INTERVIEW
INTERVIEW
INTERVIEW WITH MANISH CHOURASIA
MANAGING DIRECTOR( MD), Tata Cleantech Capital Ltd.
EQ: What is the likely impact of Demonetization on the Indian solar and renewable energy industry?
MC: In India, solar and other renewable energy projects are highvalue big ticket investments carried out by the organized sector and hence we do not see any major impact. While we anticipate minor delays in land acquisition and project implementation in the short-term, we do believe that demonetization is good in the long run since it will reduce the cost of capital, which is the major cost in renewable energy projects. Also, there might be an indirect effect of channeling money into big solar projects due to the tax benefit of accelerated depreciation offered. This could indeed provide a boost to the sector in the short to medium term.
EQ: How is the road ahead for the global and American renewable industry following the victory of Donald Trump in the US Elections? What impacts might it have in the Indian solar energy market?
MC: President-elect Donald Trump’ s comments suggest that he might choose to move away from Obama’ s Clean Power Plan and the Paris Agreement, which has already seen a negative impact on the stock prices of some US solar companies and an uptick in coal stocks. Having said that, Donald Trump was, ahead of the Copenhagen Climate Summit in 2009, a co-signatory to a letter to Obama which pointed out that clean energy technologies would spur economic growth, create new energy jobs and increase energy security.
In the long run, we expect technological advancements in storage of power, efficiency in power generation etc. to more than compensate for any short term pain and believe that renewable energy could actually become more economical than fossil fuel based power leading to significant disruption in energy markets.
Many US / global renewable energy giants operate in India, as both asset owners and suppliers. Any move on the Government’ s part to curb renewable energy projects in the US might impact their Indian operations as well. But we believe that the projects being set up in India are commercially viable on their own, considering a fixed tariff model against the escalating tariffsin fossil fuel based projects. Hence these projects might be able to sustain in the medium to long term, once the equity is in place.
We do not expect any policy changes made by Donald Trump to impact the Indian Government’ s stance on renewable energy sector and hence, do not see an immediate regulatory risk posed by the US election result.
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EQ December 2016 www. EQMagPro. com