The ordinance to e-auction coal blocks got President Pranab Mukherjee's approval on Tuesday, paving the way for a "transparent" allocation process for mines to the private sector, even as trade unions and Left parties opposed the move.

The ordinance was warranted in the backdrop of the Supreme Court's order quashing 214 coal blocks allocated to various companies since 1993 on the ground they were done in an illegal manner by an "ad-hoc and casual" approach "without application of mind".

Industry bodies hailed government's move and termed it as a step in the right direction.

"This is an important decision and highlights the government's seriousness to reform the coal sector. Through this move, the government has arrested concerns pertaining to diminishing coal supplies," Federation of Indian Chambers of Commerce and Industry President Sidharth Birla said.

"The air of uncertainty has been resolved and a clear road map has been put forward. CII (Confederation of Indian Industry) believes quick decision-making by the government sends the right signals," CII Director-General Chandrajit Banerjee said.

Naveen Jindal-led Jindal Steel & Power Ltd, among the worst hit in the cancellation of the coal blocks, said it would participate in the auction process. JSW Steel would "definitely" take part, its joint managing director, Seshagiri Rao, said.

Left parties and several trade unions opposed the e-auctioning and the enabling provision in the ordinance that allows commercial mining by private firms and sought its reversal, warning of a nationwide strike if the Centre went ahead with the changes.

All India Trade Union Congress General Secretary Gurudas Dasgupta said the decision of the government on coal blocks "has a covert implication. It is a back-door entry for taking over the entire coal sector by private corporates".

The Communist Party of India (Marxist) and the Communist Party of India said they fully supported the protest actions by central trade unions.

All India Coal Workers Federation General Secretary Jibon Roy, too, warned of a nationwide strike if the government implemented any enabling provision to allow commercial mining by private companies.

Allocation of coal blocks became a political issue after the Comptroller and Auditor General alleged arbitrariness and absence of any criteria in the screening process and pegged notional loss to the exchequer at Rs 1.86 lakh crore.

The Ordinance to auction coal blocks through an electronic platform got the President’s approval on Tuesday, paving the way for a “transparent” allocation process for mines to the private sector, even as trade unions and Left parties opposed the move.

The long-awaited “reforms” in the sector, a departure from the existing practice of allocation by a screening committee mechanism, got the go-ahead from President Pranab Mukherjee, who promulgated the Ordinance cleared by the Union Cabinet last evening.

The Ordinance was warranted in the backdrop of the SC’s order quashing 214 coal blocks allocated to various companies since 1993 on the ground that they were done in an illegal manner by an “ad-hoc and casual” approach “without application of mind”.

Industry bodies hailed government’s move and termed it as a step in the right direction.

“This is an important decision and highlights the government’s seriousness to reform the coal sector. Through this move, the government has arrested concerns pertaining to diminishing co-al supplies,” FICCI president Sidharth Birla said.

“The air of uncertainty has been resolved and clear roadmap has been put forward. CII believes that quick decision-making by the government sends the right signals,” CII DG Chandrajit Banerjee said. Trade bodies re-presenting four lakh coal workers on Tuesday said they oppose e-auction as well as the enabling provision in the proposed Ordinance.

Leading industry body FICCI today welcomed the government’s decision to bring an Ordinance to clear the impasse created by the recent Supreme Court’s judgment cancelling 204 coal blocks allotted since 1993.

“This is an important decision and highlights the government’s seriousness to reform the coal sector,” said Mr Sidharth Birla, president of FICCI.

The Ordinance will address the future of cancelled blocks and ensure that the already producing blocks are brought back on track, he said.

Through this move the government has arrested concerns pertaining to diminishing coal supplies, he added.

The Ministry of New and Renewable Energy (MNRE) has set a target of reaching 100,000 MW generation capacity for the sector in the next five years, said Upendra Tripathy, Secretary, MNRE.

“This target would include both off-grid and on-grid generation for both wind and solar energy,” said Tripathy, adding that an investment of $35 billion would be required annually to meet the target. Currently, India gets $6 billion investment in the renewable energy sector every year.

The country so far has 31,000 MW of renewable (wind and solar) power generation capacity and it will increase to 50,000 MW by 2016-17 when the 12th Plan period ends.

Global meet

The Secretary said 5,000 MW of solar and wind energy projects will be tendered this year.

To attract the level of investments required to meet the target, the Ministry will host a global investor meet in February 2015, in partnership with industry bodies Confederation of Indian Industry and Federation of Indian Chambers of Commerce and Industry.

Tripathy added that his Ministry is also urging banks to demarcate 10 per cent of their credit for the renewable energy sector.

“We have also requested the Reserve Bank of India to bring renewable energy under priority sector lending,” said Tripathy.

In order to provide greater funding for the renewable sector, the Ministry is negotiating a €1-billion loan from German bank KfW. If successful, the loan will be used to finance setting up of rooftop solar panels. “Off-grid plays an equally important role. We are also compiling data on vacant rooftop space,” said Tripathy.

The Ministry is also planning a pilot project for offshore wind energy generation.

To overcome issues of land acquisition and delays in obtaining clearances, Tripathy said the Ministry would set up a single-window clearance mechanism and is in discussions with major States to set up the same.

The Supreme Court judgment that coal blocks allocated since 1993 onwards were illegal may disrupt restoration of investors' trust in the country, Sidharth Birla, president, Federation of Indian Chamber of Commerce and Industry (FICCI) said Thursday.

"This latest judgment has once again brought to the fore concerns about the country's policy regime and has the potential to disrupt restoration of investors' trust," he said in a statement. "We reasonably expect that any extreme step (such as possible en-masse cancellation of allocations) shall not compromise legitimate business and investors who participated in good faith in processes laid out over an extended period by the governments of the day. Of course, in cases of proven mala fide, the law must take its own course," Birla added.

Earlier Aug 25, a bench of Chief Justice R.M. Lodha, Justice Madan B. Lokur, and Justice Kurian Joseph said: "The entire allocation of coal block as per recommendations made by the Screening Committee from July 14, 1993 in 36 meetings and the allocation through the government dispensation route suffers from the vice of arbitrariness and legal flaws."

"The approach had been ad-hoc and casual. There was no fair and transparent procedure, all resulting in unfair distribution of the national wealth. Common good and public interest have, thus, suffered heavily," the court said. "Since allocation of coal is permissible only to those categories under section 3(3) and (4) (of the CMN Act, 1973), the joint venture arrangement with ineligible firms is also impermissible. Equally, there is also no question of any consortium/leader/ association in allocation," the court added.

