The power sector is critical to keep the energy flowing during the financial disruption in time of coronavirus pandemic. Renewables have played an integral role in the last decade in India’s power capacity addition.
In this Covid-19 crisis, companies have been taking extreme measures to control expenditures. One of the avenues is to reduce electricity cost. Many C&I (Commercial & Industrial) companies spend 15 to 30% of their total expenses towards electricity cost.
It is a common practice for companies to source electricity from sources including thermal power through DISCOMs, OA (open access), onsite captive generation and energy exchanges. Lately, by going with renewable power, companies are able to reduce their electricity cost by 25 to 40% and at the same time are able to meet their sustainability goals.
There is a growth in number of first-time corporate clean energy buyers in India. Initially, in renewables, corporates started sourcing wind power, then solar rooftops gained traction and now solar power through OA has become attractive.
Global scenario: Globally, as per BloombergNEF, corporate PPA (Power Purchase Agreement) market has grown to 52.2 GW till 2019. Out of this 39 GW of Corporate PPAs have been installed from 2017 to 2019. This includes 2.7 GW by Google, 1.1 GW by Facebook, 0.9 GW by Amazon, 0.8 GW by Microsoft and 575 MW by ExxonMobil.
Indian Corporate PPA market: Currently, OA corporate PPA market is active in several states like Karnataka, Uttar Pradesh, Tamil Nadu, Maharashtra and Gujarat. Haryana, Madhya Pradesh and Rajasthan are the next set of states to look for.
India presents a large opportunity in the next 3 to 5 years for platforms focusing on C&I segment. This financial year, inspite of coronavirus outbreak, still there is a good potential to add around 1 GW of Corporate PPA projects in India.