Sourabh Sen, Co-Founder and Co-Chairman, Astonfield Renewables, in an interview with OneWorld South Asia, talks about how Indian leadership is expanding India’s investment in clean and sustainable power. Excerpts from the interview.
OneWorld South Asia: Astonfield has been contributing towards developing the renewable energy industry in India. How has it been?
Sourabh Sen: We have advanced significantly since we started as a company in 2006, and as an industry. As recently as 2010, there were fewer than 35 megawatts of solar power installed in the entire country. Today there is more than 1,800 megawatts with many more are on the way. By 2022, the national goal is to install 20,000 MW of solar power, but we can achieve more if we set and maintain the right policies to unlock solar’s true market potential.
Our contribution to the growth of renewable energy in India is not limited to how many megawatts we pump to the grid. From the beginning, we made it a priority to work closely with government officials to make sure the policies put in place are effective and achievable so as to create a self-sustaining solar market in India. Our input into advising and lobbying to shape renewable energy policy in India has been one of our significant contributions. An effective policy framework is required for the promotion of commercially viable plants.
The cost trends that have emerged in the solar industry over the last few years, together with the industry’s inherent flexibility, are enabling solar power’s manifold community benefits through lateral growth in other sectors of the local economy from electrification. These benefits, combined with smart government policies, will soon be realized on a massive scale.
Having crossed the 1,000 MW thresholds in 2012, the Indian solar market has experienced an important level of maturation. And right now the market has tremendous momentum. With this, the perceived risk by developers and financiers for implementing new solar power assets has been dramatically reduced, and this is extremely crucial because it opens the door to gain higher levels of investment.
OWSA: Climate change and impending paucity of conventional sources of energy are big twin problems faced by India. How do you think the renewable energy sector can help with these problems?
Sen: Increasing India’s renewable energy portfolio boosts our energy security. The more we rely on pollution-free sources like solar energy, lesser is our dependability on fossil fuel sources like coal, natural gas and diesel.
The scalability of solar is, perhaps, its most valuable characteristic as power generation can be tailored to fit demand. From a single photovoltaic panel supplying power to one, to a massive multi-megawatt array supplying power to factories and cities, solar capacity can quickly add up to significant numbers. Diesel generators are small and flexible, but they come with unsustainable financial and environmental costs. As India grows, sustainable energy sources like solar will be required to meet our energy demands.
The rising cost of energy from carbon-based sources, presents a golden opportunity for the renewable energy sector. To herald a new age of economic prosperity through increased electrification in rural areas and increased reliability of electricity in cities and towns across the country, renewable energy sources need to be tapped.
OWSA: Astonfield provides renewable energy solutions to many countries like India, Africa, and the Middle East. What are the challenges you face while working in these countries?
Sen: The initial steps were faced with multiple challenges. It takes time to develop relationships with the right stakeholders to ensure long-term success. Programmes and projects need to be developed thoughtfully in order to succeed. We are not a fly-by-night company. When we look at a new market, we arrive with the intention of being there for the long haul. This has been our r approach in India, Africa and Middle Eastern countries.
The ability to secure local, ‘non-recourse’ project financing is a major challenge. It has become a major differentiator among solar developers. Indian banks have been very conservative in lending. Astonfield was successful in securing rupee financing for a 5 MW project we built in Rajasthan and an 11.5 MW project in Gujarat. That financing came with a higher cost. However, as renewable energy installations accumulate performance data, and investors and financiers are able to see a solid track record their perceived risk becomes lower.
It is also extremely important that solar companies maintain world-class quality standards and work with partners with significant track records installing and operating solar projects. In July, Astonfield was the first company to receive an A- credit rating for a solar power plant in India from CRISIL, the ratings agency that is part of Standard and Poor’s. We received this rating because the plant represents a low risk profile with regard to return on investment.
OWSA: According to you how good is the state of solar energy in India and what can be done to promote the growth of solar development in country?
Sen: India is now in the top 6 countries of the world in terms of installed solar capacity. After years of unprecedented declines in the cost of solar, we are experiencing some price stability which makes it easier for investors to say yes to more projects because it improves the picture of a healthier return on investment. Support from central and state governments is a clear signal that India’s leaders are serious about expanding India’s investment in clean and sustainable power.
OWSA: How can the corporate sector help in bringing renewable energy to emerging markets and encourage countries to provide cost efficient technology solutions?
Sen: Emerging markets like India are blessed with an abundance of sunshine. This represents a great opportunity for large commercial and industrial corporates to invest in solar energy to power their operations directly. Corporates require 24/7 power and most have diesel generators as a backup, but fuel is getting more and more expensive. Solar is now cost competitive with diesel and can supplement or replace diesel generation for commercial and industrial operations.