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We do not believe in growth by compromising on the returns and quality of assets

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In Conversation with Mr. Ravi Khanna ,CEO,Aditya Birla 
What is your company’s portfolio mix and what are the plans in terms of capacity additions?
 
Primarily, our portfolio comprises of a happy blend of private and government PPAs in the ratio of 1:1.  We are largely in the ground mounted grid synchronized solar system having foot prints in Rajasthan, Gujarat, Telangana, Karnataka, Maharashtra and Odisha.  We target a capacity addition to the tune of 150-250 MW per year in next 2-3 years. 
 
Given the extremely competitive nature of the tariff, how confident are you of successfully developing the project on time and generating comfortable returns?
 
We do not believe in growth by compromising on the returns and quality of assets.  We have enough sticking power to wait for the right organic and inorganic opportunities.  Since we are not vying for very large capacities and the size of the cake is fairly large we are quite confident of swelling our portfolio steadily at acceptable rate of returns. 
 
At what price do you see solar tariffs stabilising in future tenders?
 
Solar tariff is dependent on the solar insolation, land availability, project size, PPA bankability and so on.  In past, developers have speculated a drop in module price which has not been realized and some of the recently discovered tariffs are stressing the returns.  In addition, the fear of anti-dumping duty and recent hike in capex due to GST are further accentuating the problem.  It is, therefore, anticipated that solar tariffs may stabilize around Rs. 3-3.50/kWh.
 
Do you think India would be able to achieve Solar Energy target of 100GW by 2022.  How much is the company planning to install in this segment?
 
Without sounding pessimistic and going by the trend in last 3 years the indications are that we might miss the 100 GW target by 2022.  For achieving the target, it is imperative to have a consistent policy to allow developers to chalk out a long-term strategy.  Time taken from the tender to CoD is to the tune of 18-24 months and hence it is essential that at any given time the pipeline of tenders for the target capacity is full 18-24 months in advance.   Honouring the conditions laid down in RFS and PPA are yet another important dimension of sectoral growth. 
 
Do you want to add anything else for our readers?
 
Solar tariffs are now competing very favourably with thermal power tariffs, we are still not factoring the cost of making all our Thermal plants meet emission standards. Fully loaded this cost may increase substantially or certain capacities will become redundant.  Besides the green aspect of technology, the economic benefit of installing solar power is going to override and fuel the growth.  With the cost-down of storage Solar power in combination with storage system will challenge the thermal power move from playing a second fiddle to conventional power to mainstream power source.
 
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