"FICCI has consistently advocated the principles of transparency and constitutionality in allocation of natural resources (including coal) and making these rapid, enforceable and certain via robust processes," Birla said.

"At stake are productive assets estimated at Rs.286,000 crore till 2012, which could be left stranded and rendered non-performing, in an hitherto unprecedented manner. We urge the fullest consideration of multiple levels of serious economic implications to the nation, including loss of employment, replacing domestic loss of production with imports and compromising energy security," Birla said.

"One tangible solution going forward could be introduction of independent mining companies, selected by competitive revenue-sharing bidding and engaging them from exploration to mining in un-mineralised blocks; this is in line with global practices," he said. "Use of electronic platforms for market access and price discovery ensures transparency and avoids implicit transfers from the Centre. A comprehensive legislation encompassing these objectives is urgently required to overhaul the coal sector" Birla added.

A wide cross-section of the industry hit by the Supreme Court order cancelling coal blocks allocated between 1993 and 2010, has come together to appeal to the government to look after their interests when the next hearing takes place on September 1.

After the shock waves generated by the order had settled down, associations of coal producers, sponge iron manufacturers and power producers have been meeting for the past two days to work at several levels such as approaching the ministries as well as briefing their counsel.

Separately, the apex industry associations such as FICCI, CII and Assocham have also been making their views known. “We are sure the Supreme Court will take into consideration cases where production has begun and investments made, while giving its verdict on the blocks,’’ said CII Director General Chandrajit Banerjee.

Though Prashant Bhushan, the lawyer for the petitioner Common Cause, is confident that cancellation of all coal blocks is a settled issue, the industry feels the Court might have left the door open for a solution that will not affect the industry adversely.

An official of a company with interests in steel and coal was hopeful that there would not be an across the board cancellation of coal mines and the Court might settle on some kind of fine that could be suggested by a panel to be named at the next hearing. The industry’s stand was voiced by FICCI. “This judgement has once again brought to the fore concerns about the country’s policy regime and has the potential to disrupt restoration of investors' trust,’’ said FICCI president Sidharth Birla.

“We reasonably expect that any extreme step shall not compromise legitimate business and investors who participated in good faith in processes laid out over an extended period by the governments of the day,’’ he added.

Another official of a company pointed out that the problem arises from the fact that 31 coal mines are producing coal.

Up to 2012, Rs. 2.86 lakh crore have been invested in end use steel, cement and power projects. Add to it investments in coal mines, and it adds up to Rs. 4 lakh crore. Also, an estimated 10 lakh people are employed in these sectors, he said.

India needs to step up coal production. Despite being the third largest coal reserves in the world, India imported about 17 crore tonnes of coal last fiscal at Rs. 95,000 crore.

“If indeed these allocations were arbitrary and unfair, why did other players in the industry not complain all these years? No major country in the world mandates that coal can be mined only for captive use for steel and power plants,’’ said a senior company official.

While the private and the public sector hit directly by the order is active and not averse to joining hands, the Indian banking sector with a total exposure of Rs. 5 lakh crore wants to approach the issue differently. Financial institutions and banks, according to industry sources, have been asking the Finance Ministry to put across its views to the Attorney General.

“We are hoping that we will not suffer the same fate as the telecom sector which has been unable to recover after the Supreme Court cancelled 122 telecom licences in 2012,’’ said an industry association official.

The power ministry plans to create a fund to provide long-term finances to hydropower developers, and aims to play an active role in resolving state level sues that are blocking such projects.

"Hydropower did not get the desired attention as concerned ministries and departments were working in silos, and problems with states and central authorities could be resolved. However, the new government is working in tandem as a team and we are hopeful to resolve pending issues to give conducive environment to hydropower sector," power, coal and renewable energy minister Piyush Goyal said on Tuesday.

He said one of his first projects Prime Minister Narendra Modi inaugurated was the 240 MW Uri-II project, demonstrating his government's commitment towards hydropower. Modi is expected to inaugurate one more hydroelectric project at Ladakh next week. India has a potential to build 1,48,000 MW of hydropower generation capacity. However, India could add only 5,400 MW of capacity during 11th Five Year Plan against its target to commission 16,500 MW of projects, partly due to procedural hurdles and partly because of faulty planning. India has around 36,000 MW of installed hydropower capacity. About 13,000 mw of additional capacity is under construction.

At a conference on hydropower organized by FICCI, Goyal said India can surpass its target of generating 15 per cent of its energy from renewable sources by 2020 by promoting hydropower. He said that in line with budget's promise to offer longer term finance to infrastructure projects, ministry of power plans to set up a fund or set up a body to finance to hydropower projects.

Goyal promised support for private investment in hydropower but told developers that his ministry will not push Power Finance Corporation or Rural Electricity Corporation to finance specific projects. "It is the job of investors to determine the economic viability of the project and convince the lenders," said Goyal.

Goyal said he hoped differences between Arunachal Pradesh and Assam would be resolved to put 2,000 MW Lower Subansiri Hydro Power Project on track. Next month, he will meet a delegation from Assam to discuss their concerns as the cost of the delayed project is going up significantly.

The Planning Commission has set up a task force, headed by member (energy) B.K. Chaturvedi, to oversee efforts to boost production of solar energy. The panel, which held its first meeting last week, is composed of officials from the ministry of new and renewable energy, the ministry of power and the Central Electricity Regulatory Commission (CERC), among others.

The 12-member committee also has members from industry bodies like the Confederation of Indian industry (CII) and the Federation of Indian Chambers of Commerce and Industry (FICCI).

Solar power contributes less than 0.5% of India’s energy mix, a figure the government hopes to raise to 5-7% by 2022. According to the solar energy consulting firm Bridge to India, the country had 1,700 megawatts (MW) of photo voltaic capacity installed by May 2013. The consulting firm estimates that the figure will jump to 12,800 MW by 2016.

The terms of reference of the committee say that it is supposed to suggest policy interventions for improving domestic manufacturing solar energy products, as well as suggest measures to enhance availability of cost-effective finance for solar manufacturers and developers. The committee will also ensure effective implementation/strengthening of the renewable energy certificates mechanism and seek involvement of state governments for solar capacity development.

“The task force will also talk to states as the demand for power is going up,” Chaturvedi said on the sidelines of a conference organised by FICCI on Wednesday.

Vivek Chaturvedi, chief marketing officer at Moser Baer Solar Ltd, said the formation of the committee is a timely initiative. “It is brilliant on constitution with all the right ministries and industry bodies being part of it. We need to have a thriving domestic manufacturing industry to achieve energy security and help save on foreign exchange,” he said.

