Below are the excerpts of our recent interview with Mr. C Chaudhary, Head –Solar, Ostro Energy
Let’s start with the recent developments at your organization in last one year.
Ostro Energy is has very strong financial backing, and counts Actis Capital (AUM: $7bn) as a key investor. Our vision is to make green energy accessible to all and the same was demonstrated in our recent support to Solenergi to win 250MW project in REWA at record price.
Last one year was primarily invested in building a strong team for Solar business, which can make the solar energy more competitive than traditional energy sources. Additionally, we have commissioned close to 360MW wind farms and are building another 300 MW as we speak. Solar portfolio has also grown to 200MW and we plan to increase the same to 1000MW in next 1 year.
We plan to bid very aggressively in all the upcoming bids.
As a developer, what key challenges do you face today?
The key challenges as FX Risk, payment security from state government, timely and clean land acquisitions, evacuation system and tedious permits and approvals.
Another key gap in India is lack of high quality international EPC contractors. Having installed solar across different continents, I strongly feel that quality of EPC contractors in India needs to improve significantly.
Which states do you believe will see maximum solar energy investments this year?
AP, MP and Rajasthan.
As the assets become older, will aggressive bidding today become a pain point for the industry a few years down the line?
This will be true for companies who are not technology driven.
Initially solar was driven by Capex optimization and land availability, but with many global investors such as Actis Capital, entering India now the focus is on LCOE and new technologies.
The same is evident from the improvement in technology for solar panel, inverters and structures. As we move from 5MW – 10MW plants to plant sizes of 100MW – 1000MW, automation will to take centre stage. Some of the key technologies you will see in next couple of years will be robotic dry cleaning, man less security technologies and extensive use of virtual robots (for data analysis to improve plant performance).
Solar energy has already achieved grid parity and will constitute the major chunk of all new power plants addition in India and the world. I strongly believe that Indian solar space will grow to 500GW by 2030 and will be a key employment generator over next two decades.
What are the milestones you wish to achieve by the end of this fiscal?
In solar business, we will commission another 110 MW and will win at least 500 MW in upcoming tenders.
Anything else you would like to add for our readers.
The industry should start focusing on technology and operational efficiency and ensure that Indian customers enjoy the most competitive green energy tariff around the world. I am very optimistic that by 2040 everything shall be run by Solar.
What are your views on the recent results of REWA Tender and how this will impact the future bidding rounds for solar tenders in India?
There are 2 key takeaways from REWA bidding. First, participation of lots of international tier 1 IPP players. That translates into extensive pre-bid due diligence to squeeze every unit of energy to drive LCOE down. Second, these players are quality oriented, so quality of solar assets build going forward should improve significantly.
The tariff is function of many parameters such as solar irradiance, landscape (land levelling cost), soil conditions, evacuation infrastructure, payment security and solar park development charges. Since these parameters are different across different locations / tenders, hence there is very limited impact of previous bid on tariff of future bids. A good example is that the previous record of INR 4.34 / unit took a year to be bettered, despite multiple tenders in last 12 months.
The only impact of REWA tender is that there were over 10 players within 10 paise difference. So unlike previous bids, where we saw sore losers terming the winning bids unviable, this time everyone will go back and try to analyse the areas where they missed to optimise the design. The warfront has changed from arranging cheap finances to having the best technology, design and LCOE.