New Delhi: India’s renewable energy industry is proving to be a bright spot for global oilfield equipment and service suppliers battling cutbacks in spending by oil and gas producers.
Finnish energy and marine equipment-maker Wärtsilä Corp. has decided to look for opportunities in India’s renewable energy capacity expansion programme, said Wärtsilä India Pvt. Ltd. president and managing director Kimmo Kohtamäki.
Besides developing solar power and hybrid plants, which work on solar panels and internal combustion engines, Wärtsilä is interested in supplying know-how and services for balancing and stabilizing the grid, which requires massive amounts of renewable energy and is entirely dependent on vagaries of nature such as sunshine and wind availability.
Grid is stabilized with other sources of energy such as natural gas-based power or hydroelectric power, the availability of which can be controlled at any time of the day.
“Taking into account the targets for renewable energy capacity, for example, of having 100 giga watt (GW) of solar power capacity by 2022, we are keen to be part of the opportunity, including in grid balancing,” said Kohtamäki. India has set a target of installing 175GW of renewable energy by 2022, up from 6.7GW now, out of which, 100GW will be solar power.
Wärtsilä, which announced its global foray into renewable energy industry in April, expects rapid growth in its solar business to annual sales of $339 million in four years. The company, which will set up its first hybrid power plant in Jordan, will seek contracts from utilities, independent power producers and industrial customers in markets including India.
The other areas that Wärtsilä is betting on for growth in India is construction of liquefied natural gas (LNG) terminals, ship building and a wider offering of services to energy companies.
The company is also bullish on the planned renovation of older and inefficient thermal power plants in India with more efficient ones.
In January, Wärtsilä India signed a deal with Cochin Shipyard Ltd (CSL), which is expected to attract more ship-repair business at CSL’s facility and enable Wärtsilä to set up an equipment-manufacturing centre at the Cochin Port Trust Area. CSL is now building LNG carriers for Gail India to import gas as part of the ‘Make in India’ drive.
“In energy services, we are having a steady growth in India. We already supply marine equipment to Indian Navy,” said Kohtamäki.
While the reduction in capital spending by many global oil and gas producers due to a slump in oil and gas prices has impacted the equipment and services industry, promotion of renewable energy by governments to fight climate change is opening up new opportunities for them.