Opportunities knocking.

Private sector was holding there investment until the conclusion of Copenhagen conference. As the future investment in clean technology was heavily dependent on the outcome of the 15th Conference of Parties (COP 15) to the UN Framework Convention on Climate Change (UNFCCC), private sector was anxious to hear the target world leaders would have committed to and the mitigation actions developing countries would have to take.

Prior to the conference major of the countries proposed plans and targets to further reduce their emissions; however, all of those plans were contingent on reaching an international agreement.

With no concrete conclusion deriving of the conference and many developing countries having an opinion that climate change is a moral issue, caused by developed countries and it should be solved at their cost, the counter argument was that developing countries are causing greater extend of damage to the climate due to faster industrialization and deforesting, so owners are with them.

Every one from the industrialist to governments might be relaxed as of now and relaxing on there chairs because if any concreate decision would have arrieved at Copenhagen conference then they could have been in trouble to comply with those commitments. But this is not the time to push back to our seats and relax, instead this is a time to make strategy, (What is strategy : Strategic is nothing but being different in the context one is operating).

This a opportunity knocking at the doorsteps for People/entrepreneurs who are interested in cleaner energy, people who are farsighted and can see the benefits of implementing a Cleaner energy project at this juncture, I Consider this as Value Investing and the investment made today will reap immense profit in the coming future.


Wind, not the sail determine the way we go…

Image source: farmersguardian.com

Value Investing

Value investing is all about spotting the areas/ players which can yield better results in the near future but as of now today those areas/ players are low valued. Based on the same priniciples I found Wind energy segment worth focusing.

Looking at the commitment we as a country have in terms of reducing the carbon emission, Wind power project are turning to be a lucrative investment avenues and to add more government is announcing more perks in terms of tax holidays, commitment of purchasing power generated and flexible tariff. (Refer Govt to give incentive to wind power producers.)

Fossil fuels are the source for 70% of 90,000 MW installed capacity for electricity generation, Hydro-electricity contributes about 25%, and the remaining is mostly from nuclear power plants (NPPs).

Current stocks of Fossil fuels in India are not sufficient enough to suffice our needs of power (about 70% oil is imported), with currency getting dearer and government imposing emission norms (It is accepted that Indian power plants are highly polluting Refer CO2 emission by Indian power plants increases) the cost of per unit of power generated through fossil fuel will be compatible with non-conventional energy.

So I believe this is the right time to do a Value Investing and initiate a Power project that is eco friendly having early breakeven and having subsidiary projects of livestock farming, organic farming and carbon credit trading.

Image source: http://www.cedarcapital.ie/

Incentives to wind power project

In my previous article “Copenhagen before and after” I have mentioned the perks Government will be taking in the immediate future to promote non conventional energy.

Today only I came across news in business standard stating that

Government will give 50 Paisa as incentive for a unit of electricity generated by wind power producers for 4-10 years, this sop will be given under the government's generation-based incentive (GBI) for grid interactive wind power project.As per the GBI scheme, incentive will be provided to wind power producers at 50 paise per unit of electricity fed into the grid for a period not less than four years and the maximum of 10 years.

In India the installed capacity of wind energy project is approximately 10000 MW and India is ranked 5th in terms of installed wind power capacity. There is still huge potential and far away from exhausted. According to Indian Wind Energy Association The unexploited resource availability has the potential to sustain the growth of wind energy sector in India in the years to come. During the financial Year 2008-2009 around 1465 MW has been added to the total Indian wind power. (Figures are rounded off)

India has a lot to do in terms of projecting the growth of non conventional energy and allowing entrepreneurs to set up wind power projects. On the other hand our neighbor, China has more than tripled its target for wind power capacity to 100 giga watts by 2020, likely making it the world's fastest growing market for wind energy technology.

The other problem entrepreneurs like me feel is about financing of the projects. I have a project report ready with me for a power project (non conventional) but not able to find a venture capitalist to fund the project. Any power project requires high power (money power) as an input to yield real power (electricity) & Profits. After the slowdown not a single VC’s have ventured in this sort of project because of the obvious reason “high investment”.

But I’m sure that I will be able to find a VC for my project as government is already working with lot of sops in terms of tax holiday’s, lower interest rate loans and fixing the tariff. These initiatives will open new avenues to VC’S and dreamer like me

Wind, not the sails determine the way we go..."

Copenhagen Before & After

Before Copenhagen meet Indian government projected a 20-25% reduction (From year 2005 level) in carbon emission by the year end 2020 under the U N framework, even though this commitment is not presently quantified. It is anticipated that Indian foreign policy has to face immense pressure from the international community to have quantified limitation or reduction commitments.

Developing countries have a parallel market for carbon trading among them with potential to implement it, especially among India and china, who are the largest sellers of carbon credits and Japan which is the largest buyer of the carbon credits

At the moment, India has drawn up a National Action Plan on Climate Change, which includes increasing solar power generation and other non conventional energy resources and improving energy efficiency.

To bring down carbon emission at the national level government will have to promote non conventional energy projects and plantation immensely and will be offering high incentives on the same. At present, India is largely agriculture and service sector based economy (which is low carbon intensive) but is expected to grow in manufacturing sector (which is high carbon intensive). And this growth might experience difficulties as a result of the new target.

Image source: heatingoil.com