CEO roundtable on the theme “Financing renewable energy projects, current experience, challenges and roadmap for the future” was organized as part of the 3rd Renewable Energy India Expo 2009. The roundtable saw participation from senior leaders from the industry and was moderated by Mr Kuljeet Singh, Partner, Ernst & Young.
Mr. Singh set the tone of the discussion by highlighting the key drivers and challenges faced by different segments of the renewable energy space viz wind, solar, etc. As per him, the key drivers for solar industry are favorable geographical location of India and government initiatives taken in the recent years. But the industry faces certain challenges such as high capital costs, slow commercialization of technology, high dependence on imported raw material and requirement of large tracts of land.
The first point of discussion, as is the question always with the industry, was the limited usage of solar energy. Though the use of renewable energy in India has increased significantly in the past, grid connected power has been dominated by wind. Solar energy has not been used there. As an answer to this Mr Arun Seth, ACME said, “We need certainty for this to happen – certainty in the revenue stream.” As per him him there is access to people and technology, but financing is not available. Solar sector needs to be provided priority sector lending and that too for long term so that it would bring certainty in the revenue stream, which investors are looking for. Mr. K. Subramanya, CEO, TataBP Solar added, “16% return is guaranteed to the convention energy power producers, so why cant it be done for solar as well.” As per Mr. Rabindra Satpathy, President, Reliance Industries, something on lines of infrastructure bonds for this sector could be a good option to get low cost long term finance.
Thus lack of appropriate financing structure was felt as the main issue in attracting investment in the sector. As per Mr Craig O’Connor, Director Exim Bank, though state schemes for generation based incentives are bankable, depending on the state, it is better to have long term PPAs. This will allow the project to get lower interest rate. A time frame of 20-25 years for the PPA is what he sees is required.
The other often asked question for this sector is the time to achieve grid parity. To this Mr. Singh also added that participants should also mention the technology that they think will help in this.
As per Dr. Rajeewa Arya, CEO, Moserbaer PV, “Solar is application based and each technology is suitable as per conditions. So the premise of one winner is wrong.” As regards grid parity, he sees the costs reducing throughout the value chain by about 2020. As per Mr. Hari Surapaneni, President and CEO, Solar Semiconductor, grid parity has already been achieved at peak power rate and a price of 10-12 cents may be seen by 2011. The same view is reiterated by Mr. Seth, as per whom, we would achieve parity within 2-3 years if subsidy from conventional energy is removed at various points.
The participants in the roundtable were:
Anchor: Mr Kuljeet Singh, Partner, Ernst & Young.
Particpants:
• Mr K. Subramnaya, CEO, Tata BP Solar Idnia Ltd.
• Mr. Rabindra Satpathy, President, Reliance Industries
• Dr. Rajeewa Arya, CEO, Moserbaer PV Limited.
• Mr. Arun Seth, ACME TelePower Ltd.
• Mr. Mark Ginsberg, Sr Executive Board Member, US Department of Energy USA – Energy Efficiency
• Mr Craig O’Connor, Director, Exim Bank
• Mr. Hari Surapaneni, Presidnet and CEO, Solar Semiconductor
• Mr. Sarvesh Kumar, Deputy Managing Dircetor, RRB
• Mr. Harish Mehta, Director, Suzlon Energy Ltd
• Mr. Rajindra Valsalan, Managing Director, WinWinD Power Energy P Ltd
• Mr. Pranav Nahar, Managing Director, Evolutions Markets India.
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