power sector companies include diversifying across the value chain, leapfrogging the competition to adopt zero-emissions technologies, and value-added products and services such as peak power supply, round-the-clock supply and corporate decarbonisation solutions. Boosting clean energy investments requires clarity and integrity on the policy front and the availability of cost-effective, long-term financing for infrastructure.
The United Nations climate science body, the Intergovernmental Panel on Climate Change (IPCC), released its Working Group III report with a grave warning for the world. Unless there are immediate and deep emissions reductions across all sectors, 1.5°C is beyond reach. As one of the fastest-growing large economies, India has an important role in helping put the world on track to meet climate goals.
On the green hydrogen front, energy companies are betting on the rapid decline in production costs to exploit its use in energy storage, mobility, fertilisers, refining and industry while also foraying into the manufacturing of electrolysers, used to produce green hydrogen from renewable energy. Reliance Industries and Adani Group aim to produce green hydrogen at or below the cost of its fossil fuel counterpart. In energy storage, industry players are aiming to transform renewable energy from exceptionally low cost but intermittent sources to dispatchable and controllable energy. Companies such as JSW Energy and Greenko are betting big on pumped hydro storage with several development plans.
To diversify upstream in the solar value chain and build domestic supply chain security, players have participated wholeheartedly in the government’s solar module PLI scheme while also acquiring stakes in state discom businesses, integrating the last link of the power sector value chain. Tata Power has achieved impressive results in its Delhi discom over the last decade, expects similar results from its recently acquired Odisha discom, and also has current and pipeline module manufacturing capacities.
In transmission, operators such as IndiGrid InvIT (infrastructure investment trust) and Adani Transmission have been vying for both greenfield and brownfield assets as government agencies look to evacuate the large renewables generation capacity planned for the country. As the power markets become more democratised and integrated, companies see opportunities in power trading through exchanges and contracting with customers through open access and merchant capacities.
Several industry players have diversified from commoditised electricity generation, distribution and transmission to providing value added products such as peak power supply, round-the-clock supply and corporate decarbonisation solutions, which fetch higher margins and offer growth prospects in a fast-evolving energy economy.