Deepak Puri is Chairman and Managing Director of Moser Baer, one of India's leading technology companies with a presence in more than 80 countries and a client base of Fortune 500 companies. Under his leadership, Moser Baer--which is one of the world's top three manufacturers of optical storage media--diversified into solar, thermal and hydro energy. Puri is also the Chairman of the Renewable Energy Committee of Confederation of Indian Industry.
He was awarded the "Golden Peacock Environment Management Award" by the World Environment Foundation in 2005, was also conferred the prestigious "Padma Shri" award by the President of India for his contribution to the growth of Indian industry in January 2010.
1. What policy steps are needed for India to address its growing domestic energy demands, and what potential is there for renewable energy to contribute more to the grid?
Deepak Puri: The 12th Five-Year Plan (2012-17) of India targets a capacity addition of over 80,000MW, out of which the contribution of renewable energy is seen to be over 27,000MW (33.75 percent). Due to coal shortage in the country, regulatory uncertainty over tariffs for imported coal-based projects and abundant renewable energy potential, the switch to renewable energy has become more aggressive. India is focusing on increasing its renewable energy capacity to over 54,000MW by 2017 and hence increasing the contribution of renewable energy to the energy mix from 12 percent at present to 18 percent.
However, mere capacity addition plans alone will not suffice. The gigantic task of strengthening the grid also needs to be done in parallel, with focus on enabling the increased contribution from renewable energy. The transmission and distribution systems in the country need to be able to facilitate the increased capacity addition of intermittent renewable energy, also allowing for cheaper transmission charges, inter- and intra-state open access and banking facilities, net metering, etc.
The higher contribution of renewable energy can be expected to come in during the 13th Five-Year Plan as the strong transmission and distribution grid shall be in place and progressive developments in renewable energy generation both in terms of technology and costs shall bring renewable energy sources to grid parity.
2. Moser Baer has invested significantly in several renewable energy technologies, such as solar, hydro and thermal. Which technology do you think holds the most promise at this point in time in terms of helping India achieve greater energy security?
DP: I represent Moser Baer India as its Managing Director where we also manufacture solar PV modules. However, it is Moser Baer Projects which is a different company, which is into developing solar farms and setting up hydro and thermal plants.
Considering India's present energy scenario, a base deficit of 9 percent and a peak deficit of 11 percent, it becomes very important to have increased generation to meet base loads. To my mind, at present, thermal power generation in the country may be the best bet to meet the nation's energy needs, while hydro power may be used to balance the base and peak loads. But for long-term energy security, renewable energy sources are the way forward, keeping in view the severity of climate change concerns.
3. The global solar industry has faced challenges in the form of trade wars and depressed panel prices. What is Moser Baer's outlook for the solar industry globally and within India for the next five years and what challenges need to be overcome?
DP: The major challenges faced by the industry today are: 1) Lack of a level playing field for manufacturers in India vis-a-vis competition from certain non-market economies, where we are virtually competing with the country and not companies. 2) Two pieces which need to be included in the domestic content regulation of the Jawaharlal Nehru National Solar Mission (JNNSM)--Inclusion of all technologies in the domestic content requirement; and making guidelines for all state policies consistent with the central mission.
Recently, with the initiation of an anti-dumping investigation in India, we are hopeful that the dumping margins will significantly come down and remedial measures will be undertaken to ameliorate the injury caused to the domestic industry by massive dumping of products in a relatively short time. In May, the US announced a preliminary decision to levy anti-dumping duties of up to 250 percent on panels imported from China. The European Commission said recently that it will open an anti-dumping probe into Chinese PV exports. However, we welcome foreign players to establish manufacturing bases in India, which will give fillip to employment generation, exchange of technology and growth in R&D as well as the manufacturing ecosystem.
It is notable that overreliance on Chinese imports has not only killed local solar manufacturers, but also stopped innovation while offering customised tailor-made local solar solutions for the masses. The only long-term option available to enhance national productivity is by promoting local manufacturing and adopting a cluster-based approach. The solar specific cluster would allow for relevant suppliers of raw materials, ancillary industries, the service industry, technical manpower and financing institutions, etc., in the vicinity within the same cluster and promote inter-dependence and competition simultaneously.
4. In recent years, we have seen a steady increase in investments in renewable energy. Looking forward, how do you foresee the dynamics of energy financing playing out in Asia and globally?
DP: We have indeed seen an increase in investments in renewable energy in recent times. Major investments are focused in China and India. The trends of investments in the renewable energy sector as projected by Bloomberg New Energy Finance, may be seen below:
Credit: Chart has been republished with permission from Bloomberg New Energy Finance (BNEF).
The new investments in the renewable energy sector have been focused mainly in China, India and other new markets.
Credit: Chart has been republished with permission from Bloomberg New Energy Finance (BNEF).
There is a need to earmark the sectoral financing limits of banks/financial institutions for renewable energy projects. This would enable the lending agencies to allocate more funds for the development of renewable energy in the country.
Recently, Power Finance Corporation (PFC) and Rural Electrification Corporation (REC) launched 10-year bonds with a coupon rate of 7.21 percent and 15-year bonds with a coupon rate of 7.38 percent. Infrastructure Finance Company (IIFCL) had three bond maturities at 10 years with a coupon rate of 7.21 percent; 15 years at 7.38 percent; and 20 years at 7.25 percent. This was to raise funds totalling Rs20,000 Crore for infrastructure financing. The funding for renewable generation does not appear to be a challenge if a conducive policy environment in the clean energy sector is developed as suggested above.
5. What are Moser Baer's plans for expanding its energy-related businesses in Asia?
DP: Besides being a leader in manufacturing solar PV cells and modules, we are also one of the leading solar-focused engineering, procurement and construction (EPC) players in the Indian market, highly rated for our project execution capabilities. During the last FY2011-12 alone, we executed projects of 110MW. In the last few years, we have developed strong expertise in the solar EPC domain with installations across technologies and have executed projects with sizes ranging from 1KW to 30MW. One of the key projects executed included Asia's then largest solar farm of 30MW near Patan, Gujarat.
Within Moser Baer we have ~200MW of manufacturing capacity of C-Si and Thin Films (A-Si) cells and modules. At present, Moser Baer's plans are primarily focused towards the Indian market, which according to KPMG estimates has huge potential and is estimated to reach cumulative installations of 68GW by 2021-22. This is significantly in excess of the targets set under the National Solar Mission. Furthermore, we shall continue to focus on R&D activities at our Greater Noida and Eindhoven facilities, with emphasis on improvement in device efficiency leading to higher wattage per module and hence lower levelled cost of energy.
It is very heartening to participate in the initial phases of solar deployment in India. When you see what Germany has achieved in less than 10 years--over 20GW of solar electricity per hour (this is the equivalent of about 20 nuclear plants) with far less sunshine than India--the opportunities in the subcontinent are enormous. Over a period of time, we will expand our business portfolio to more countries in Asia as opportunities open up.