Oil and Natural Gas Corp (ONGC) is planning to set up a 1 GW solar power plant in Rajasthan in a key move aimed at securing a foothold in the green energy space, according to an executive familiar with the company's plans. The company has approached the state government, seeking 5,000 acres of land to house its proposed 1 GW plant, the executive said.
"We are engaged with the government," the person said. "The moment the land is allotted, we will go full throttle on executing the project." The project may require an investment of 5,000 crore and take about three years to finish after the allotment of land. The proposed plant will help meet in-house
electricity demand as well as allow the company to sell power on the market. With just 153 MW of wind and 31 MW of solar generation capacity, ONGC barely has a presence today in the renewable energy space. But it has now begun to act on its green goals by pushing hard on some projects and by tying up with some power companies.
ONGC is exploring an offshore wind farm project in partnership with Norway's Equinor. It has struck a preliminary agreement with NTPC, the country's largest generator, for setting up renewable power projects. It has also tied up with Greenko, one of the largest renewable energy companies in India, to set up a green hydrogen project.
ONGC and other oil companies in India have been under pressure to go big on the green agenda to help in the climate fight and meet the growing energy needs of the country. India's oil production has been falling for years and the near absence of foreign investments in the upstream sector means domestic players must do more to boost domestic output.
High oil and gas prices have helped boost cashflows at ONGC, further pressurising it to look for more investment opportunities. Executives at ONGC feel that the domestic demand for oil and gas is not going to vanish for several decades but it's important to participate in the green energy sector to help fight climate change.