Renewable Energy Sector: A Lucrative Offer for SMEs
India was the one amongst the earliest country to have set up a ministry overlooking Non Conventional Energy resources in the 1980s. India has progressed in having the largest and ambitious expansion programs in the world regarding renewable energy capacity. As of 2020, 35.86% of India’s energy generation capacity installation is from renewable sources. India at the Paris Agreement has committed to an Intended National Determined Contributions target of achieving near to 40% of electricity generation from non fossil source by the end of 2030.
The Govt. of India has set a target of installing 175 GW of renewable energy capacity by the year 2022, which includes 100 GW from solar, 60 GW from wind, 10 GW from bio-power and 5 GW from small hydro-power. With demand for energy commodities being dropped by 25-30% (estimates for India by KPMG) during the lockdown, there has been plant closures and inventory pile up. This situation should ease up as lockdown restrictions lift and end-use industries start producing again.
With imports from China being restricted and Govt. pushing the Make in India initiative to the forefront, India has the capability to boost its domestic industry space and support SMEs entering this space. At the recently concluded United Nations Climatic Change Conference, India committed to generate 175 GW of power from renewable sources of energy. This initiative has immense economic implications and for the growth of MSMEs with huge support from the government.
Service activities along side with manufacturing business such as design, erection, commissioning, metering, maintenance, and others. The value chain partners will comprise of a large number MSMEs making and supplying parts, components, panels, enclosures, and subsystems, providing technology and on-site services, developing application programming interfaces, and such others.
Sensors, actuators and devices embedded in homes, hospitals, power grids, civic facilities, cars, transportation vehicles, ambulances, heart monitoring implants, biochip transponders on farm animals, and similar others, that will facilitate autonomous operation of cities will need capable laboratories and research facilities which is a luring area for SMEs. With the huge dependence of technology these research centres will be occupied with innovative ideas for a foreseeable future.
Power generation from renewable energy will also lead to digital technology involvement fro smart city formation. This digital ecosystem will provide a huge fertile ground for SMEs to enter as manufacturers, service and network providers along with software and application developers.
India is finally focusing stimulus money on strategic investments not just for Renewable Energy (RE) but for batteries, key to both EVs and high penetrations of RE. India will find the funding and the instruments to pay for cleaning up emissions from coal power plants as they are critical in running plants and electricity. These are areas where government urges the SMEs to open business.
Indian Railways is taking increased efforts through meticulous sustained energy efficient measures and maximum use of clean fuel to cut down emission level by 33 per cent by 2030. The Government of India has announced its plans on implementing a US$ 238 million National Mission on advanced ultra-supercritical technologies for cleaner coal utilization. SMEs can expect full support on setting up industries pertaining to clean coal utilization or development of much cleaner energy sources for the railways.
It is expected that by 2040, around 49 percent of the complete electricity will be created by sustainable power source, as more productive batteries will be utilized to store power, which will additionally reduce the sunlight based energy expense by 66 percent when contrasted with the current cost. Use of renewable energy instead of coal will spare India Rs 54,000 crore (US$ 8.43 billion) annually. Sustainable power source will represent 55 percent of the complete introduced electricity limit by 2030. With the global craving changing for less expensive deflationary sustainable power source innovations, and with more than 130 internationally significant banks and monetary establishments resolving to divest their assets from the petroleum derivative segment, the time has come to make India an alluring venture opportunity, and in this manner, construct a solid economy with economical energy choices. In fact, India is emerging as a global startup hub with many of the startup companies attracting venture capital funding.