Energy transition, a passage to India
For centuries, people throughout Europe were fascinated by the tales of explorers who had just returned from India: they daydreamed of wonderful gardens, trying to imagine the sound of the sitar or the fragrance of the lotus flower. In contrast, India today has all of contradictions of modern times, starting with difficult environmental conditions: according to the 2019 ranking compiled by the IQAir association, 21 out of the 30 most polluted cities in the world are located in India – including the top-scoring Ghaziabad, near Delhi.
An ambitious program
Such poor air quality is determined, in part, by an energy system that so far has not fully embraced sustainability. According to a report by the India Brand Equity Foundation, the country is the world’s third largest producer of electricity and, at the start of this year, 75% of its energy came from coal (source: the International Energy Agency - IEA). The rest is divided between other fossil fuels, nuclear and renewable sources. Furthermore, its energy needs are quickly rising due to demographic, economic and industrial growth: its demand for electricity could triple over the next 20 years. This is according to the IEA, which states, “India will be vital for the future of the global energy market.”
Given this prospect, the country has set out on an ambitious journey towards a more sustainable future. According to Bloomberg NEF, the percentage of energy from zero-emission sources will increase from 24% in 2019 to 43% in 2030, and the goal is to reach 67% by 2050. To reach this goal, the national energy program promoted by Prime Minister Narendra Modi foresees an increase in installed renewable power capacity, from the 86 GW recorded in late 2019 to 175 GW by 2022 and then to 450 GW, with an overall increment of 423% (IEA).
The program will be implemented also thanks to the stable political context and the increasingly competitive price of renewable sources, which are now cheaper than fossil fuels: in 2019 India was top of BNEF’s list of countries capable of attracting investment in clean energy.
Enel Green Power’s growth in India
India has an important ally in its journey towards sustainability. With its exceptionally strategic role, being one of the fastest growing large economies in the world, booming energy market and plentiful renewable sources, the country was naturally an ideal candidate for Enel Green Power’s investments in clean energy.
“From a social and economic development standpoint also, there is an opportunity to make a huge impact. - explains Sandy Khera, Country Manager and CEO Enel Green Power India - There are areas in the country which have little or no access to electricity and by providing power we can not only improve services, but bring in improvement in education, healthcare, create employment opportunities and truly create Shared Value which we always believe in by working with local communities and benefitting society at large. At Enel we have always believed that the real strength of shared value lies in its capacity to evolve over time and bring both profit and sustainability together on the same platform”.
We have been present in India since September 2015, when we acquired a majority stake in BLP – a company with three wind farms in the western states of Maharashtra and Gujarat, with a total capacity of 172 MW and a total annual production of 320 GWh; we finalized the acquisition of all shares in the company in September 2019.
Furthermore, between 2018 and 2019, we secured the rights for two other wind power stations in Gujarat, Coral (285 MW) and Dwarka (190 MW), which will become operational in 2021 and 2022 respectively. In both cases, we signed 25-years supply contracts with Indian energy company SECI.
But India is also a world-class technology titan. In April 2017, for example, EGP India launched a Centre of Excellence for Hub Services to supply added-value services to EGP subsidiaries in 18 countries, offering its technical advice at conditions that grant the Group remarkable savings.
The future is solar too
According to an ancient Hindu proverb, “There always are a thousand suns above the clouds.” Indeed, 2020 has been a year of diversification, with investments in solar energy adding to our endeavors in wind-powered plants. On 30 June, we were awarded the contract for a solar project with a peak capacity of 420 MW in the northwestern state of Rajasthan, which stands out for its high insolation. Construction will begin in 2021, and once the plant is fully operational it is expected to produce over 750 GWh a year. This project pushes EGP India past the symbolic 1GW total capacity threshold, of which 172 MW are in operation and 895 MW in the pipeline. This is a clear sign of our eagerness to consolidate and expand our presence in the Indian market.
Another important sign of this will is the agreement EGP signed in July 2020 with Norfund, the Norwegian private equity fund that invests in developing countries to foster the production of clean energy and, at the same time, spur economic growth and job creation. The goal is to fund, build and manage new renewable energy plants in India.
Many new business opportunities are thus opening for EGP in this part of the world, and this will enable us to contribute to the achievement of India’s clean energy goals. We are proud to be part of a transition that will gradually release the country’s beautiful landscapes from the clutch of polluted air.