24-Jan-2022 | Market Research Store
India's aim to significantly decrease carbon emissions, along with the growing worldwide anti-hydrocarbon attitude, is driving public sector energy companies to rapidly develop their renewable energy capacities.
Bharat Petroleum Corporation Ltd. has set aside Rupees 25,000 crore to expand its renewable energy capacity by 2040. The company's present RE capacity is 45 MW, but it plans to increase it to 10 GW in the future.
BPCL's move comes almost a month after ONGC and the Solar Energy Corporation of India (SECI) inked a Memorandum of Understanding to develop renewable energy and social, environmental, and governance initiatives. Even as it intends to concentrate on its core exploration and production capabilities, the global energy holding firm is aiming for a least of 10 GW of renewable electricity by 2040.
"In India, the private sector had already taken a lead, but it is time that the public sector also lends a hand given the large size of unmitigated emissions with them. It is natural for the petroleum sector to get into verticals like green hydrogen and wind and solar. It is also looking at blending petroleum fuels with ethanol," explained Jigar Shah, CEO at merchant bank Maybank Kim Eng Securities India.
Signatory nations to the 2015 Paris Agreement pledged to reduce their emissions to keep global temperatures from rising more than 1.5 degrees Celsius by 2050. Since then, large projects in coal and oil-based industries and transportation have been launched.
"Given the prime minister's commitment for India to achieve net-zero emissions by 2070, companies that have oil or coal as their base are moving towards green energy over time. What that essentially means is you are getting future-ready," opined research analyst Abhineet Anand at Mumbai-headquartered research firm, Emkay Global Financial Services.
According to the Department of New and Renewable Energy, by 2030, the government expects to have installed 450 GW of renewable energy capacity.
Keeping stranded assets at bay
At its annual general meeting in September 2021, the nation's biggest energy giant, NTPC Ltd, raised its renewable energy objective for 2030 from 30 GW to 60 GW.
According to Kim Eng's Shah, an energy business like NTPC should create electricity in a 50:50 coal-to-renewable-energy ratio in order to achieve its capacity target of 60 GW in the future.
When it comes to established solar capacity, Chennai-based Neyveli Lignite Corp India is already one of the leaders in the coal business. The business signed a joint venture deal with Coal India Ltd. in 2020 to create 5 GW of thermal and solar power facilities.
Another development is that state-owned hydropower operator NHPC Ltd has reached a deal with Odisha's Green Energy Development Corporation of Odisha to create 500 MW floating solar energy plants across lakes in the eastern region.