Energy Giant Areva to Invest $3 Billion in India Solar Power

by Mridul Chadha

France-based energy company Areva (CEI.PA) is planning to invest $3 billion in India's rapidly growing solar power sector. The company plans to set up 1000 MW solar thermal power capacity in the next five to seven years. Areva already has a presence in the biomass sector with 60 MW installed capacity and launched a joint venture with Astonfield to increase the capacity to 100 MW. Apart from renewables, the company is also expected to gain significant share in India's nuclear energy market through the Indo-French nuclear deal signed last year. Areva is among several foreign companies looking to enter the Indian solar power market. This 'solar rush' is the result of the planned National Solar Mission (NSM) which aims at installing 20,000 MW of solar PV and solar thermal power generation capacity by 2022. With the current installed capacity of merely 12 MW (as of 30 June 2010) there is tremendous room for growth and foreign investors can tap the financial incentives being provided by the government to expand their presence in India. The planned 1000 MW solar thermal capacity will, however, not come under the National Solar Mission. The solar reflectors and other equipment to be used in the plants are likely to be sourced from outside India and as per policy regulations a solar plant is eligible for NSM financial incentives only if it uses Indian-made equipment. Nevertheless, Areva can take advantage of another policy initiative announced by the Indian government. Almost all the state governments have been obligated to procure a definite minimum percentage of their power demand from renewable energy-based power plants and solar energy-based power has a separate minimum quota as well. In case any state government fails to achieve the specified target it would be required to buy Renewable Energy Certificates from any renewable energy-based power producer. Thus the Areva-backed power plants can indirectly earn profits. There is also an acute shortage of skilled professionals in the solar energy sector in India. There are only a handful of companies providing consultancy services for providing engineering and logistical support for designing and setting up a solar energy plant. Areva is planning to launch such services as well. Entering the nascent solar energy sector in India is a highly intelligent move on part of the Areva management. In addition to the nuclear energy market which is comparatively difficult to enter and sustain operations in (due to stringent Indian laws), Areva is also looking to take full advantage of India's favorable solar energy policies by deploying its engineering and executional experience. Reprinted with permission from Earth & Industry

Post originale: http://featured.matternetwork.com/2010/11/energy-giant-areva-invest-3.cfm