Two policy measures in the last month, the first by the Centre, hesitant, yet calibrated, and the second by Gujarat, bold and ground-breaking, indicate that the tide is changing in the struggling power sector. The Centre’s Integrated Energy Policy (IEP) is significant, for it seeks a gentle shift to a market system by freeing primary energy sources from the trap of administrative controls, subsidies and pricing. A regime that pivots on optimal choice of fuels and technologies, based on sound economics, is expected to emerge.
...Even as the Centre is taking measured steps by way of the IEP and a national solar mission that is being tweaked at the Prime Minister’s Office (PMO), Gujarat’s Chief Minister Narendra Modi, the man in a hurry, has pre-empted the latter. On January 6, he announced a radical solar power policy for Gujarat, setting a target of 500 MW of solar power generation. Even the Ministry of New and Renewable Energy (MNRE)’s recent generation-based incentives for solar power, with a country cap of 50 MW, pales before the Gujarat initiative.
In one stroke, Modi has put his state in the same league as Spain, which passed a new solar energy law in September 2008, with a 500 MW cap. Spain saw frenetic growth of 300% in new installed photovoltaic (PV) capacity (See FAQ on page 64) in 2007, under an earlier law. Modi is already finding takers for his initiative. Acme TelePower, a Gurgaon-based energy company, signed up for a 110 MW plant costing Rs 1,320 crore in Gujarat on January 12. "We are looking at a generation target of 1,000 MW in the next five years," says N Venkataraman, Executive Vice-President, Energy Solutions.
Arun Natarajan is the Founder & CEO of Venture Intelligence, the leading provider of information and networking services to the private equity and venture capital ecosystem in India. View free samples of Venture Intelligence newsletters and reports. Email the author at firstname.lastname@example.org