After pledges early last month by India’s Minister of State for Power, Coal and New and Renewable Energy, Piyush Goyal, who pledged to forge India into a “renewable superpower,” momentum has increasingly picked up to follow the example already set in northeastern states (like Jammu & Kashmir) and especially eastern states (like Nagaland, on the Nepalese border), which currently boast more than half their installed electrical capacity as coming from renewables. This pledge follows up on earlier policy initiatives, like the Indian government’s early 2014 MOU, signed by the Indian ministries, as well as six key public-sector companies, to build a 4 GW solar farm, the largest on earth, near Jaipur, Rajasthan (north-central India). This project would tap into the country’s estimated 750 GW (Ministry of New & Renewable Energy, or MNRE) of solar potential, via a project that would be roughly ten times the size of any other solar project on the planet.
Hydro has also been a key vector and part of the Indian government’s $11B fund to shore up their ambitious goals to both serve electricity to a burgeoning population and increase renewable percentage of the overall installed capacity mix. From renovation and modernization of existing hydro capacity (as well as some thermal), to small-hydro installations aimed at rural locations or to support the overloaded national electrical grid, India has been moving hard to tap their massively underexploited hydro potential. The keynote emphasis on small-hydro executions, which have a lower environmental impact and are ideal for smaller communities, has been a consistent theme.
The rapid rate of both industrialization and urbanization in India, combined with a growing middle class, where rising per capita income is driving per capita electricity consumption at around a 5% CAGR over the past decade, paints a very bullish picture for long-term energy demand according to the Central Electricity Authority (CEA). The Planning Commissions Working Group on Power has even stipulated forward guidance of around an additional 76k MW of installed capacity in their 12th Plan (2016 to 2017), which is set to rise thereafter to 93k MW for their 13th Plan.
Poor quality of existing infrastructure, requiring electrical grid modernization, is a major driving force here. Both for overall spending and for a growing trend towards distributed capacity, where solutions like small-hydro and localized solar farms are seen as key to offsetting macroscopic grid vulnerabilities like those made clear to all during the 2012 blackouts that left 600M-plus without power for days. This is a heavy load to lift considering data points like peak electrical demand hitting 298GW by 2021 to 2022, according to CEA’s 17th Electric Power Survey of India. Shoring up the grid’s vulnerabilities while building up so much capacity is no modest goal for a country that already has the fifth largest generation capacity on earth, with around 4% of global generation capacity according to the Ministry of Power.
This is a target-rich environment for operators like Pan Global, Corp. (OTCQB: PGLO), whose mission, via their wholly-owned subsidiary, Pan Asia Infratech, Corp., is focused on building out global green energy capacity (as well as sustainable agriculture), with a particular emphasis on small-hydro and solar PV (photovoltaic) projects in India. The grid connection back in July this year of their 5.7MW small-hydro plant up in Uttarakhand, known as Project Badyar, is a prime example of the kinds of projects they are engaged in, and the staggered acquisition of the privately-held Indian corporation that commissioned the plant is a clear example of how judicious the company’s overall strategic approach is to the Indian market.
Rajasthan, with a landscape dominated by vast tracts of wastelands, most clearly seen in the sprawling 77k square mile Thar Desert, is a natural target for various forms of solar power projects, with PV being the easiest to execute, as even large farms can be set up in a bite-sized fashion. India’s MNRE has already approached the World Bank for $500M to help kick off the first 750 MW of their massive aforementioned 4 GW solar project near Sambhar Salt Lake in Rajasthan – and it now seems strikingly clear to most investors that the fuse is lit for an explosion of renewable build up in India.
Pan Global can read the proverbial tea leaves here and is moving to get out ahead of the solar curve with the development launch back in June of their Pan Solar Marketplace, a solar installation and services ecommerce marketplace website for India. The Pan Solar Marketplace’s initial focus on rooftop solar systems will be followed up by a shift to other services and the gigantic ground-based solar installation market that is forming.
In the country’s east and northeast, where there is abundant untapped hydro potential and many small rural villages, PGLO has a ready-made market with tremendous roll up potential over the coming years and the company is currently continuing to hammer out the due diligence on more acquisitions like Project Badyar.
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