India takes the global clean tech lead

6 Feb 2012

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India is now outpacing the rest of the globe in terms of its clean-tech investments, that’s according to a new report from Bloomberg New Energy Finance. And the reason for India’s clean-tech upsurge? It’s down to the improving cost competitiveness of wind and solar, says Bloomberg.

The report from Bloomberg New Energy Finance has revealed that clean energy investments in India hit US$10.3bn in 2011, a 52pc increase on the US$6.8bn invested in 2010. This was the highest-growth figure of any significant economy in the world, according to the report. And, in 2011, India also accounted for 4pc of global investment in clean energy.

Asset financing for utility-scale projects continue to be the main type of clean-energy investment in India, with US$9.5bn in 2011.

Bloomberg attests that the clean-tech upsurge has been propelled by a seven-fold increase in funding for grid-connected solar projects – from US$0.6bn in 2010 to US$4.2bn in 2011.

Solar almost reached the same level of investments as wind, which totalled US$4.6bn, according to the report.

‘Record year’ for India and clean tech

Ashish Sethia, head of India research at Bloomberg New Energy Finance, said there had been concerns at the start of the year that higher lending rates might have impacted investment. However, he said policy measures like the Jawaharlal Nehru National Solar Mission, and renewable energy’s increasing cost competitiveness, have made this a "record year" for India in terms of its clean-tech investment climate.

The Bloomberg report pointed to how venture capital and private equity investment also made a strong comeback in India, as $425m was invested in 2011, more than four times the 2010 figure.

Wind and solar project developers such as Mytrah Energy India and Kiran Energy Solar Power were successful in carrying out deals.

India’s wind sector added 2,827MW of capacity in 2011 compared with 2,140MW in 2010. This capacity placed India third in the global rankings for new wind energy installations, trailing behind China and the US.

And Bloomberg New Energy Finance is predicting that around 2,500MW to 3,200MW of wind capacity could be added in 2012.

Explained Sethia: "The surge in installation of renewable energy shows that it is becoming cost competitive and scalable, at a time when India is struggling to meet its targets for conventional power capacity."

He said that federal and state governments in India would have to ensure four elements if India’s renewables focus is to stay apace.

"First, that transmission lines are available for projects; second, that the grid can handle an increased flow of renewable energy; third, that renewable purchase obligations are enforced; and, fourth, that project developers are paid on time for the power they produce," said Sethia.

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Carmel was a long-time reporter with Siliconrepublic.com

editorial@siliconrepublic.com