Reliance Industries Ltd (RIL) said on Tuesday that it is evaluating opportunities toward a multi-billion dollar investment on two to three oil blocks offered by Venezuela as it look at countries from Myanmar to Canada to expand its overseas energy assets.

“We are looking at two things in Venezuela. One is, we have a long term (crude oil) supply contract and we are looking at enhancing the quantities under this contract, possibly from next year,” RIL executive director PMS Prasad told reporters on sidelines of a FICCI event.

RIL currently imports about 300,000 barrels per day (bpd) of oil from Venezuela for processing at its twin refineries at Jamangar in Gujarat. It now wants to increase these volumes, possibly to 400,000 bpd.

“The second is, we are also looking at investing in Venezuela. They have given us opportunities for us to evaluate and make a decision,” Prasad said.

Years after it dropped out of a ONGC-led consortium for developing Venezuela’s giant oil fields, RIL is now keen on taking a project to produce heavy oil in the South American nation.

Last year RIL signed a memorandum of understanding with Petroleos de Venezuela, or PDVSA, to develop a project in the Orinoco extra heavy crude belt.

Prasad said the project may involve developing the field and setting up an upgrader to convert the synthetic oil into oil that can be processed in refineries.

Amid indications that it maybe looking at Tehran for crude, New Delhi on Tuesday made it clear that it only subscribed to UN sanctions on the country and not the US.

"We don't subscribe to the US sanctions, we subscribe to the UN sanctions. We were party to the UN sanctions, to the UN resolution and voted for it," external affairs minister Salman Khurshid said in response to a question on what India plans to do to circumvent US sanctions on importing oil from Iran.

"There are issues of availability of insurance and vessels for carrying oil and of a banking system active and ready to be used for payments."

He was talking on the sidelines of the FICCI-organised 3rd National Conference on Energy Security here."This is a critical moment in which we need to do some tidying up and we will get over the situation in the not-too-distant future," he said.

He also said talks were being held with Iran over the issue of the detention of Indian oil tanker MV Desh Shanti. The minister's comments comes in the wake of suggestions that India could save $8.5-billion in foreign exchange spending on crude if it relies more on supplies from Iran, which is able to accept payment in rupees.

Khurshid also said that economists and bankers were examining how to manage to pay for Iranian oil with the earlier mode of payment by India through an Ankara bank being switched off.

"What happened in the past is the banking channels available to us through Turkey have now been switched off... So, how we manage it, it is for the economists and bankers to see," he added.

The US and European Union sanctions have pushed Tehran into accepting payment in rupees for some of its oil and higher volumes could support the currency.

Oil minister M Veerappa Moily, in a letter to PM Manmohan Singh, has detailed plans to save $20 billion in foreign exchange spending, suggesting that about 11 million tonnes of crude can be imported from Iran this fiscal.

The prime minister has asked the ministry for a $25-billion cut in the oil import bill to narrow the current account deficit.

FICCI has signed MoUs with Energy Efficiency Services Ltd (EESL) and Germany’s GIZ, to start a pilot project on trigeneration—simultaneous production of electricity, heating and cooling—at its Delhi headquarters. FICCI will support this EESL initiative to promote optimal utilisation of energy and resources. EESL is a joint venture of NTPC, Powergrid, PFC and REC. The MoU is aimed at market development and implementation of the National Mission for Enhanced Energy Efficiency, which seeks to unlock the energy efficiency market of Rs. 74,000 crore.

Amidst move to force Reliance Industries to sell gas from its main fields in KG-D6 block at old rates of $4.2, the Mukesh Ambani-run firm on Tuesday hit out saying the government was not honouring signed contracts and extraneous factors were being brought into business.

RIL, which has faced numerous delays in getting approvals and shifting goal-posts, said the country did not have a stable policy regime and this was responsible for exit of global energy giants like Royal Dutch Shell, BHP Biliton of Australia, Statoil of Norway and Brazil’s Petrobras. “It is there for everyone to see. We dont have a stable policy regime which is very very essential if you expect any investor to come in and invest either in technology or put in big risk investment that are required in (oil and gas) exploration, appraisal and development,” RIL executive director PMS Prasad said on sidelines of a FICCI conference.

New Exploration Licensing Policy (NELP) has been continuously eroded by “taking away several of the rights (of companies,” he said.

The policy assures investor of freedom to market oil and gas produced from areas they explore. NELP also provided for market determined pricing of both oil and gas. While the government is now identifying customers and nominating quantities to be sold, it is now mandating a price according to a formula given by a committee under Prime Minister’s economic advisor C Rangarajan.

The price of gas according to the Rangarajan formula would have doubled to $8.4 per mBtu in April 2014 when a revision in KG-D6 price is due, but the oil ministry is moving Cabinet with a suggestion made by finance ministry to ask RIL to sell gas it has failed to deliver in past two years at the old price of $4.2.

Reliance Industries Ltd (RIL) said on Tuesday that the government was not honouring signed contracts, and hinted that it may be have to resort to arbitration if forced to supply gas at old prices for commitment shortfall of gas.

Responding to questions on a proposed move by the government to ask RIL to sell gas from its main fields in KG-D6 block at old rates of $4.2 per unit, RIL’s executive director, PMS Prasad, said: “We clearly will say it is violation of PSC. So whatever is the dispute resolution mechanism, we will have to resort to,” he said.

Petroleum minister Veerappa Moily was not available for comments.

Prasad also said the lack of stability in the policy regime was responsible for the exit of global energy giants such as British Gas, BHP Billiton, StatOil and Petrobas from India.

He was addressing repor­ters on the sidelines of a FICCI energy conference on Tuesday. He identified two reasons for the exit of multinational giants: low prospectivity of Indian basins, and fiscal instability.

“You have to compensate poor prospectivity by giving an attractive fiscal regime which we are anyway not giving, and then you take away whatever little was given,” he said. “It is there for everyone to see. We don’t have a stable policy regime which is very essential if you expect any investor to come in and invest either in technology or put in big risk investment required in (oil and gas) exploration, appraisal and development.”

Reliance Industries Ltd (RIL) said on Tuesday that it is evaluating opportunities toward a multi-billion dollar investment on two to three oil blocks offered by Venezuela as it look at countries from Myanmar to Canada to expand its overseas energy assets.

“We are looking at two things in Venezuela. One is, we have a long term (crude oil) supply contract and we are looking at enhancing the quantities under this contract, possibly from next year,” RIL executive director PMS Prasad told reporters on sidelines of a FICCI event.

RIL currently imports about 300,000 barrels per day (bpd) of oil from Venezuela for processing at its twin refineries at Jamangar in Gujarat. It now wants to increase these volumes, possibly to 400,000 bpd.

