{"id":21926,"date":"2019-06-18T13:01:01","date_gmt":"2019-06-18T07:31:01","guid":{"rendered":"http:\/\/www.greenworldinvestor.com\/?p=21926"},"modified":"2019-06-18T13:01:01","modified_gmt":"2019-06-18T07:31:01","slug":"corporates-going-100-per-cent-renewable-now-a-reality","status":"publish","type":"post","link":"https:\/\/iiec-india.org\/greenworld\/2019\/06\/18\/corporates-going-100-per-cent-renewable-now-a-reality\/","title":{"rendered":"Corporates Going 100 Per Cent Renewable: Now A Reality"},"content":{"rendered":"

In 2018, a total of 13.4 GW of clean power<\/strong> was purchased by companies globally, according to Bloomberg New Energy Finance. This was a record amount of clean power sourced through PPAs, breaking the previous record set in 2017. Out of the total power purchased, the U.S. was the single largest market with 8.5 GW deployed<\/strong>, followed by India, whose corporate PPA market added 1.3 GW. <\/span><\/p>\n

One of the main reasons behind this rapid growth in the corporate renewable energy sector in India was sustainability. Over the last few years, clean energy has been favorably perceived by a large number of corporates<\/em>, and they have already begun making tangible progress in adopting the same. Irrespective of whether or not they are signatories of global movements such as RE100, major corporates across the country, are today aiming for increased dependence on renewable energy<\/strong>, ranging from 50%-100%. <\/span><\/p>\n

Furthermore, as corporates acknowledge that their demands for renewable energy will only increase with time, they have the potential to be important contributors in driving investment in renewable energy, and ultimately contribute to the global climate objectives. <\/span><\/p>\n

In addition to sustainability, economics has emerged as another key factor responsible for corporates transitioning to renewable energy. Taking into consideration that energy is among the top operating expenses for a large number of corporates, an increasing number of companies have now turned to clean energy, on account of its comparatively low cost. Depending on the location, renewable energy can be sourced at a 15% to 40% discount<\/em> <\/strong>to industrial grid tariffs in India. Reduction in the cost of renewable energy has made it competitive with thermal generation in many geographies, and in fact, the former has reached grid parity<\/strong> a year or two ago, not only in India but other countries as well. As a result, today, solar and wind projects are now bid at well below the average cost of coal power procured by the national power generator, National Thermal Power Corporation (NTPC).<\/span><\/p>\n

\"Community<\/a><\/p>\n

Solar, in particular, has emerged as a front-runner for the adoption of renewable energy in India, given that it is economical, scalable, and location-agnostic, across the country, and has captured the lion\u2019s share of corporate renewable procurement volumes.<\/span><\/p>\n

Also, read about\u00a0These 10 Largest Companies in the World Are Betting Big on Solar<\/a><\/strong><\/em><\/p>\n

In cases of large corporates, the adoption of solar energy can take place in two forms:<\/span><\/p>\n

Rooftop Solar Plants<\/a><\/b><\/p>\n

Here the solar capacity is deployed on-site, and supply and demand are managed through net metering<\/strong>. This has found favor among an increasing number of corporates, as a result of the introduction of the OPEX model, which has allowed them to enjoy the benefits of solar energy without any upfront investment, thus minimizing the risks involved. Under this model, the developer undertakes the installation and maintenance of the plant, and the corporate only have to pay per unit of consumption. <\/span><\/p>\n

In the case of rooftop solar plants, as power is generated and consumed at source, it still begs the question, what happens to power generated during weekends, or public holidays when it will not be used. This is where net metering has come into play, wherein it allows consumers to feed the surplus power to the grid, and in turn, receive credit on their electricity bill. As the rooftop solar power plant segment continues to grow, many states have created net metering policies, albeit, with arbitrary constraints and limits. In Tamil Nadu, for example, net metering is not allowed for HT consumers<\/em>, and in Maharashtra, there is an artificial capacity constraint of 1 MWp.<\/em><\/span><\/p>\n

However, given that a majority of corporates, who will adopt renewable energy through rooftop solar power plants,<\/strong> have large power consumption requirements, their available space rooftop might be limited. Hence, they cannot install large plants, thereby limiting their sustainability target to go 100% renewables. Even in the case of buildings with car parks on which solar power plants can be mounted, or glass facades which can be used, there will still not be enough solar power generated to meet the massive energy requirements of large corporations. Depending on a facility\u2019s size and power consumption, the rooftop can typically supply only 10%-15% of the demand of an industrial facility, and even lower values for a commercial building, hospital or data center.\u00a0\u00a0<\/span><\/p>\n

Private Solar Farms<\/b><\/p>\n

In order to meet the challenge of limited space, large scale grid connected open-access <\/span>solar farms<\/span><\/a> is a viable solution for corporates to go 100% solar. Under this model, an off-site project is set up and under the open access mechanism, the public grid is employed to wheel power to corporate buyers. Through this model, corporates can meet upwards of 50-80% of their facility\u2019s power consumption. Open access solar farms, however, is still dependent on state-wise open access charges and regulations. Karnataka stood out as the single largest market for open access renewables in 2018 due to the state\u2019s favorable solar policy, which was led by a complete waiver of grid charges for wheeling of power for 10 years. However, this has not been extended or replicated in any other state. <\/span><\/p>\n

Such regulation changes have led to a growing corporate interest in market-led \u2018group captive\u2019 projects. Under this model, they invest in a part of the equity required for the special purpose vehicle (SPV). Through the <\/span>group captive<\/span><\/a> model, corporates who do not wish to invest 100 percent of the equity, can enjoy the lowest landed cost of power, because it is exempted from particular grid charges and cross-subsidy surcharges. Taking this into consideration, customers can enjoy savings of close to 30% as compared to grid tariffs. While there have been risks associated with the group captive model, new amendments to the Electricity Act, clearly define Group Captive, and encourage the setup of projects which are fully compliant with the law. <\/span><\/p>\n

As seen, there are several business models making it feasible for corporates to meet their RE 100 targets<\/strong>. To cite an example, Adobe\u2019s Bengaluru campus is 100% power by solar<\/em>, purchased from Cleanmax Solar\u2019s private solar farm in Karnataka at 38.2% lesser unit cost than prevailing grid power tariffs and has saved approximately INR 10.9 million annually on their electricity bill.\u00a0<\/span><\/p>\n

In a country like India, which is blessed with abundant sunlight, it is easy to turn this into a valuable asset for corporations to choose the model which best suits them. Along with the growing interest in corporate sustainability, and MNCs becoming increasingly conscious about on energy efficiency<\/strong> and their carbon footprint and with a combination of sourcing solar and wind power in India, there is much scope for them to go cent percent renewable.<\/span><\/p>\n

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About the author: This article is written by Vikram Salvekar, who is passionate about clean and green energy.<\/em><\/p>\n<\/blockquote>\n","protected":false},"excerpt":{"rendered":"

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