Below are the excerpts of our recent interview with Mr. Manoj, VP-Solar, Fortum India
Let’s start with the recent developments at FORTUM in last one year.
Fortum sees India as a market with huge potential owing to its geographical location and high energy requirements. In the beginning of this year, Fortum signed PPA for 70-MW solar plant under NTPC’s Bhadla Solar Park tender and further, we also secured and signed PPA with NTPC for development of 100 MW Solar project under Pavagada Solar Park in Tumkur District Karnataka in India Fortum India will continue to participate in upcoming solar bids and intends to invest EUR 200–400 million in the country with the right opportunities.
What are some of the key factors you consider before investing in projects in various states? Which states do you believe have maximum potential for investments?
We do an in-depth risk analysis before we decide on any investment possibility. There are many factors, however we can point out some key aspects. Firstly, we go through with the policy document announced by the State/centre for the upcoming bid and thereafter we go in to the deep analysis of the site/land ie Fertility of land from Solar perspective and then with the help of our suppliers try to put our best bid to secure the project. The cost of land, Power evacuation, site condition, counter party, solar states etc play a crucial role in our bid selection.
As a developer, what key challenges do you face today?
Solar power in India is a fast developing industry, India is ranked number one in terms of solar electricity production per watt installed, with an insolation of 1700 to 1900 kilowatt hours per kilowatt peak. Keeping in line with the Prime Minister’s 2022 vision to achieve 100 GW of solar energy, we need to overcome certain challenges in the industry. These are listed below:
• Lack of clarity on how likely additional costs as input taxes in the upcoming Goods and Services Tax (GST) regime would be allowed as a pass-through by the regulators has put the potential bidders for solar power projects in a bind. Currently, the solar power equipment are largely exempt from indirect taxes across states but implementation of GST would mean a possible 18% tax on them.
• Timely handing over/possession of land and availability of Power evacuation on time is another challenging factor.
• Solidity of fulfilment of RPO obligation by the state.
Could you please share the plans of your upcoming solar projects with our readers?
Fortum's strategy is in line with the Indian government’s vision to produce more sustainable and clean energy in a resource efficient way. We are also optimistic about our business portfolio in India and potential for its future development. We will continue to deepen our penetration into the Indian market through a combination of organic and inorganic growth strategies in order to emerge as a significant renewable energy producer in India. We believe that Fortum has a lot to offer to the rapidly developing Indian energy market based on our long track record in sustainable power production and our energy market competence.
Finally, what are the milestones you wish to achieve by the end of this fiscal?
Firstly, We would like to see the projects which we secured this year ( 70 MW & 100 MW ) goes in to implementation phase to ensure safely & timely commissioning as agreed in PPA with NTPC. Secondly, would like to secure more project as a pipeline for next year commissioning with an intend to invest Euro 200-400 million investment in India. Our vision is to be forerunner in the clean energy.
Will Fortum be looking at building an asset portfolio of rooftop solar projects?
We are evaluating roof top solar market and wish to do few projects soon .