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RENEWABLE ENERGY – POSSIBILITIES UNLIMITED

Financial Express 2009-08-14
"India will offer the largest solar program in the world"

Astonfield Renewable Resources Ltd. aspires to solve the growing energy needs of rapidly developing regions such as the Indian subcontinent, the Middle East and Africa on a foundation of clean, locally sourced and readily available energy. Astonfield is the only pure play multi-modality renewable energy company focused on the Indian sub-continent with proven technology solutions for solar, biomass and municipal solid waste-to-energy based power.

To-date Astonfield has a multi-modality pipeline of over 600 mw in development in India. Solar PV projects make up more than half of this pipeline, with 228 mw of MOU/allocations, and clarity on an additional 250 mw of contracts. Astonfield has secured government concessions to build, own and operate renewable energy power plants totaling 338 mw of capacity.

India has tremendous potential for successful utility scale renewable energy executions in multiple modalities. from the abundance of sun for solar plants to the quality of municipal waste for waste-to-energy projects, India has a portfolio of natural resources that provide infinite opportunities to capitalize on renewable energy. Aside from the abundance of natural resources that will easily support utility-scale renewable energy implementations, there is a massive need for electricity in India that Astonfield cannot ignore. "I was born and raised in India, and my childhood home (where my mother still lives) suffers through an average of 6-9 hours of load shedding a day. But think God my home is electrified at all," says Sourabh Sen, co-chairman, Astonfield Renewable Resources, Over 400 million Indians have no access to electricity – that is more than the total population of the US with no power.

Once the company realized the magnitude of the need for electricity, Astonfield began its quest to do its part to electrify India using clean, carbon-free technology, and today it is a frontrunner in the renewable energy space. The team has over 100 years combined experience in building power plants in India, and it has spent the past three years working diligently with the local and central leadership on viable renewable energy policy. currently the company has over 600 mw in development, and that number is increasing on weekly basis. It has active business development teams in 14 different states, and is even looking into expanding its technology base to include small hydro and off shore wind implementations.

The first project slated to come online will be a 5 mw project based in Bankura, West Bengal, Nationally the company has signed MoUs to set up a 200 mw solar power project in Gujarat of which 25 mw has been allocated; a 100 mw biomass project in Bihar, a 3 mw solar project in Haryana, a 5 mw solar project in Rajasthan, a 10 mw biomass project in West Bengal, a 10 mw solar project in West Bengal and a 10 mw solar project in Karnataka.

The total investment to implement this portfolio is over $2 billion, and the investment figures are growing as the pipeline grows. in addition to the monetary investment. Astonfield power plants will also create thousands of jobs.

Sen and Ameet Shah have put a substantial amount of their own money into financing Astonofield’s projects, and they have also put together a solid group of banks and financial institutions that believe in the renewable energy potential in India and are backing the pipeline financially. Also, AREVA has recently signed on to be the company’s technical partner for executing the first 100 mw of biomass power plants across India, and will also take a 40% equity stake in these projects.

The possibilities are vast for renewable energy in India, and thanks to the efforts of the central and local leadership over the past few years, positive strides have been made to create a viable market place for clean energy implementations to thrive. the creation of the National Action Plan on Climate Change and the imminent release of a National Solar Plan is creating the momentum needed for developers like Astonfield to push utility-scale renewable energy to the implementation stage.

The last and most important step for the renewable energy industry in India is the development of proper tariff frameworks by the central and state governments. There is so much back and forth about renewable energy, especially solar, being too expensive. But the way Astonfield sees it, it is more costly and detrimental to spend any more time debating over a few rupees difference in the cost of renewable energy vs. conventional, highly polluting energy. India has 400 million people without electricity. Asthma and respiratory disorders due to polluted air is a huge health problem. And conventional energy is also heavily subsidized. not to mention the cost of coat and oil is steadily increasing and the cost of solar is steadily decreasing. On top of all of this, the government has the budget for a proper tariff framework. From 2002-2007, the renewable energy ministry sent back anywhere from 44-76% of its budget, which was unused.

And while the debate charges on about the cost of renewable energy, industry estimates indicate that in 2008-2009 India Inc lost a total of Rs. 43,000 crore in revenue due to non-supply of power. When the cost of solar is expected to hit grid parity as early as 2013, there is no credible argument for why we cannot put a proper solar tariff into place now. what is more important, providing electricity to 400 million people, or waiting a few years for the cost of solar to come down a few more rupees / kWh?

The bottom-line is renewable energy is a win-in for India. The health and wealth of the nation will be immeasurably benefited by an aggressive rollout of green energy projects. to support the growth of our nation, we have to provide power to the upward of 40% of the populous that in without energy.

Astonfield has been on the ground promoting the renewable energy story in India for the past three years. When it started there were very few renewable energy believers in India, and there was little to no discussions about utility-scale renewable energy implementations. Today Astonfield has over 600 mw in development, which is the largest pipeline in India. Astonfield’s goal is to continue to be a leader in the renewable energy sector in India. to build clean power plants using the best technology available today, to help electrify India.

Business prospects are good. India is on the forefront of the world’s stage when it comes to renewable energy. The power deficit in this country is huge. currently 10,000 mw. This deficit is expected to grow to 25,000 mw by 2012. Per capita energy consumption is expected to grow from 580 kWh to 1000 kWh over the next five years. So India has a large energy deficit on its hands that is projected to more than double in the next two years. Compounding the issue is the international pressure to keep carbon emissions low.

The best and fastest path to solve India’s energy deficit is green energy. The industrialist, the engineers, the government, officials, and the financial institutions all recognize this fact, and are ready to promote, design, facilitate, and finance the growth of this industry.

Astonfield believes that India will offer the largest solar program in the world within a matter of months. In fact, Astonfield has been working actively with the State and Central institutions on providing them extensive analysis from a developer’s perspective on creating policy constructs that would lead to a successful program. It’s quite amazing to see the geometric growth of the solar industry in India.

In January 2008, the government of India began an exploratory 50 mw Grid Connected Solar Energy Program that kicked off the race. In January of 2009, the government of Gujarat announced their independent program for 500 mw and now, we expect the Central Government to announce a program in excess of several thousand MWs in a matter of months.

The solar race is definitely on the India and those states such as Rajasthan, Gujarat, West Bengal and Haryana who have already adopted feed in tariffs stand to benefit sooner than those that are unable to mobilize their regulatory framework to promote solar energy.

India could see 500 mw of additional capacity of solar energy being commissioned on an annual basis as early as 24-36 months from now, provided that policy frame work were robust and conducive to private sector investment. India is at the beginning of a significant point of inflexion in solar energy. Progressive policy makers will benefit by yielding first mover advantages and bringing additional investment to their states as more upstream facilities get developed and generate employment amongst other things.

Ameet Shah and Sen recently met Dr. Farooq Abdullah, Union Minister of New and Renewable Energy, who has deep understanding and vision for developing strong policy that will allow the renewable energy sector to flourish in India.