The ministry of new and renewable energy (MNRE) is considering a proposal to set up a company for generating power from renewable sources. The government is expected to be a 100% owner of the proposed firm and it will tap solar, geothermal, wind, biofuel and biomass sources for power generation.
This will be the first PSU generating power from renewable sources. So far, public sector companies National Thermal Power Corp (NTPC) and National Hydro Power Corp (NHPC) are primarily engaged into coal and hydel power generation, respectively.
“The ministry is examining the possibility of setting up a PSU in the renewable energy sector. There are public sector companies such as NTPC and NHPC that are stepping on to renewable power generation. We, therefore, would like to evaluate the proposal,” MNRE secretary Deepak Gupta told ET.
The idea behind the proposal is to have a dedicated power generation firm directly under the central government to tap renewable energy sources. MNRE has promoted a company, Indian Renewable Energy Development Agency (Ireda), that focuses on funding renewable energy initiatives.
The Standing Committee on Energy and Committee on Public Undertaking has endorsed the proposal. “It suggested that a separate PSU would bring more focus to the capital-intensive renewable sector and support the industry in a big way. A PSU would act as a catalyst and provide leadership role in exploring renewable energy sources and set up power plants,” an official in the government, who didn’t wish to be named, said.
“”Renewable energy is definitely a focus area for the government as the country needs to tackle climate change while placing a greater emphasis on continued economic growth. As we have set no target for the reduction on greenhouse gas emissions, we must reduce reliance on fossil fuels and rather use renewable energy sources for generating power and other economic activities,”” he said.
However, the government is being cautious as the cost of renewable power generation is a major issue in India. “One has to keep in mind that power generated from renewable sources is costly in comparison to the power generated by PSUs in other sectors. Also, till now, it has been pushed through private investment. A proposal to put in public money in such an affair has to be examined before we step into it,” he added.
The gross installed capacity of grid-interactive renewable power in the country is estimated at 11,273 mw, which accounts for 8% of the total installed generation capacity in the country. While total power capacity is estimated at 2,00,000 mw by the end of the 11th Plan, the government has set a target of 24,000 mw to come from renewable energy.