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Read an interesting article in the Business Line today on SAIL (Steel Authority of India Limited) exploring options to float joint ventures with “green” power producers to meet its renewable energy commitment.

I guess you could replace the name SAIL with ONGC, BHEL, NTPC and more, and the news item could be true for all of them. It will be interesting to see what type of ventures they are going forward with. Well, before that, the question I have is: “why joint ventures at all? why not on their own?”. If NTPC could install and manage tens of thousands of MW of power (31500 MW on its own), why can’t it own and operate a few hundreds of MW? Just curious…

Turning back to the RPOs, the Business Line news article went on to mention that SAIL has about 600 MW of captive production using conventional sources. It is expected to source about 5% from renewables. Now, the question is, will that be 5% of capacity or 5% of total generation? I was sure it was generation (in kWh or MWh…) and to be sure, did a bit of googling, and yes, it is in terms of generation. This means that, were SAIL to have 5% from renewables, it should have a minimum of 30 MW of green power capacity (because conventional power plants have some of the highest PLFs), but more likely 50+ MW, assuming solar PV and wind are part of the mix (both have efficiencies/PLFs less than 30 % – 25% for onshore wind and 17/18% for solar PV, 22% max for solar CSP).

The news report informed me that SAIL had already invited expression of interest from both domestic and global green power producing firms for the joint venture. This should interest a lot many entrepreneurs.

The other opportunity opening up for entrepreneurs owing to the RPO mandate is the possibility of third party sale of green power. While captive power consumption and power to grid are two routes that have been commonly utilised so far, third party sale of green power had not taken off in a big way as the industries had not bothered about purchasing pricey green until now…Of course, the future is going to be different…(I even found a cute little Wheeling Agreement Document for Third Party Sale of Green Power for RECs from the TN govt – talk of being proactive!)