• Thursday, March 28, 2024
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India direct government agencies to buy renewable energy

India direct government agencies to buy renewable energy, Nigeria can do same

In order to take advantage of the new renewable energy boom sweeping across the world, the Indian government has directed its  public sector companies to champion more investment in the off grid sector, a development Nigeria can learn

Unlike India, Nigeria is the biggest and most attractive off-grid opportunity in Africa, and one of the best locations in the world for minigrids and solar home systems, however issues surrounding cheaper financing, multiple taxation and access to forex still remain a challenge for private investors.

In India, the government is setting the pace for private investors as Department of Public Enterprises and Economic Affairs has directed public sector companies to increase investment in renewable energy.

The Indian government also directed its agencies to either sign power purchase agreements to buy renewable energy or set up power projects on their own. They have also been advised to set up solar cell and module manufacturing units.

This is not the first time that the Indian government has asked public sector companies to increase exposure to renewable energy. Leading agencies like India’s largest utility National Thermal Power Corporation(NTPC), Coal India, Airport Authority of India, NLC India, Indian Oil, Indian Railways and several others have taken several measures to set up utility-scale as well as small capacity solar and wind energy projects.

NTPC Limited, India’s largest power generation company has already announced plans to boost renewable energy capacity in the country by utilizing barren areas and wasteland along its border with Pakistan.

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NTPC Limited has declared plans to set up large solar power parks in Gujarat and Rajasthan.

A senior official at the Ministry of New and Renewable Energy has told media outlets that the government is currently studying the feasibility of setting up  other projects along other border with Pakistan in the states of Rajasthan and Gujarat.

The Indian government also launched a solar power capacity addition program specifically for public sector companies. Under this program, these companies shall compete for capital cost subsidies to set up to 12 gigawatts of solar power capacity. Although the scheme have not received enough encouraging response from the companies which is why the government is issuing fresh directives.

Unlike many regions in Africa, Nigeria’s economy and strong entrepreneurialism mean that millions of commercially-viable businesses are powered with expensive or unreliable power, a scenario that continues to remain attractive for both local and foreign investors.

Also, many rural households spend more than $6/month (N2,100/month) on kerosene or battery powered torches, making a compelling case for solar home systems, a report by Rural Electrification Agency (REA) said.

With more enabling environment like that of India, continued cost reductions, and targeted finance, the Nigerian minigrid market can scale rapidly to over 10,000 sites by 2023, powering 14 percent of the population with capacity up to 3,000 MW and creating an investment potential of nearly $20 billion (N7 trillion) and annual revenue opportunity exceeding $3 billion (N1 trillion).

“The government and development partners are inviting the private sector to work with them to capture this opportunity, while saving Nigerians money and powering economic development to further expand the market,” REA said in its report.