Solar Energy
Introduction
Adani Green Energy, a company that focuses on renewable energy from India, will build a large-scale PLTS with a capacity of 8 gigawatts.
The US$6 billion project will be carried out over the next five years. This plan was carried out after Adani won the world's largest solar energy tender last week.
Solar Energy Corporation of India (SECI), the government agency responsible for delivering a target of 100 gigawatts of solar power in India for 2022, selected Adani Green in a tender designed to give India's solar manufacturing sector a boost.
According to Wood Mackenzie, a consulting firm focused on energy and resources, India built about 9.5 gigawatts of new solar projects last year. India considers Adani Green's project a significant solar product manufacturing company for the overall market.
The company under the Adani Group will build an additional 2 gigawatts of domestic cell and module production capacity as part of a deal that will become operational in 2022. The first two gigawatts of the project will begin construction in 2022 with three additional 2 gigawatt chunks in each of the three years.
The Adani PLTS project will be built in several locations, one of which is the development of a single site collection with a capacity of 2 gigawatts connecting Al-Dhafra in Abu Dhabi, one of the largest solar power projects in the world.
A spokesperson for Adani Green told Greentech Media that the developer will finance each 2 gigawatt section to increase the finances of the project when construction begins. The company will then refinance once the plant is operational to lower capital costs.
Some projects have already had two to three years of development work. The price of the winning project is 2.92 rupees per kilowatt-hour.
Earlier this year, Total, a French energy company, took a 50 percent stake in Adani Green for US$510 million. Quoted from Greentech Media, Chairman of the Adani Group, Gautam Adani said that Total is very interested in expanding its partnership with Adani Green. Other foreign investors are also under consideration to partner with Adani. Adani took steps to partner with foreign investors as a way for the company's sustainable growth.
Rise Up Solar Projects in India
Despite the government's grand ambitions, India's solar market has been shaky in recent years.
The government's target of 175 gigawatts of renewable energy by 2022 is seen as unrealistic. At the end of 2019, according to Wood Mackenzie, India only had around 36 gigawatts of renewable energy.
India has failed to build a local solar panel manufacturing sector that can compete with China. In addition, there is also instability in the financial sector. When Indian tenders fell to very low levels, companies renegotiated some of the contracts at higher prices thereby reducing investor confidence. This all happened in India before the Covid-19 pandemic hit.
However, SECI's tender award to Adani Green saved the sector. For starters, the Indian government recently said it would inject 900 billion rupees of liquidity.
Will the solar manufacturing sector in India succeed?
Bidders in the 8 gigawatt tender must commit to building local Solar Panel production capacity. Adani's commitment to giving the country a sustained boost remains to be seen. According to Shrestha, Analyst of Wood Mackenzie, SECI has made several attempts to initiate domestic manufacturing processes through tenders but failed to attract sufficient investors. Nonetheless, Shrestha said the government had shown it was determined to build a local renewable energy supply chain.
The construction of this local renewable energy supply chain will open up job opportunities for people in India. Adani expects the project to create as many as 400,000 jobs.
Adani's tender win provides an advantage in increasing local solar energy production. According to Shrestha, logistics, utilities and materials bills are driving the costs of Indian modules higher than Chinese modules, so with this large capacity, they will be able to scale for more competitive pricing.
India has started to see the potential in the use of solar energy in the economic field. As a country traversed by the equator, Indonesia also has great potential for solar energy.
Social Plugin