“It’s a sensible business to take out to market,” said Ratul Puri, chairman of the New Delhi-based developer of coal, solar and hydropower plants, formerly known as Moser Baer Projects Pvt. The unit has a pipeline of projects that will require $1 billion of investment within the next two years, he said, although the company has “no immediate need for cash.”
Rising coal prices have pushed electricity rates in India up by 40 percent on average since 2010, making solar cheaper for commercial consumers in Delhi and Mumbai compared with electricity from the grid, according to Bloomberg New Energy Finance. India, which had virtually no solar power three years ago, plans to attract $11.7 billion of investment by 2017 into the industry to reduce costly fuel imports.
It may still be “too early” for solar developers to go to market, said Madhavan Nampoothiri, founder of Chennai-based RESolve Energy Consultants, without specifically referring to Hindustan Powerprojects. “We need more good quality projects on the ground to give confidence about the performance of plants and the expected long-term returns.”
India could add a further 2 gigawatts of capacity by 2016 to the 2.6 gigawatts installed currently, according to RESolve Energy’s Nampoothiri. Obstacles include the possibility of anti-dumping duties on equipment imports and project failures due to overly aggressive bidding by developers, he said.