Mukesh Ambani bullish about renewable energy industry in India

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Solar energy will be the focus of Reliance Industries as the company shifts from fossil fuels to alternate source of energy in the coming years, said Mukesh Ambani in an interview with CNN-IBN.Ambani’s interest in the renewable energy resources will give a boost to the energy sector in India, especially the small and medium businesses engaged in the development, installation and services for the renewable energy sector in the country. More partnerships are on cards as many leading solar/wind/tidal technology developers are parked abroad and not in India.Ambani has plans to transit from “hydrocarbon presence which is coal, oil and natural gas over the next many decades into a fully renewable, sustainable future.” Reliance will focus more on solar energy, however. According to Ambani, solar power will become price competitive as compared with power generated from fossil fuel.

Mukesh Ambani bullish about renewable energy industry in India

Reliance has already established its presence in rural solar energy market by offering solar lighting and PV products for residential and industrial customers.  Reliance Solar has installed and implemented a large electrification program to provide lighting for over 14,000 households in Maharashtra.

Ambani is inspired by the developments in the U.S that is fast moving toward self reliance on energy using renewable energy.

“There has been a fundamental transformation in the energy scene in the US. For many decades, we have heard that the US will be independent of foreign imports of energy. Realistically, I can now tell you that this is my judgment that this will happen in the next 5 or 7 years,” he said.

Apart from solar, Reliance has also been focusing on shale and natural gas. Reliance itself has invested $5.2 billion in the shale business in the US and has set up joint ventures with Chevron, Pioneer Natural Resources and Carrizo Oil & Gas and a midstream joint venture with Pioneer.

While India has seen several initiatives from Central and state governments to boost renewable energy investments, lack of clarity and delay in policy enforcements have created a sense of ambiguity in the industry and hindered the success of these projects.

Suchitra Sriram, program manager, Frost & Sullivan, recently revealed to Greentech Lead that wind energy investments reduced in India during 2012, for the first time over the last 20 years. According to Sriram, wind energy industry in India is severely affected by lack of government policies and other issues such as poor grid connectivity and lack of financials for the providers, Sriram said.

The lackadaisical attitude of Indian legislators has been a deterrent to the development of the sector. Investors are hesitant because the changing political scenario and lack of clarity on policies could backlash the entire process.

Frost & Sullivan analyst says ambiguity in the government’s generation based incentive (GBI) scheme and other issues such as poor grid connectivity, high interest rate, and weak financials of state-government owned power distribution companies are the top reasons for lack of interest for investment in the sector.

Further the delay in government’s announcement on the GBI framework had slowed down the industry in 2012, according to Frost & Sullivan.

Reliance’s focus on renewable energy is certainly good news for India, which is struggling to cope up with the rising energy demands due to population growth and urbanization.

Rajani Baburajan

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