ONGC to Establish Power Base in Renewable Energy Sector, with Wind and Solar PV Projects

---

Researched by Industrial Info Resources (Sugar Land, Texas)--India's state-owned Oil and Natural Gas Corporation Limited (BSE:500312) (ONGC) (New Delhi) is planning to diversify from its traditional oil and natural gas exploration and production projects by turning to the renewable energy sector.

According to Jitin Prasada, the Indian Minister of State for Petroleum and Natural Gas, ONGC is planning to invest up to $139 million to establish a wind energy project in Rajasthan, with a nominal generating capacity of 102 megawatts (MW). The windfarm will consist of 68 wind turbines, each with 1.5 MW capacity, and will be implemented during the next two years.

ONGC also has announced that it will consider setting up a 501-MW, grid-connected solar photovoltaic (PV) project with bases in Gujurat, Rajasthan and some of its own locations. Although no time schedule has been announced for this project, Jitin Prasada said that "it would be ONGC's endeavor to finalize the project at the earliest."

ONGC is by no means alone as it looks to diversify from its traditional power projects. The Indian government is pushing solar projects, and the establishment of the Jawaharlal Nehru National Solar Mission (JNNSM) in January this year has provided an impetus to major energy companies to develop solar power proposals.

The JNNSM has set an ambitious target of generating 20,000 MW of solar electricity by 2022. This is ambitious, considering that the installed grid-connected solar capacity was just 101 MW as of March this year, representing only 0.06% of India's total power generating capacity of 159,398 MW.

The incentives under the JNNSM initiative are attractive enough to entice major energy companies to invest in renewable energy projects. Utility-scale, grid-connected solar plant developers will be able to sign 25-year term power purchase agreements (PPA) with the state-owned thermal power company NTPC Limited (BSE:532555) (New Delhi). The Ministry of New and Renewable Energy also will supply a 30% subsidy and/or loans at 5% to approved projects.

Among the other companies looking at solar power projects are Tata Power Company Limited (BSE:500400) (Mumbai), which is developing a 3-MW, PV grid-connected plant at Mulshi in Maharashtra, and NTPC, which in March this year announced plans to explore solar power generation and add 301 MW of additional generating capacity through solar projects by March 2014.

NTPC will split the 301 MW between 111 MW of solar PV capacity and 190 MW through solar thermal projects. As a first step, NTPC is looking at a 15-MW solar thermal project at Anta in Rajasthan.

NTPC is also working with the Central Electricity Authority (New Delhi) and Bharat Heavy Electricals Limited (BSE:500103) (New Delhi) to explore the establishment of solar plants in remote and difficult areas for grid connection.

Industrial Info Resources (IIR) is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. IIR's quality-assurance philosophy, the Living Forward Reporting Principle™, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.