“The second is, we are also looking at investing in Venezuela. They have given us opportunities for us to evaluate and make a decision,” Prasad said.

Years after it dropped out of a ONGC-led consortium for developing Venezuela’s giant oil fields, RIL is now keen on taking a project to produce heavy oil in the South American nation.

Last year RIL signed a memorandum of understanding with Petroleos de Venezuela, or PDVSA, to develop a project in the Orinoco extra heavy crude belt.

Prasad said the project may involve developing the field and setting up an upgrader to convert the synthetic oil into oil that can be processed in refineries.

Reliance Industries Limited (RIL), on Tuesday, said it was evaluating an investment proposal for two to three oil blocks in Venezuela and was looking at exploration and production opportunities in Iraq, Mexico, Canada and Myanmar.

Addressing reporters on the sidelines of a FICCI conference on energy here, RIL executive director P.M.S. Prasad said there were various options under consideration as regards to Venezuela. “We are looking at two things in Venezuela. One , we have a long-term crude oil supply contract and enhancing the quantities under this contract, possibly from next year. T We are also looking at investing in Venezuela. They have given us 2-3 opportunities for us to evaluate ,” MR. Prasad said. RIL currently imports about 300,000 barrels per day of oil from Venezuela for processing at its facility in Jamangar, Gujarat.

RIL had last year signed a memorandum of understanding with Petroleos de Venezuela, or PDVSA, to develop a project in the Orinoco extra heavy crude belt.

Mr. Prasad also said RIL was looking at opportunities to invest in Mexico, Iraq, Canada and Myanmar but did not elaborate on what assets the company had shortlisted or was looking at for investment.

Unstable policy regime

RIL also hit out at the “unstable policy regime” prevailing in the oil and gas sector in the country, and indicated that it could contemplate legal action if it was forced to pay $4.2 mbtu for the shortfall of gas from KG D6 after the new pricing regime takes shape from April 2014.

“This is the worst thing that can (sic) happen. I don’t know if that is true. If that is true, then that is a problem. We clearly will say it is violation of PSC. So whatever is the dispute resolution mechanism, we will have to resort to,” Mr. Prasad said, when asked what would (RIL) do if it was forced to sell gas at the old price. Mr. Prasad also said the government was not honouring signed contracts and extraneous factors were being brought into business. “The country did not have a stable policy regime and this was responsible for exit of global energy giants like Royal Dutch Shell, BHP Biliton of Australia, Statoil of Norway and Brazil's Petrobras. It is there for everyone to see. We don’t have a stable policy regime which is very important if you expect any investor to come in and invest either in technology or in a big risk investment ,” he said. He said the New Exploration Licensing Policy had been continuously eroded by taking away several rights of the companies.

India along with other Asian gas consumers is working to form a gas buyer's club, head of a state-run gas utility said here Tuesday.

It is being done in view of the global gas market turning into a buyer's market.

"All the major Asian LNG (liquefied natural gas) buying nations are coming together to form a buyer's club," GAIL India chairman B.C. Tripathi said at a conference on India's energy security.

The Federation of Indian Chambers of Commerce and Industry (FICCI) and the external affairs ministry organised the meet.

"Dec 3 when we formally meet to launch the club, GAIL will be chairing the meeting," Tripathi added.

India along with Japan, China, South Korea and Taiwan account for about two-thirds of liquid gas traded globally.

The proposed buyer's club will bring negotiating strength to pricing and other terms, particularly in a situation where prices start rising with increased global demand.

Gas price is currently calculated on a freight-on-board (FoB) basis adding up the price of gas, liquefaction costs, transport, insurance and other charges.

Instead, the gas buyer's club is working to take care of logistics by which they would take cargoes through the shortest distance, thereby saving on costs. Such a change would also enable gas trading among club members through cargo swaps.

India does not offer a stable policy regime for oil exploration companies, said P.M. S. Prasad, Executive Director and Member of the Board of Reliance Industries Ltd, on Tuesday. Prasad was addressing media-persons on the sidelines of the 3rd National Conference on Energy Security, organised by FICCI.

“We do not have a stable policy regime, which is very essential for any investor to come and invest, either in technology or to put in a bid for exploration,” he said.

“There is a continuous erosion of the existing regime – New Exploration Licensing Policy – by taking away several of the rights that were given under the policy. Not honouring the production sharing contract (PSC) is the worst thing that can happen,” said Prasad.

Differences over PSC

Currently, RIL is in arbitration with the Ministry of Petroleum and Natural Gas on matters related to its PSC. The Ministry had threatened to disallow some of the expenditure incurred by the company. This was in the wake of a sharp decline in gas output from the D6 block in the Krishna Godavari basin.

Asked if RIL would agree if the Government doesn’t allow the explorer to increase the price of gas until it fulfils previous commitments, Prasad said: “I do not know if that is true. If it is, then we have a problem. We clearly say this is a violation of PSC.”

Recently, oil regulator, Directorate General of Hydrocarbons (DGH), recommended that an additional penalty be levied on RIL for not producing gas at the expected levels . “We have not been informed of any additional penalty. We are already in arbitration because this is not in line with PSC,” Prasad said.

Venezuela plans

Prasad blamed the policy regime for the exit of many foreign companies, such as British Gas, Shell, StatOil, BHP and Petrobras, that had ventured into India.

“If you see India, so many foreign companies came. They all left. One strong reason is the issue of prospecting in Indian basins. You have to compensate that by giving an attractive fiscal regime,” he added.

RIL itself is looking to venture overseas, evaluating opportunities in Venezuela. “We are looking at two things from Venezuela. First, we have a long-term supply contract and we are looking at enhancing the quantity under that contract, possibly from next year. Second, we are looking at investing in Venezuela,” he said.

RIL already has an umbrella memorandum of understanding signed with a Venezuelan company. Currently, RIL imports more than 300,000 barrels per day. Prasad said that the energy-rich country has given two-three upstream projects, which may be coupled with some downstream options. “In the next few months, we will have to complete our evaluation,” he added.

Talking about other markets where RIL would scout for opportunities, Prasad said Mexico, Iraq, the US, Canada and Myanmar are attractive destinations.

He also indicated that RIL may partner with a Government-owned company for overseas projects.

The Union power ministry’s proposal to vest ownership of coal linkage with power-procuring distribution companies rather than project developers has failed to find favour with industry bodies.

The ministry has brought forth the proposal as part of its review of the model power supply agreement (MPSA) for Case 1 projects (where the power producer is responsible for arranging key physical inputs like fuel). So in the case of termination of the power purchase agreement (PPA) between the project developer and power procuring utility, the latter can take over the allocated coal block or fuel linkage granted to the project.

