Oil PSUs to set up new ventures for renewable power projects

IN A bid to boost renewable energy generation, PSU oil majors ONGC and Indian Oil Corp (IOC) will form new ventures to set up large solar and wind energy projects in the country and abroad. Oil and Natural Gas Corp (ONGC) along with Oil India Ltd (OIL), GAIL, Engineers India Ltd (EIL), Solar Energy Corp of India (SECI) and Indian Renewable Energy Development Agency (IREDA) will set up...

a special purpose vehicle to undertake larger electricity grid-connected projects. A second SPV led by IOC will look at setting up off-grid projects using advanced technologies.

These two SPVs will promote the deployment of technologies to supplement conventional fossil fuel based power generation that will give boost to the development of large scale grid connected renewable energy projects and implementing off-grid applications. The SPVs will be able to leverage the strength of oil and gas companies for promoting renewable energy projects. The SPVs would function independently like commercial organisations, while utilising various promotional schemes of MNRE and State Governments for the purpose, says a government press release.

EIL has been assigned the task of preparing the feasibility report for assessment of overall economics of the projects, development of business models based on expected returns, risk analysis etc for the two SPVs. The feasibility reports will be prepared within three months and the two SPVs will be incorporated immediately thereafter, based on the reports, the statement added.

In this regard, a Memorandum of Understanding (MoU) between ministry of new & renewable energy (MNRE) and ministry of petroleum & natural gas (MoP&NG) was signed recently by the secretaries in the two ministries Vivek Rae and Dr Satish Agnihotri, in the presence of the ministers, Dr Veerappa Moily, minister (MoPNG and MoEF) and Dr Farooq Abdullah, MoS (MNRE). The objective of the MoU is to enhance energy security along with clean energy development through investments in solar, wind and other renewable energy projects. The implementation of the MoUs will be monitored by a steering committee under the chairmanship of the secretary, ministry of petroleum & natural gas with secretary, MNRE as co-chairman.

The first SPV is for installation of large scale grid connected power generation plants based on renewable energy. ONGC will be the lead partner in this SPV, along with equity participation from OIL, GAIL and Engineers India Limited (EIL) and also the PSUs under MNRE viz Solar Energy Corporation of India (SECI) & Indian Renewable Energy Development Agency (IREDA). The second SPV is for setting up renewable energy off-grid projects using advanced technologies and market based business solutions for promoting access to the energy deficient population. IOC will be the lead partner in the second SPV, along with equity from Bharat Petroleum Corporation Limited (BPCL) and Hindustan Petroleum Corporation Limited (HPCL) and also represented by SECI and IREDA.