Google's search for clean energy

So, what’s the big deal when an American company invests in clean energy? Well, it might not sound very exciting, but when the company turns out to be Google Inc., a giant company that handles most of the internet search queries and is run by a group of young and intelligent people, it certainly draws our attention.

Recently, Google announced that it has invested US$ 94 million in a solar photovoltaic power plant near Sacramento, California. With this investment, its total inputs in the clean energy sector has reached over US$ 915 million (Rs 5000 cr). We, at DSIJ, have tried to see what bearing this news has for the Indian renewable energy sector.

As we have reiterated in previous articles too, the Indian power sector has numerous problems associated with it, and is therefore, in the need of an alternative source of energy. In this regard, we see long-term potential in the renewable energy space. India has negligible renewable capacity compared to its conventional energy generation capacities. Until now, renewable energy cost almost 3 times of what conventional energy did, but in a recent bidding process, the feed-in-tariff has come down to Rs 7.49/unit from Rs 15/unit. Hence, the news of Google’s venture makes sense in Indian context. At this time, when photovoltaic cell market has crashed, we believe that this venture will inspire more companies to invest in renewable energy.

The Indian govt. is also promoting additional renewable energy projects, and has asked many state electricity boards to increase exposure to renewable energy. Through the Jawaharlal Nehru National Solar Mission (JNNSM), the govt. wishes to increase the country's solar power capacity to 20000 MW by the year 2022. Also, during the recent bidding for upcoming solar projects, the govt. received a very encouraging response, which indicates that many companies are interested in setting up solar projects. The current installed capacity in wind energy is just over 14000 MW in India, which is also set to grow in the future.

With decent investment coming from Google in this sector, and the reduction in feed in tariff rate, we believe that Indian companies may also rush in to invest in solar and wind farm projects. In our opinion, clean energy investment has a bright scope in India, given the current performance of the thermal and hydro power companies. We also see good growth prospects for the renewable power equipment manufacturing companies ahead.

                                                                       Google’s Exposure To Clean Energy (Source: Google green)