FICCI has expressed strong reservations over the proposal. “Captive coal blocks are linked to a specific end use project and it will be legally untenable for the coal block to be reverted to the utility after termination of the PPA,” Arbind Prasad, director general, wrote to the ministry.

Association of Power Producers, a body of private power producers, also expressed concern. “By adopting a concessionaire structure, the proposed PPA subverts the basic nature of the supply contract and introduces infirmities,” Ashok Khurana, director general, APP, said in a letter to the ministry.

The ministry is conducting a review of the existing MPSA to grant more flexibility to developers in passing on fuel cost escalation to consumers. The move is meant to make viable power projects facing a fuel crisis.

A demand for the creation of a separate window under the National Clean Energy Fund (NCEF) has been made by the industry. It may provide a boost to the country’s domestic solar energy projects by providing easy access to finance for such clean energy technology, the industry has stated in a FICCI white paper.

The paper on reducing the cost of finance for solar energy projects through NCEF has been submitted to the government for consideration.

The Fund was announced in the budget 2011-12 and is expected to be a step for funding research and innovative projects in clean energy technology. The white paper in essence, suggests innovative models for sharing and distribution of risk and cost of financing through NCEF as the cost of financing from the domestic Financial Institutions is high.

“Given the challenges faced by the solar industry in India due to the high cost of finance, the government’s decision to extend an interest subsidy from the NCEF for enabling lowering the cost of finance for renewable energy projects is a commendable step,” states the white paper.

The paper recommends that the interest subsidy be made available for eligible projects and routed through the lenders to such projects so that borrowers would get lower interest rates for the loans while the lenders directly receive the subsidy. The FICCI Solar Energy Task Force was launched in February 2010, with the launch of Jawaharlal Nehru National Solar Mission (JNNSM) to provide a platform for the solar energy sector to deliberate on policy and regulatory issues and advance interests of the sector at domestic and global platforms.

The document states that since solar energy projects are treated on par and as part of all power sector and categorised under power for categorisation and monitoring of sector exposure, it limits the availability of finance to the sector. Treating solar energy projects under a separate category (say, Renewable Power) or under a sub-limit, similar to RPO norms stipulated by Electricity Regulatory Commissions, will provide the much needed fillip to lending to solar energy projects. In view of the absence of a separate exposure limit to renewable energy, providing a thrust to the sector for creating additional funding mechanisms becomes an imperative.

An interest subsidy could be made available for eligible projects and routed through the lenders to such projects. Thus, borrowers would get lower interest rates for the loans (not a reimbursement) while the lenders directly receive the subsidy. Since number of projects seeking such interest subsidy will be relatively large, some selection mechanism will have to be implemented to select such projects.

One way to select such projects can be in line with the Ministry of New and Renewable Energy (MNRE) scheme for rooftop subsidy, where-in channel partners can directly seek subsidy on behalf of customers. In a similar way, the Concerned Nodal Agency (CNA) can have banks as channel partners where-in Banks would be able to seek interest subsidy directly on behalf of projects. Under such a mechanism, banks acting as Channel Partners would do their own due diligence on the projects before approaching MNRE or the CNA. This will ensure that only quality projects get such an interest subsidy.

Since there are no industry-wide benchmarked interest rates, domestic lenders typically lend on semi-fixed rate, that is, interest rate linked to a base rate which is reviewed from time to time. Such fluctuation in the rate of interest is borne by the borrowers. The lenders may be incentivised to provide fixed interest rate loan for three to five years by providing an additional interest subsidy (for instance, 1-2 per cent per annum higher than the regular interest subsidy). Cost of financing can also be brought down through a guarantee scheme that guarantees a certain percentage of exposure to banks.

Non-performance of this guarantee scheme can be funded through the NCEF. NCEF will need to create a corpus that will act as a backstop determined based on an assumed default rate. To prevent the issue of moral hazard, guarantee can be provided on 50 per cent of exposure to the bank.

The white paper is of the view that interest rates in India are high compared to other countries including developed and other emerging markets such as China. While loans from international organisations are available at a low interest rate, the hedging costs have impeded its utility. While multilateral agencies are willing to lend, they do not want to take the Rupee exposure. In case of floating rate, the hedging cost includes cost of hedging currency and cost of hedging interest rate. Both these costs lead to a much higher effective cost of debt. As a result, a fully hedged loan in foreign currency, for example the US Dollar, becomes expensive. It is suggested that while the fluctuation in the rate of interest in the case of international loans may be borne by the borrower, the currency should be hedged with government support.

To give a boost to domestic solar energy projects, a separate window under the National Clean Energy Fund (NCEF) should be created to provide easy access to finance for such clean energy technology, industry body FICCI has said.

"A FICCI White Paper on reducing the cost of finance for solar energy projects through the National Clean Energy Fund (NCEF) has suggested creation of a separate window under the Fund to enable easier access to funds," a statement said.

A FICCI white paper today suggested creation of a separate window under 'National Clean Energy Fund' to facilitate fund flows to solar energy projects.

The white paper on 'Reducing the Cost of Finance for Solar Energy Projects' suggests innovative models for sharing and distribution of risk and cost of financing through NCEF as the cost of financing from the Domestic Financial Institutions (DFIs) is high as also to take care of the hedging cost due to fluctuations in interest rate and currency exchange rate.

New and Renewable Energy Secretary Gireesh B Pardhan has announced that India’s electricity target through new and renewable energy in the 12th Plan period, especially through solar and wind, has been doubled to 54,000 mw from its current installed capacity of 27,000 mw.

Inaugurating a conference on Energy Cooperation In South Asia, jointly organised by the Federation of Indian Chambers of Commerce (FICCI) and Saarc Chamber of Commerce and Industry here, Pradhan disapproved of the proposal for setting up of a Saarc Regional Grid to cement energy co-operation among Saarc nations. A Saarc Regional grid seems impractical in one go, he opined. Elaborating on the 12th plan target, Pradhan pointed out that by 2017 India would take its new and renewable capacity to 54000 mw. In 2009 India produced energy at an average tariff of Rs 18 a unit which today stands at Rs 7.40 per unit, he noted.

This fall in tariff for solar energy in such a short period has encouraged policy makers to explore greater possibilities to harness solar energy at a faster pace and this is one of the reasons the ministry has revised the target for 2017, he informed.

Earlier, Pradhan released a Saarc Chamber of Commerce and Industry policy paper titled Energy Policy in South Asia: The way Forward to Prompt Regional Trade.

