Oil PSUs plan major push for promotion of renewable energy

The ministry of petroleum and natural gas has signed a memorandum of understanding (MoU) with the ministry of new and renewable energy (MNRE) for setting up special purpose vehicles (SPVs) for development of clean energy sources through investments in solar, wind and other renewable energy projects.

It proposes to set up two special purpose vehicles (SPVs) for promoting the deployment of technologies to supplement conventional fossil fuel-based power generation that will give boost to the development of large scale grid connected renewable energy projects and implementing off-grid applications.

The SPVs will be able to leverage the strength of oil and gas companies for promoting renewable energy projects.

The SPVs would function independently like commercial organisations, while utilising various promotional schemes of MNRE and state governments for the purpose.

The first SPV is for installation of large scale grid connected power generation plants based on renewable energy.

Oil and Natural Gas Corporation (ONGC) will be the lead partner in this SPV, along with equity participation from Oil India Limited (OIL), GAIL (India) Limited (GAIL) and Engineers India Limited (EIL) and also the PSUs under MNRE, viz, Solar Energy Corporation of India (SECI) and Indian Renewable Energy Development Agency (IREDA).

The second SPV is for setting up renewable energy off-grid projects using advanced technologies and market-based business solutions for promoting access to the energy deficient population.

Indian Oil Corporation Limited will be the lead partner in the second SPV, along with equity from Bharat Petroleum Corporation Limited (BPCL) and Hindustan Petroleum Corporation Limited (HPCL) and also represented by SECI and IREDA.

EIL has been assigned the task of preparing the feasibility report for assessment of overall economics of the projects, development of business models based on expected returns, risk analysis etc for the two SPVs.

The feasibility reports will be prepared within three months and the two SPVs will be incorporated immediately thereafter, based on the feasibility reports.

A steering committee with the secretary, ministry of petroleum and natural gas as its chairman and secretary of the MNRE as co-chairman has been set up to monitor implementation of the MoUs.