Sam Cherian, Chairman, Elmeasure India Private Limited, thinks aloud about the implications of the massive Chinese investments in India.
Elmeasure India Private Limited
Ems software , demand monitor, demand controller
China usurps the US and is the world’s largest investor in the renewable energy sphere. Now, it looks at the fat cats of rich renewable energy resourced countries like India. "China is eager to combat India" being the global hot topic, the Indian army chief says, we must prepare for simultaneous war with China and Pakistan, and on the other hand, whoever won in Doklam, India has lost the equity edge to China.
While it is planning through many routes, here is the plan towards power grid!
The Dream of China!
China invested a record US $32 billion in global renewable energy projects during 2016 and is expecting to invest at least US $361 billion into its own renewable energy sector by 2020, securely placing China as the leading clean energy player in the world.
Highlights from the report provided by the IEEFA
China’s impressive drive into renewable energy (RE) has made it the world’s largest investor in clean energy with US $102.9 bn invested in renewables (excluding large hydro) in 2015, up 17% over 2014. According to the report by the Institute for Energy Economics and Financial Analysis (IEEFA), this represents well over 1/3rd of global investment, with the US in second place, but well behind, at US $ 44.1 bn. Most of this Chinese investment has been domestic, but Chinese companies and institutions are increasingly looking overseas for opportunities in renewable energy development.
China will install 36% of all global hydro electricity generation capacity from 2015-2021. Similarly, China will install 40% of all worldwide wind energy and 36% of all solar in this same period.
About to Fulfil by India!
Attracted by India’s infrastructure development program, state-run Chinese firms, including China Harbour Engineering Co. Ltd and China Datang Corp (CDC), are looking to buy Indian companies in the engineering, procurement, construction (#EPC) and power generation space, respectively to drive their business.
While CDC, one of China’s largest power generation utility, has been attracted by India’s stressed power projects, another government-owned firm – China Southern Power Grid is in discussions with Essel Infraprojects Ltd for jointly bidding for power transmission projects.
Subhash Chandra’s Essel Group has been trying to ramp up its energy sector plans, including exploring a solar module manufacturing facility with one of China’s largest solar equipment maker GCL-Poly Energy Holdings Ltd, Mint reported on 22 March. Essel Infraprojects Ltd, an Essel Group firm, has a presence across sectors such as green energy, transportation, electricity transmission and distribution, and urban infrastructure.
However, the domestic industry has been raising concerns about Chinese firms’ participation in India’s infrastructure projects given their strategic importance. There have been instances in the past when India stopped giving clearances to telecom equipment imported from China over security concerns.
India Loves Surprises – Both to give/take!
Our Move – Indian Government says it loud: India is tightening the rules for businesses entering its power transmission sector and making stringent checks on both power and telecoms equipment for malware – moves that government and industry officials say aim to check China’s advance into sensitive sectors.
Chinese firms such as Harbin Electric, Dongfang Electronics, Shanghai Electric and Sifang Automation either supply equipment or manage power distribution networks in 18 cities in India.
Local firms have long lobbied against Chinese involvement in the power sector, raising security concerns and saying they get no reciprocal access to Chinese markets.
The Indian government is considering a report prepared by the Central Electricity Authority (CEA) that sets new conditions for firms bidding for power transmission contracts, tipping the scales in favour of local companies.
- According to the report, it says companies looking to invest in India should have been operating there for at least 10 years, have Indian citizens as top executives, and employees of the foreign firm should have lived in India for a certain period, the official said.
- Those companies have to detail where they procure the raw materials for transmission systems and will be barred from further operations in India if their materials contain malware.
Though the report makes no direct reference to China, the official said the recommendations are intended to deter China from making further headway in India, because of the security risks.
The Challenges to think over!
- CEA Chairman R K Verma said the possibility of a crippling cyber-attack on India’s power systems was a key consideration while drafting the policy. “Cyber-attacks are a challenge”.
- A representative of a Chinese enterprise engaged in exporting electric power equipment in India told China’s state-run Global Times that India’s industry has long tried to block foreign competition under the garb of safety issues. “Now, as Sino-Indian relations are getting intense, the old tune is on again. But in fact, it is unrealistic to completely ban China and India power investment cooperation. India will pay a huge price for this!”
- Shanghai Electric, Harbin Electric, Dongfang Electronics and state-run China Southern Power Grid Co Ltd, all involved in India or trying to enter, did not immediately respond to emails seeking comment on the proposed Indian investment rules.
China also trying to invest in infrastructure, telecom and other products related to Internet of Things (#IOT).
Hope, just like Australia banned Chinese take over the power grid, India will review and cap the percentage of Chinese state holding, imports and other sensitive areas.
Sources: LiveMint, IEEFA, Reuters
Pix1: Five of the world’s six largest solar-module manufacturing firms in 2016 are in China.
Pix2: China invested a record US $32 billion in global renewable energy projects during 2016.
Pix3: Time to exercise caution against surprises!
Pix4: Is the massive Chinese engagement in the power sector a security risk?
Original article for reference only:
Sam Cherian, Chairman, Elmeasure India Private Limited.