Addressing the conference, Saarc Chamber of Commerce and Industry President Vikramjit Singh Sahney stressed that the Saarc nations should identify commodities of common interest and begin to enhance their trade for mutual benefit. He said that the ongoing move on the Turkmenistan-Afghanistan-Pakistan-India (TAPI) gas pipeline could be a model for public-private partnership (PPP) in mega-infrastructure projects in the Saarc region. India Energy Forum President P S Bami observed that the entire Saarc region is energy deficient and enhancing cross-border trade by permitting accessibility of products of friendly nations would lay the foundations for good relations.

The others who also on the occasion included FICCI Director General Arbind Prasad, SAARC Chamber of Commerce Secretary General Iqbal Tabish and former SAARC Chamber of Commerce and Industry President Tariq Sayeed. The policy paper states that the major energy issues facing south Asian nations are rapidly rising energy demand and the need to promote cross-border energy trade due to energy shortages, usually in the form of frequent, costly and widespread power outages.

The paper stressed that regional cooperation in the form of energy trade and investment is a highly feasible option due to the resources complementarities of the region’s countries.

In July 2004 Saarc had endorsed the concept of an ‘Energy Ring’ of inter-connected energy systems in the region. The policy paper notes that the successful implementation of the idea of of energy ring would provide key benefits to the region such as an end to the persistent energy crisis, enhanced and sustainable rate of growth, and improvement in quality of life of the people.

The Government of India is working on a plan to roll out 3,000 MW of grid connected solar power projects in phase 2 of the Jawaharlal Nehru National Solar Mission.

“The Government also has plans to set up four solar thermal power projects through the Solar Energy Corporation of India,” Mr Tarun Kapoor, Joint Secretary, Ministry of New and Renewable Energy (MNRE), said in a statement.

He said that the Government will also work on 6,000 MW projects through solar-specific renewable purchase obligation (RPO) scheme, and added that the renewable energy certificate (REC) scheme is expected to “catch on from next year”.

Power shortage

“With India’s electricity shortage estimated to be 25-35 GW, the Ministry’s emphasis will be equally on the grid connected as well as the off grid applications,” Mr Kapoor said.

“It is important to have an effective and robust rooftop policy with enough incentives to boost rooftop solar energy implementation in India, similar to Germany,” he added.

Mr Kapoor was speaking at ‘Destination India: Investment Opportunities for Solar Energy’ organised by FICCI during Intersolar Europe 2012 conference in Germany on Tuesday.

Intersolar Europe

The visit to Intersolar Europe will create linkages between Indian companies and their global counterparts and would help them in developing a platform for technology transfer, joint-venture initiatives and create investment opportunities for companies in both countries, the statement said.

According to the statement, the Indian industry and the Government feel that enhancing market access and collaborating with international counterparts will help build a strong base for augmenting solar power generation.

Mr Fida Hussain, CEO of J&K Energy Development Agency (JKEDA), said “J&K has been a leading state in solar energy application under Remote Village Electrification/General Category/and Solar Lantern schemes to Gujjar and Bakkarwal communities with electrifying almost more than 80,000 households under off grid solar energy application.''

About 2-MW capacity solar power plants have been installed and 3-MW solar power plants are coming up in Jammu and Kashmir including the Ladakh region, besides 10-MW mini hydro projects being implemented by JKEDA on IPP mode.

According to the FICCI statement, Mr K. Subramanya, Chairman of FICCI Solar Energy Task Force, said that due to sectoral cap, funding for solar energy projects has been a challenge and requires innovative ways of funding solar energy projects such as solar bonds.

The Centre has put in place an enabling legal, regulatory and policy framework to promote market-based energy efficiency in the country and the focus now is on implementing schemes aimed at reducing the energy intensity of the economy.

Speaking at a national seminar organised by FICCI here on energy efficiency, the Union Power Minister, Mr Sushilkumar Shinde, said: “Energy efficiency across all sectors of the economy is essential for decoupling growth in energy demand from economic growth, while ensuring that India's energy demands are managed efficiently.”

The need of the hour, he said, is to have a more vigorous and focused national awareness campaign to meet the desired objective of reducing the energy intensity of the country.

Bachat Lamp Yojana

He also informed the that the Bachat Lamp Yojana is the world's largest Clean Development Mechanism (CDM) project to get approved by the CDM Executive Board of UNFCCC at Bonn, Germany.

According to the scheme, BEE plans to replace 400 million incandescent bulbs with energy efficient CFLs across the country that will cost the consumers Rs 15 a piece.

The replacement of incandescent bulbs by CFLs would lead to a potential reduction of over 6,000 MW in electricity demand.

Stating that rapid economic growth and industrialisation were the major challenges that need to be met head on, Union Power Minister Sushilkumar Shinde said power generation capacity addition during the XI Plan would be about 74,000 MW, almost close to the original target of 78,577 MW.

“With best efforts, we would add about 12,000-13,000 MW power generation capacity over the likely addition of 62,000 MW in the current Five-Year Plan. This would be at 74,000 MW near to the original target of electricity generation capacity of 78,577 MW,” Mr. Shinde said at the ‘National campaign for energy efficiency and conservation' organised by Federation of Indian Chambers of Commerce and Industry (FICCI) here on Wednesday.

In its mid-term review, the Planning Commission had reduced power generation capacity addition target by over 20 per cent to 62,374 MW for the current Plan period from the original 78,577 MW. The Plan panel had stated that “It is anticipated that additional power generation capacity of 45,234 MW can be commissioned during the remaining period of the XI Plan, noting that 19,207 MW of capacity was added till December 31, 2009,” he added.

During the X Plan, 21,080 MW was added against the target of 41,000 MW.

The Minister said “the CDM (clean development mechanism) executive board has approved our ‘Bachat Lamp Yojana' under which incandescent bulbs are replaced by energy-efficient CFLs at a cost of Rs. 15 only.” The CDM is an international organisation for approval of carbon credit projects under the United Nations Framework Convention on Climate Change. The replacement of all incandescent bulbs in the country is expected to result in a saving of 6,000 MW of power.

The Power Minister said the Government had put in place an overarching legal, regulatory and policy framework to promote market-based energy efficiency.

The Government proposes to replicate the Solapur model for the implementation of the Agricultural Demand Side Management (DSM) programme all over the country. The model that seeks to replace about 3530 inefficient agricultural pumps will result in a saving of 88 lakh units of power annually, Sushilkumar Shinde Minister for Power disclosed here today.

Speaking at a FICCI conference on energy efficiency, Shinde said, "The agricultural DSM programme promises immense opportunity in improving ground water extraction and reducing the subsidy burden of the states without sacrificing the service obligation to the agricultural sector."

