India needs $30 billion investment per year in the renewable sector: CEEW

India ideally needs $30 billion investment per year in the renewable sector, backed by a strong regulation to preserve contract sanctity, according to a research organisation.

“Today, we are averaging about $11 billion a year in renewable investments, we ideally should be getting $30 billion per year in India,” Arunabha Ghosh, chief executive officer of Council on Energy, Environment and Water, said.

He was speaking at Singapore International Energy Week where a series on energy conferences were concluded over the weekend. It was held between October 29 and November 1.

Enforce regulation, make transparent bidding process at tendering stage and preserve the sanctity of contract, Ghosh said, acknowledging that some sectors have done well in this area while others are not that up to the mark.

Once such a system is in place, India will attract international investments from leading pension funds, especially those in the US which according to their own constitution were restricted and allowed to commit to projects with high credit ratings.

He said the sanctity of contracts means the authority cannot change terms and conditions of the contract and if done so, the investor or project operator is compensated as per original contract.

He elaborated on the need to de-risk projects, calling for de-risking on currency fluctuations, policies and off-takers. “Once you achieve all of these, you will realize the cost will come down.”

He also highlighted the council’s study on financing of de-risked project, which showed that 60-75 per cent of the cost of tariff of electricity is the cost of finance. It is not the cost of solar panels or turbines.

Source: PTI

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