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GE ENErGy - Frank Farnel

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INdIA<br />

RENEwaBLE ENERgY<br />

INdIA’S GrEEN FUTUrE<br />

India is making renewable energy a priority and opening a new market for<br />

suppliers. Kishore Jayaraman, President and CEO, <strong>GE</strong> Energy India, bangladesh<br />

and Sri Lanka, talks about the stakes for <strong>GE</strong> and EPC companies.<br />

Kishore Jayaraman,<br />

President and<br />

CEO, <strong>GE</strong> Energy<br />

India, bangladesh<br />

and Sri Lanka<br />

w<br />

ith its spectacular economic<br />

growth, one thing<br />

is clear: India needs<br />

power. In order to keep India’s<br />

development humming, the country<br />

intends to increase its generation<br />

capacity by nearly 80% by<br />

2012.<br />

“The Indian government has set<br />

specific targets for renewable<br />

energy: by 2012 it expects renewable<br />

energy to make up 10% of<br />

total power-generation capacity<br />

and have a 4% to 5% share in<br />

the electricity mix,” says Kishore<br />

Jayaraman, President and CEO,<br />

<strong>GE</strong> Energy India, bangladesh and<br />

Sri Lanka. These projections mean<br />

that renewable-energy growth will<br />

skyrocket compared to traditional power generation, with<br />

clean solutions making up 20% of the 70,000 MW of total<br />

additional energy planned from 2008 to 2012.<br />

The focus on renewable energy is a positive step for India.<br />

“renewables can help us meet a part of the persistent<br />

energy shortage, which is around 14%,” explains Jayaraman.<br />

“It can also mitigate some of our energy-security concerns,<br />

considering we import 75% of our oil and 5% of our<br />

coal. Last but certainly not least, we’ll be able to minimize<br />

our carbon emissions.”<br />

green opportunities<br />

The emphasis on alternative energy sources means new<br />

opportunities for both <strong>GE</strong> and its EPC companies. “According<br />

to a United Nations Environment Programme report,”<br />

Jayaraman points out, “India saw a 12% rise in sustainable<br />

solutions like wind, solar, biomass and small hydro projects,<br />

with $4.1 billion being pumped into this sector last year.”<br />

With 17% growth in investment in 2008, wind power is one<br />

area that is ripe for development.<br />

“Given the low wind-speed regime sites in India, <strong>GE</strong> has the<br />

technology to extract maximum power from these sites,<br />

improving the internal project rate of return compared to<br />

other suppliers of wind turbine generators in the market,”<br />

says Jayaraman. “With independent power producers [IPPs]<br />

eyeing the renewable-energy space in the Indian market,<br />

the average size of such projects has increased to 50 MW.<br />

Estimated<br />

renewable energy<br />

market in India by<br />

2012:<br />

$1.9<br />

billion<br />

Number of “green”<br />

megawatts to be<br />

added by 2012:<br />

15,000<br />

percentage of clean<br />

solutions in energy<br />

mix by 2020:<br />

20%<br />

Source: Ministry of New<br />

and renewable Energy,<br />

government of India<br />

This calls for bigger, more experienced EPC players who can<br />

bring in their expertise in fulfilling this kind of power-generation<br />

contract.”<br />

the importance of partnerships<br />

Other companies are focusing on the renewable-energy<br />

sector as well. “Currently, eight manufacturers, including<br />

major international players, cover 80% of existing market<br />

demand,” Jayaraman says. “In order to best position <strong>GE</strong>, we<br />

need a strategic associate for project-development activities,<br />

as the market is quickly shifting from a retail business<br />

to large IPP projects.”<br />

<strong>GE</strong> is a step ahead, however, as plans for its local wind turbine<br />

manufacturing facility are already under way. “We’ll be<br />

well placed in terms of product availability and competitive<br />

pricing due to the advantage of product localization and the<br />

impact of import taxes and duties,” says Jayaraman.<br />

The growth in this segment over the past 15 years since wind<br />

power came to India — along with the global demand for<br />

wind power in developed economies like the United States<br />

over the past five years — has spurred creation of domestic<br />

capacity and capabilities in technology and the supply chain<br />

that enable Indian companies to compete on a global scale<br />

as well allowing global players to establish their presence in<br />

India, all benefiting the end consumer in the long run.<br />

Number 3 l October 2009 CONNEXION l 21

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