The Power Minister said that the first such project under implementation was in Solapur in Maharashtra. The project cover 3530 agricultural pumps connected on five feeders.

Farmers will be provided new Bureau of Energy Efficiency (BEE) Star labeled energy efficient pumps and motors free of cost. Furthermore, nothing would be charged for the implementation of the scheme. He said that this intervention will lead to lower energy consumption on the rural feeders with improved quality of supply and thus result in lower subsidy to be paid by the State Government. Part of the savings in subsidy will be used to pay back the investment made by EESL in providing new BEE Star labeled energy efficient pumps.

The Minister said that to achieve a sustained GDP growth of 8-9 per cent through 2031-32, and to meet the lifetime energy needs of all citizens, India would need to increase its primary energy supply by three to four times and its electricity generation capacity by nearly six times.

"With more efforts in tow, we would add about 12,000-13,000 MW power generation capacity over the likely addition of 62,000 MW in the current five-year plan. This would be at 74,000 MW near to the original target of electricity generation capacity of 78,577 MW," added the Minister.

Moreover, he said that the demand for energy will keep increasing because of accelerated industrialization, urbanization and an emerging consumer society. Consequently, energy efficiency across all sectors of the economy was essential for decoupling growth in energy demand from economic growth while ensuring that the energy demands are met.

India's per capita consumption of energy is among the lowest - less than one third of average world consumption and less than one tenth of average consumption in the US - making a strong case for huge investment in the energy sector, power minister Sushil Kumar Shinde said on Wednesday.

In 2006, the per capita consumption of energy was 510 kg of oil equivalent of primary energy compared to 7,740 in the US and the global average of 1800. Shinde was speaking at a seminar on energy efficiency organised by the Federation of Indian Chambers of Commerce and Industry (FICCI). "To achieve the lifetime energy needs of all its citizen, India needs to increase its primary energy supply by three- four times and its electricity generation capacity by six times," Shinde said.

According to him, there is need to boost energy efficiency and this market is estimated to be around Rs 74,000 crore under the National Mission on Enhanced Energy Efficiency.

Cooperation in the fields of renewable energy and increasing energy efficiency would continue to be priorities in Indo-German development cooperation, German President Horst Kohler said on Tuesday at a business session jointly organised by the Confederation of Indian Industry (CII), Federation of Indian Chamber of Commerce and Industry (FICCI) and the Indo-German Chamber of Commerce (IGCC). He, however, stressed that climate protection can work only with binding and verifiable rules for everyone.

Kohler also emphasised the co-operation between the two countries in the scientific sphere, and announced the setting up of two new centres of science and technology. “Tomorrow, we will inaugurate the Indo-Max Planck Institute for Computer Sciences,” he said, adding that “the establishment of a German House of Science and Innovation in New Delhi, under whose roof German institutions will come together and present themselves as partners for the future is imminent.” The Max Planck Institute will be launched at IIT, New Delhi, to carry out cutting-edge research in computer science.

President, FICCI, Harsh Pati Singhania, said he expected trade between India and Germany to expand to 20 billion euros by 2012. “Germany is India’s third largest trading partner, so German capital and technology will be big areas of interest for India,” he said.

Sharing concerns of India and other developing countries, Germany today opposed increasing protectionist measures taken by some countries in response to global financial crisis.

Addressing Indian businessmen here, German President Horst Kohler said the world community has to enhance their efforts to counter protectionist tendencies. "The world must continue to take decisive action to counter such (protectionist) tendencies," Kohler said at the function organised by industry body CII and FICCI.

Without naming any nation, Kohler said that many countries are adopting protectionist approach to stem the global financial meltdown. The President's comments, incidentally, coincide with US President Barack Obama heightening the pitch to protect American jobs in the wake of employment losses due to outsourcing to developing countries like India.

The German President said: "We saw, how in many countries protectionist tendencies increased as a reaction to the (global financial) crisis, even though this will ultimately be to the detriment of everyone". Following the collapse of Lehman Brothers that deepened the global financial meltdown in October 2008, many developed countries turned cautious and some have even adopted protectionist steps to safeguard their economies.

Last week, President Obama had said that it was time to end tax breaks to American firms that outsourced jobs abroad, while helping those that created employment within the US.

India and several emerging economies like Brazil have raised concern over protectionist measures in the West, especially after the global financial crisis. Kohler, who would also travel to Mumbai and Pune, is on a six-day visit to India. Trade between India and Germany stands at about $19 billion in 2008-09.

Prime Minister Manmohan Singh on Monday called for creation of “solar valleys” in India, akin to the Silicon Valley, as a contribution to the national as well as global efforts at combating climate change.

Launching the Jawaharlal Nehru National Solar Mission or ‘Solar India,’ Dr. Singh said its success could transform India’s energy prospects.

Terming industry’s role in the mission critical, he said the mission planned to create an installed capacity of 20,000 MW by the end of the 13th Plan. “If the mission is to become a reality, we will have to create many solar valleys on the lines of Silicon Valley that is spurring our IT industry across the country,” Dr. Singh said. He was addressing about 900 delegates at the Solar Energy Conclave 2010, organised by the Ministry of New and Renewable Energy and the Federation of Indian Chambers of Commerce and Industry.

Noting that these valleys would become hubs for solar science, engineering and research and fabrication and manufacturing, he urged industry to see the mission as a huge business opportunity.

Referring to Jawarharlal Nehru’s vision of creating world class capabilities in atomic energy and space sciences, Dr. Singh said it was these strengths that brought about the IT revolution and made India a global player. “I am convinced that solar energy can be the next scientific and industrial frontier in India after atomic energy, space and IT.”

Though the mission’s target of 20,000 MW was ambitious, it was achievable. The various Ministries and authorities would have to work in tandem to make it a success. He hoped that the mission would also establish India as a global leader in solar energy, not just in power generation but in manufacturing and technology.

“We intend to significantly expand various solar applications through the mission. The regulatory and incentive framework would encourage technological innovation and generate economies of scale and lead to a steady lowering of costs.” Union Minister for Agriculture Sharad Pawar, Minister of New and Renewable Energy Farooq Abdullah and Minister of State for Environment and Forests Jairam Ramesh were present.

In a bid to accelerate India’s efforts to meet its emission reduction targets and combat climate change, Prime Minister Manmohan Singh has called for the creation of “solar valleys” across the country and asked private investors to view the National Solar Mission as a business opportunity.

“If the ambitious rollout of the mission is to become a reality, we will have to create many solar valleys, on the lines of silicon valleys, which are spurring our information technology (IT) industry across the four corners of the country,” Singh said.

