A recent report out from the European Photovoltaic (PV) Industry Association on the global PV market for 2014-2018 indicates the real, continuing strength of the market, with around 38.4GW of newly-installed PV rolled out last year (just under 140GW worldwide). The report clearly shows the hunger of growing Asian markets, with China taking the top slot in the space again at around 11.8GW of installed capacity and India rising fast, clocking in around 1,115 MW. India seems particularly attractive with high population densities and premium solar insolation metrics (total amount of solar radiation received by a given area) across the country, which dovetail perfectly with the Modi government’s increasing drive to move the country away from dependence on their pollutive and logistically/financially troubled coal industry, which currently represents approximately 59% of the country’s total installed capacity.
Power Minister Piyush Goyal indicated this week (Sept 11) that India’s government is preparing a rule which would mandate fossil fuel-based plant developers also install a percentage (5% was suggested) of renewable capacity as well, projecting upwards of $100B in investment in the next four years alone as the country moves to jack the renewable component of their overall electrical production footprint upwards of 12%. A figure which tracks well with the roughly $84B projected by leading business and market research shop, NOVONOUS, when it comes to the amount of investment required for India to hit their overarching 2022 target of around 72GW of installed renewable capacity.
The new rule by Modi’s government effectively opens up the market and takes some of the burden off India’s state power distributors. Goyal tasked the country’s biggest generator NTPC, as well as their biggest coal miner, Coal India Ltd. (already at a 10% requirement, with the solar credits market heating up as a result), to really get in there and lead the pack on this initiative. India’s Ministry of New and Renewable Energy (MNRE) also recently announced (Aug 8) a new scheme that will bolster the solar sector in the country mightily, with some 20GW of solar park capacity being opened up to developers now envisioned, over the next five years alone.
Hydro, particularly small-hydro, is a key, rising star amid India’s bold renewable energy aspirations according to the latest MarketReportsOnIndia.com analysis, which projects a bullish trend through 2025, emboldened by the firm backstop of World Bank guidance that they will only be helping to fund ecologically sustainable hydro projects in India. With a struggling coal sector and overloaded grid leading to recent, notable power outages across the country and World Bank estimates that some 79M households in India still have no basic access to power (much of that rural), the untapped market for small, localized hydro that is typically very easy on the environment and easier to deploy than larger solutions (especially in rough terrain), looks quite solid.
NOVONOUS projects that the untapped overall market for renewables in India is a staggering 2.16k GW, meaning there is still incredible growth potential in the country compared to more developed regional markets like China. India has huge hydro potential still and ranks around fifth globally in terms of exploitable hydropower according to Energy Alternatives India. Hydro is currently only about 21.5% of the overall renewables pie and India has earmarked at least 1.4k MW of overall targeted hydro growth for small-hydro specifically in their latest plan.
Ambitious players are moving to capture the upside on the growing global renewables market, especially in India and one of the more accessible companies in the space, P2 Solar (OTC: PTOS), has a strong lead, with two small-hydro projects in the northwestern state of Punjab. Punjab is right next to Jammu & Kashmir, which has been in the news recently for Modi dedicating three new hydro projects (240MW, 44MW and 45MW) and projecting that it will become the “energy state of the country,” despite the rough terrain of this region, nestled between the Himalayas and Kunlun mountain ranges.
P2 Solar, which cut its solar PV teeth with the successful implementation of a 53 KWp rooftop project on Canada Ticket Inc.’s warehouse rooftop in Langley, B.C. last year, has their Tibba and Rajgarh hydro projects in Punjab construction-ready. The company’s wholly-owned subsidiary in India even signed a 35-year Power Purchase Agreement (PPA) in June with the Punjab energy distribution company at around a $0.10 tariff, enabling a high rate of return and free cash flow according to PTOS’s estimates. The PPA sets PTOS up nicely to focus on reviewing construction bids and with a construction timeline currently in the works for shareholders, the company is now within striking distance of a major upswing as they select a lead contractor to build out their first hydro project in the country.
For more information on P2 Solar, visit: www.p2solar.com
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