In a bid to boost renewable energy generation, oil giants like ONGC and Indian Oil Corp will form new companies to set up large sized solar and wind energy projects in India 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 big electricity grid-connected projects.
A second SPV led by Indian Oil Corp (IOC) will look at setting up off-grid projects using advanced technologies. This SPV will include Bharat Petroleum Corp (BPCL), Hindustan Petroleum Corp Ltd (HPCL) besides SECI and IREDA.
A memorandum of understanding for setting up of the SPVs was signed by Oil Secretary Vivek Rae and New and Renewable Energy Secretary Satish Agnihotri here today.
Speaking on the occasion, Rae said the collaboration is aimed at leveraging the financial and managerial muscle of oil companies to scale up renewable energy projects as well as manage complexities of small projects.
New and Renewable Energy Minister Farooq Abdullah said vast potential for setting up large social projects exist in Laddakh, Rajasthan and Gujarat. Similarly, offshore wind farms are envisaged in 15 nautical miles.
Agnihotri said the government is looking at ultra mega projects of up to 500 MW at a cost of Rs 6-7 crore per MW.
Feasibility studies, which will be done by EIL, are targeted for completion in three months, Rae said adding the two SPVs are likely to be incorporated by August 15.
Two SPVs are proposed to be set up for promoting 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 would function independently like commercial organisations, while utilising various promotional schemes of MNRE and State Governments for the purpose," he said.
The first SPV, headed by ONGC, will be for installation of large scale grid connected power generation plants based on renewable energy.
The second SPV led by IOC would be for setting up renewable energy off-grid projects using advanced technologies and market based business solutions for promoting access to the energy deficient population.
"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," he said.
The feasibility reports will be prepared within three months and the two SPVs will be incorporated immediately thereafter, based on the feasibility reports.
Implementation of the MoUs will be monitored by a steering committee under the chairmanship of Oil Secretary, with Secretary, MNRE as Co-Chairman.