“The “Hero Approach” Of Owning A Renewable Energy Project Is Based On Business Case Certainty Of 25 Years”

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Mr. K.V.Sajay, President – Wind, Solar and Regulatory Affair Hero Future Energies shares his valuable insights on the significance of energy storage and untapped opportunities that can be explored.

What according to you is the biggest strength of Hero Future Energies in the solar sector?

Hero Future Energies (HFE) is the renewable energy arm of the Hero Group, which is an extremely diversified industrial conglomerate. The group’s flagship company is Hero Motocorp but we also have auto component company, finance company, electronic company, university and of course renewable energy.

We are one of India’s fastest growing renewable energy developer. The “Hero approach” of owning a renewable energy project is based on business case certainty of 25 years or more, this in turn helps to bid and build robust assets with the right HSEQ standards in a time bound manner.

How significant is energy storage for the development of solar sector?

One of the distinctive characteristics of the electric power sector is that the amount of electricity that can be generated is relatively fixed over short periods of time, although demand for electricity fluctuates throughout the day. Energy storage can assume a larger role in matching the demand and supply. At the same time, technological development, better utilization of transmission assets and rapid price reduction of other technologies like thermal storage and battery energy storage along with rapid penetration of intermittent renewable energy like solar and wind, have created a renewed demand for energy storage technologies.

Energy storage will also support buyers by supplying power during peak period along the day at competitive prices against the power from conventional sources during such period which is procured by paying premium charges.

What do you think are the untapped opportunities which needs to be explored in the solar sector?

Solar sector has evolved from being focused on heat transfer-based method of power generation to solar photovoltaic based power generation during the last decade under the JNNSM and it’s still evolving as we speak.

Thus, we see very high opportunities in the fields of domestic solar PV module manufacturing with integrated supply chain of polysilicon to PV modules instead of cells to PV modules to cater the demand of both domestic and international market (100+ GW per annum).

Technological development in battery-based energy storage system clubbed with solar/ wind energy generation has huge potential in the coming years. A shift to green alternative will be attractive as compared to conventional power based on pricing.

India has ~ 36 GW of installed wind capacity. Most of these farms also happen to be in high solar insolation zones and if proper hybridization is done even to the 50% (i.e., 18 GW) of such installed capacity along with solar and energy storage solutions, it will result in better utilization of existing transmission systems along with increase in capacity utilization factor and reduction in variability of power from renewable sources. Also, it means that about 18 GW capacity can be added in a short span of 1 year to the country’s overall renewable target.

A lot has been done to improve the policy and regulatory framework for the sector. What are the problems that persist with in the sector?

In FY18 capacity addition in renewables was 2.5 times the capacity addition in conventional energy generation during the same period. This sector has seen numerous off takers in the bids conducted by SECI, NTPC, MSEDCL, GUVNL and other nodal agencies during second half of 2018 and so far in the first half of 2019, thus we expect considerable capacity addition in the years ahead.

This wave of optimism coupled with strong regulatory framework is the need of the hour. However, challenges to be dealt includes outstanding overdues with DISCOMs, slower augmentation of transmission infrastructure, threatening and challenging the sanctity of long-term power purchase agreements by state government, uncertainty of waiver of transmission charges beyond March 2022 etc.

Additionally, to spur investment in this sector few more challenges namely mismatch in timelines of solar projects, deemed non-agricultural conversion of land for use in solar projects, curtailment of power from renewable sources and non-adherence to “Must Run” status for renewable projects need to be addressed.

It is worth mentioning that union government had already taken cognisance of situation and invited RE developers in recently conducted Chintan Baithak by MNRE to address the challenges faced by the sector. Let 2019 be the time when leaders in government and business of renewables can jointly drive sectoral growth, create employment and transit towards a carbon free economy.

What more can Indian government do to propel the growth of the sector?

To improve the bankability of projects, the government should focus on the following pointers, which might seem micro in nature but is of utmost importance to gain confidence of any investor or banker.

  • Development of single window clearance for all requisite approvals
  • Flexibility in terms of size and timing of equity infusion
  • Deemed generation compensation at 100% of applicable tariff in case of grid curtailment
  • Time bound adoption of tariff discovered under tariff based competitive bidding by ERCs without any re-examination of such discovered tariff
  • Timely payment to renewable generators
  • Extension of financial closure and commissioning timelines for actual/ genuine delays in government approvals
  • Pre-defined formula for calculating impact of new duty on cell and modules
  • Increase the duration of PPAs from existing 25 years to 35 years for solar, wind and storage-based hybrid projects


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