He added that these solar valleys would become hubs for solar science, engineering and research, fabrication and manufacturing.

National Solar Mission is one of the eight missions under the National Action Plan on Climate Change and aims at setting up over 20,000-Mw solar power generation capacity in three stages by 2022, the end of the 13th Five-year Plan.

Singh was speaking at the launch of Jawaharlal Nehru National Solar Mission — Solar India. Agriculture Minister Sharad Pawar, New and Renewable Energy Minister Farooq Abdullah, Environment and Forests Minister Jairam Ramesh and Planning Commission Deputy Chairman Montek Singh Ahluwalia, among others, were also present on the occasion.

Calling the mission a priority national endeavour, and its target “ambitious yet doable”, the prime minister urged the Indian industry to see the mission as a “huge business opportunity”.

He also expressed hope that the solar mission, when achieved, would improve the country’s energy prospects and contribute to efforts aimed at combating the climate change threat. “This mission is one of the major priorities of our government in its second term,” he said.

To make solar power competitive vis-à-vis other sources of energy, the Jawaharlal Nehru National Solar Mission – Solar India envisages an investor friendly mechanism which reduces risk and provides an attractive as well as sufficiently extended tariff for solar power offtake.

The Mission, formally launched by the Prime Minister, Dr Manmohan Singh, on Monday, has designated the trading arm of NTPC, NVVN (NTPC Vidyut Vyapar Nigam), as the nodal agency to procure solar power, at a tariff fixed by the regulator, Central Electricity Regulatory Commission (CERC) for the first three years, the Minister for New and Renewable Energy, Mr Farooq Abdullah, said.

NVVN, in turn will bundle four units of thermal power with each unit of solar power to bring down the final cost to around Rs 5 per unit or Rs 5.5 per unit. Currently, the cost of electricity generation from solar thermal and solar photovoltaic energy systems is Rs 13.45 and Rs 18.44 per unit respectively.

Compared with this the cost of power from thermal projects including coal and gas-based stations ranges from Rs 3 to Rs 7 per unit. NTPC's average selling price was Rs 2.12 per unit till March 2009.

To promote solar energy in areas such as island States and border areas, Mr Abdullah said, “We propose to provide up to 90 per cent support for setting up solar power plants. In many other solar applications, where the initial cost is still very high, we're considering proposals for providing up to 30 per cent grant in aid.”

The Prime Minister, while stating that the target of 20,000 MW of solar generating capacity by the end of 13 {+t} {+h} Five-year Plan (by 2022) was ambitious, said “but I believe that the target is doable and that we should work single-mindedly to achieve it as a priority national endeavour.”

The aim of the Solar Mission is to make solar power competitive with conventional grid power. Within next three years the plan is to add 1,300 MW of solar power out of which 1,100 MW will be grid connected and 200 MW will be off-grid.

The Mission anticipates achieving grid parity by 2022 and parity with coal-based thermal power by 2030. By 2022, the aim is to install 20 million sq mt solar thermal collectors in the country and save about 7,500 MW power generation capacity.

Prime minister Manmohan Singh on Monday mooted setting up solar valleys in India on the lines of information technology-driven Silicon Valleys in all four parts of the country.

Solar valleys will be evolved into hubs for solar sciences, solar engineering, solar research, fabrication and manufacturing that will have long-lasting impact on the country’s rural economy. Singh on Monday launched the ambitious Jawaharlal Nehru National Solar Mission – Solar India, which envisages 20,000 mw of solar capacity by the end of thirteenth five-year plan. He said that technological innovation would be a key factor in ensuring the mission’s success.

“We will need to find ways of reducing space intensity of present solar applications, including use of nano-technology. Cost-effective and convenient storage of solar energy beyond daylight hours will be critical to its emergence as a mainstream power source. In the meantime, we may need to explore hybrid solutions, combining solar power generation with gas, biomass or even coal-based power”. Singh has billed development of solar power capacities as the next big thing after information technology, atomic energy and nuclear energy development that have been put on track, and asked India Inc to look at it as a big business opportunity. The mission, with an investment of Rs 4,500 crore, will be implemented in three phases.

Three major initiatives have been planned under the policy including creating volumes that will allow large-scale domestic manufacture, long-term policy to purchase power and support research and development to reduce material consumption, improve efficiency and develop new materials and storage methods. Solar energy mission is one of the eight national missions that comprise India’s national action plan on climate change. It has the twin objectives of contributing to India’s long-term energy security and ensuring its growth in an ecologically sustainable manner, said Farooq Abdullah, minister for new and renewable energy. The focal point, for the next three years, will be the NTPC Vidyut Vyapar Nigam (NVVN), the power-trading arm of government-owned NTPC.

NVVN will purchase solar power at rates and timelines fixed by the Central Regulatory Electricity Commission (CERC). When the state utilities purchase solar power from NVVN they will get equivalent thermal power from the NTPC trading arm.

Singh said bundling of more expensive solar power with cheaper thermal power will enable a much cheaper tariff for the consumer, estimated at about Rs 5 or less per unit.

The PM has set a target of installing 20 million square metres solar thermal collectors by 2022 and save about 7,500 mw power generation capacity.

In addition, 20 million solar lights are to be installed by 2022 that would lead to a saving of one billion litres kerosene every year.

As part of efforts to combat climate change, PM Manmohan Singh advocated creation of Solar Valleys in India on the lines of Silicon Valleys and asked industrial houses to view the Solar Mission as a huge business opportunity.

Launching the Jawaharlal Nehru National Solar Mission “Solar India”, he said its success has the potential of transforming India’s energy prospects, while contributing to national as well as global efforts to combat climate change.

The role of industry in this mission that set an ambitious target to generate 20,000 MW of solar generating capacity by the end of 13th Five Year Plan, would be critical.

“Eventually, if the ambitious roll out of the Mission is to become a reality, we will have to create many Solar Valleys on the lines of the Silicon Valleys that are spurring our IT industry across the four corners of the country,” Singh told the gathering which included Union ministers Sharad Pawar, Farooq Abdullah and Jairam Ramesh.

Noting that these valleys would become hubs for solar science, engineering and research, fabrication and manufacturing, the PM urged Indian industry to see the Solar Mission for the “huge business opportunity that it is”.

Referring to Jawarharlal Nehru's vision to create world-class scientific and technological capabilities in the atomic energy and space sectors, he said it was these strengths that created the Information Technology revolution in the country and made it a global player.

“I am convinced that solar energy can be the next scientific and industrial frontier in India after atomic energy, space and IT”, he said. Singh said though the Mission’s target of 20,000 MW was ambitious, it was “doable and we should work single-mindedly to achieve it”.