May 22, 2020
NTPC and ONGC will jointly establish various renewable energy projects in India and overseas
The partnership will encourage investment in sustainability, energy storage, E-mobility, and more
India is en route to setting up 500 GW of total renewable energy generation capacity by 2030
Over US$5.2 billion has been invested in India’s grid-connected renewable energy projects
National Thermal Power Corporation (NTPC), under the Ministry of Power, and Oil and Natural Gas Corporation (ONGC), under the Ministry of Petroleum & Natural Gas, have signed a Memorandum of Understanding (MoU) to set up a renewable energy joint venture, enabling both companies to play larger roles in India’s growing energy market.
According to a Ministry of Power release, the two Public Sector Undertakings (PSUs) agreed on May 22 to work together in establishing various renewable energy projects in India and overseas. The partnership is set to bolster India’s capabilities in fields of sustainability, energy storage, E-mobility, and other viable investment opportunities within Environmental, Social, and Governance (ESG) compliant projects.
In 2019-20, Indian successfully increased its renewable energy capacity by 7.6 GW with a further increase of 34.2 GW in various stages of implementation, according to the Ministry of New and Renewable Energy. Currently ahead of targets to set up an additional renewable energy capacity of 175 GW by 2022, India is in pursuit of setting up 500 GW of renewable energy generation capacity by 2030. Renewable energy is pivotal to rapid urbanisation and industrialisation in India and will contribute to strong economic growth in the country over the next 5 years.
NTPC presently has 920 MW of installed renewable power projects in its portfolio and about 23 GW of RE projects under construction. With this tie-up, NTPC would accelerate its RE capacity addition program and also expand its footprint in offshore wind and overseas Renewable Energy projects. This will help India’s largest power generator achieve its ambitious target of 32 GW of Renewable Energy Projects by 2032.
ONGC has a renewable portfolio of 176 MW comprising 153 MW wind power and 23 MW of solar. This development will enhance the presence of ONGC in the Renewable Power business and enable its ambition to add 10 GW of renewable power to its portfolio by 2040.
Among the new capacity additions, most of India’s grid-connected renewable energy projects are being implemented by private sector developers, having invested over US$5.2 billion, as of December 2019. To boost investment in the space, India has allowed FDI of up to 100 per cent under the automatic route and bolstered Power Purchase Agreements (PPAs) to ensure timely payments to power generators.
The Government is also setting up Ultra Mega Renewable Energy Parks (UMREPs) to provide land and transmission on a plug and play basis to investors. Additionally, the Government has been encouraging indigenous manufacturing of renewable energy equipment and products with favourable policies and financial incentives, to facilitate an end-to-end renewable energy industry.