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No, the title has nothing to do with Sonia Gandhi.  It is literally a more electrifying connection that Italy is keen to have with India.

I spent the last week in the pleasant city of Milano (Milan), the financial capital of Italy. I was there because the nice folks from Agici Finanza d’Impresa (http://www.agici.it/ ), a research firm with a specialization in the utilities sector, had invited me to be the keynote speaker at an event organized by them and AssoLombarda (http://www.assolombarda.it/ , a confederation of industries comprising over 6000 companies in the Milan province) to promote Italian investments in the Indian renewable energy sector, especially renewable power.

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For someone who had never been to Italy, it was an excellent opportunity to understand more about the country from an energy and cleantech perspective. In addition to the day I spent talking at the seminar and interacting with the audience, I spent a couple of days travelling around Italy and interacting with some medium sized companies in the renewable energy industry. Overall, I must say it was a great educational tour.

Italy and India – So Far Apart, Yet…

On the face of it, Italy and India do not appear to have a lot in common. Italy’s per capita GDP (nominal) is about $34,000, while India’s is about $1250. An average Italian consumes about nine times as much electricity as an Indian does (if you thought that was high, the average American consumes more than twice the electricity that an average Italian does!). Few people in Italy speak English well, and even fewer Italians know much about India. And on a personal note, Italy was a world apart for a strict vegetarian like me, because most everything eaten in Italy contains meat – I got so suspicious I even started inquiring about the contents in the bread I ate!

But enter the Italian renewable energy market, and you suddenly find a lot of attention to and mention about India. Of the dozen cleantech companies I met during my short stay there, what stood out was the extent to which they wished to know about India. This was reflected in the amount of micro details they wanted to know about the Indian energy and renewable energy segment – I even had questions as micro as “how long would it take to recruit maintenance engineers for a wind turbine gearbox manufacturer?”

I perhaps should not have been surprised, for there are key drivers that will make Italy look at India as a key destination for their cleantech products:

  • Small market (Italy has a population of 60 million) vs large domestic market
  • High cost labour (median annual salary in Italy is about $35000) vs. low cost labour
  • Developing countries have a far higher electricity demand-supply gap than do developed countries and thus a more urgent need for renewable power sources (I was in fact told that Italy’s electricity installed capacity was far higher than what the country required, though I am not able to confirm this tidbit)
  • Abundant availability of skilled labour
  • Significant opportunities to make inroads into large untapped markets for a range of renewable energy products and services (well, actually not just renewable energy, but extends to other cleantech domains such as energy efficiency, waste heat capture etc).

Italy’s Renewable Energy Status

Europe has been a front runner in renewable energy promotion and technology development, with Germany being the real leader. But Italy has not done badly.

Officially, Italy had a total solar PV installed capacity of about 3000 MW installed capacity end of 2010. But if one were to take into account the amount of capacity that has been almost implemented but not come online owing to paperwork, the total installed capacity could go up to 7000 MW. That’s a significant amount of solar PV (the world’s total installed capacity was only 38 GW by end of 2010). Germany is the leader in European (and global) PV, with an installed capacity of 16 GW, with Spain being the second largest in Europe, with about 4 GW. Italy could hence be considered to be among the leaders in solar PV power production.

While in the past few years solar PV has hogged the limelight for Italy, Italy has done well in other realms of renewable energy too. It has an onshore wind capacity of about 5.8 GW, biomass power of 1.9 GW, geothermal installed capacity 0.75 GW, and small hydro of 2.5 GW (the largest in European region). Italy is also undertaking some serious efforts in offshore wind. A nice PDF on Italian renewable energy market here – http://www.erec.org/fileadmin/erec_docs/Projcet_Documents/RES2020/ITALY_RES_Policy_Review_09_Final.pdf ).

Italy’s specific expertise in the renewable energy stems from its skills at component and OEM manufacturing. For instance, there are two companies from Italy already operating in the Indian renewable energy industry – Bonfiglioli (for wind turbine gearboxes and recently for solar PV grid connected inverters) and Leitner (for permanent magnet based wind turbines). Further, inverter manufacturer Santerno is waiting in the wings, and so is the solar module machinery maker Ecoprogetti.

Interest in Indian Renewable Energy Sector

The folks who were keen on India however were not restricted to components/OEM companies alone. There were project developers, EPCs, and even bankers. Some of the prominent sectors that were quite interested were:

  • Solar PV (both grid connected and offgrid) – both developers and component/component machinery makers
  • Small hydro – from companies providing innovative technologies/designs for small hydro power
  • Components for wind energy
  • Waste to energy
  • Energy efficiency
  • Biogas production

Some companies were interested in both providing their products and services to the fast growing Indian renewable energy market, while others were more interested in setting up manufacturing bases in India. These companies are keen to talk to both consultants like us to understand the market and to corporates and businesses in India to explore partnership possibilities.

Interested?

All in all, it was a hectic but a very useful trip that motivated me to learn more about Italy as a country and specifically about its renewable energy landscape.

Should your company be interested in either entering the Italian market for renewable energy/cleantech products or services, or should you be interested in partnering with Italian firms in bringing their products/technologies to India, do send me an email (narsi@eai.in ).