OMCs bullish on renewable energy segment
- Market volatility will rise in short-term as elections near: Rana Gupta
- Doing business in India: ‘Substance’ over ‘form’ in transfer pricing regime
- Hong Kong can be India’s gateway to China: Gautam Bambawale
- Jerome Powell moves to normalize US monetary policy
- Piramal Finance to invest Rs10,000 crore in hotel assets: MD Khushru Jijina
Mumbai: In a bid to reduce carbon footprint and look at avenues beyond the conventional sources of energy, oil marketing companies (OMCs)—Indian Oil Corp. Ltd (IOCL), Bharat Petroleum Corp. Ltd (BPCL) and Hindustan Petroleum Corp. Ltd (HPCL)—are looking at expanding their renewable energy plans.
IOCL, the country’s largest oil marketing company, plans to generate 260 megawatt (MW) of renewable power in the next five years. HPCL, on the other hand, has plans to generate 1,000 MW in the same time period.
“IndianOil has ambitious plans to broaden its energy basket with alternative energy options. The corporation envisages setting up 260 MW of renewable energy (wind and solar) over the next five years,” IOCL said in its annual report for 2015-16.
IOCL has installed wind power systems totaling 69.3 MW in Gujarat and Andhra Pradesh. A 5 MW grid-connected solar power plant at Rawra, Rajasthan, is also in operation since 2012.
“Transition to alternative forms of energy is picking up momentum and, being an energy company, we are preparing for this paradigm shift. We have already made big investments in both solar and wind power projects and are well placed to quickly adapt to future needs,” said B. Ashok, chairman of IOCL, in the annual report.
Solar power systems totaling 900 KW have also been installed at various IndianOil offices across the country. The company has so far converted about 4,200 of its fuel stations to operate on solar energy, a major initiative towards reducing carbon emission.
The cumulative capacity from these solar photo-voltaic power systems is equivalent to about 15 MW of conventional electrical power.
In September 2015, at the United Nations Framework Convention on Climate Change, Conference of Parties (COP-21) in Paris, India committed to produce 40% of electricity from non-fossil fuel sources by 2030.
OMCs say their renewable energy policy is in line with this commitment.
IOCL said it has adopted a long-term plan to reduce its specific carbon emissions by 18% from 2012 to 2020.
BPCL, on the other hand, has commissioned 6.3 MW capacity windmills at Hanumanthappa in Devangere district, Karnataka, 4 MW capacity solar power plant at Bina, Madhya Pradesh, and 1.05 MW capacity solar power plant at corporate research and development centre, Noida.
Under the wind energy project, BPCL has installed three wind turbine generators with a capacity of 2.1 MW each.
The company, in its annual report for 2015-16, said that installation of renewable energy has resulted in saving of 11,051 MWh (megawatt hours) of conventional energy and mitigated emissions of 8,951 million tonnes carbon dioxide-equivalent (CO2e).
“We want to contribute towards mitigating the risks of climate change. Currently, we are assessing the feasibility of setting up rooftop solar plants at its various outlets and LPG plants. Developing more grid-connected wind power plants is also being explored,” BPCL stated in the report.
A prime reason for these OMCs to turn to renewable energy is the fact that their major diesel consumers are re-jigging their energy mix.
For instance, Indian Railways is pursuing an electrification drive for its locomotives and a target to increase the share of renewable energy in its energy usage to 10%.
“These trends, if sustained, will have implications for reconsidering refinery configurations and concomitant investment,” IOCL said.
HPCL, which has undertaken an elaborate transformational process to develop ‘Udaan 2030’, is making strategic bets across refining, marketing, petrochemicals, natural gas, exploration and production and renewables.
HPCL currently operates wind farms of 50.5 MW capacity installed in Rajasthan and Maharashtra. A project for an additional 50.4 MW wind power capacity is under implementation.
The company is also undertaking a 5 MW grid connected solar power plant project at Ghatkesar Terminal in Andhra Pradesh.
“We are bullish on renewable energy. Though we have an ambitious target of reaching 1,000 MW in five years, we are planning to install capacities picking up one state at a time,” said a senior HPCL official, on the condition of anonymity.
The renewable energy road, however, is not an easy one for the OMCs. Availability of land and infrastructure are the biggest issues for those who wish to enter the renewable segment say industry officials.
“There are challenges for OMCs on various fronts. One, acquisition of suitable land is a problem. Once you acquire the land, connecting wind and solar farms to the grid is important. Both options are mostly unavailable at the locations. Besides, you need to have your power purchase agreements in place beforehand,” said the CEO of a renewable energy company, on the condition of anonymity.
The HPCL official quoted above said given the challenges, the company is open to joining hands with existing renewable energy companies in the sector to further its goals.