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“Renew Power Continues To Seriously Evaluate New Upcoming Re Hybrid Opportunities”

Where do you see the Solar Energy industry in India poised vis a vis the Government's ambitious target @ 100GW by 2022?

The Central Govt. in 2015 revised the Solar Power installation target from 20 GW to 100 GW by 2022. Over the last 5 years, the solar capacity installation in the country grew at CAGR of 60%, and as on March 2019, it stands at ~28 GW, as a result India is now the 5th largest nation in terms of solar capacity installation. The exponential growth has been achieved on the back of precipitous drop in solar tariffs. 

The solar industry has seen favourable push from Indian Govt. as a result the country almost doubled its solar installation from FY 14-15 to FY 17-18. The momentum can be built upon through consistent regulatory support, timely implementation of grid infrastructure and roadmap of future tenders is paramount to achieve solar target of 100 GW by 2022.

Against the backdrop of the recently concluded Green Bond Issue, how do you perceive Renew Power in furthering its growth with additional capacity build-up of new RE projects?

ReNew Power has since its inception invested in high quality assets and created value for all stakeholders. The recently concluded green bond issue of $435 million allowed us to make our capital structure more efficient by refinancing a portion of existing debt and also finance high quality greenfield projects. Although, we have been active in participating in tenders in last financial year, we exercised prudence in picking tenders. Having said that, we were also able to build up a stable pipeline of 3.5 GW Wind & Solar projects to be constructed in next 2 years at relatively better price. 

Also, we have been growing inorganically, we have successfully completed 4 brownfield acquisitions on varied sizes in recent past. We will continue to seriously evaluate the future renewable tenders as well as high quality assets on sale to deliver better value to our stakeholders and also strengthen our position as the leading renewable Independent Power Producer. Further, we are planning to diversify in allied new technologies in renewables to replicate our success in solar and wind businesses.

How has the last FY 2017-18 been for your company? Has the temporary slowdown in the growth of solar sector impacted your company?

During the last financial year 18-19, we achieved several important milestones that further strengthened our position in India’s renewable energy landscape:

  • Our total capacity (both commissioned and under construction) is touching 8 GW, which is the largest in India. Now, we are contributing 1% to India’s overall energy generation.
  • We completed acquisition of Ostro Energy (1.1 GW) in April 2018, which is India’s largest M&A deal in renewable energy sector.
  • Canada Pension Plan Investment Board (CPPIB) increased its stake in our company by investing an additional $144 million last year.
  • We successfully commissioned our largest solar project of 300 MW at Pavagada, Karnataka.
  • We successfully commissioned wind project of 250 MW (in Kutch, Gujarat) won under the first SECI ISTS reverse auction in India.

During the FY 18-19, ~13 GW of solar capacity was awarded which is double of the previous year, out of which ReNew Power won more than 1GW of solar capacity. 

 

What are your views on the new government policy of Anti-dumping duty?

The recent move to impose anti-dumping duty of up to $1,559 per tonne on solar cell component Ethylene Vinyl Acetate (EVA) sheets for 5 years from China, Malaysia, Saudi Arabia and Thailand is another step to promote domestic manufacturing of solar modules after imposing safeguard duty in July 2018 for 2 years on solar cells and modules. 

While we are in complete support of Govt. effort to promote Make in India, but such support should be in the form of tax breaks and capital subsidy rather than tariff barriers. We believe levy of Anti-dumping duty on EVA sheets is counterproductive as currently there are not many domestic players who manufactures quality EVA sheets, which could lead to supply constraint in the domestic market. Further, this may also lead to increase in domestic solar module manufacturing cost pricing them out of competition. Therefore, the tariff barrier might have negative impact on the overall solar manufacturing base in India.

What are your views on emerging RE Hybrid technologies such as Wind Solar and do you also plan to allocate investment in this sector given the fact your company has a good mix of Solar and Wind assets?

Hybrid renewable energy systems usually consist of two or more renewable energy sources utilizing common infrastructure together to provide increased system efficiency as well as greater balance in energy supply. The most common of them are the Wind Solar Hybrid projects that may also couple with storage to provide a stable power output. This in turn partially address the concerns of distribution utilities over grid stability arising due to the intermittent nature of wind or solar. Following are some suggestions which can make the opportunities more bankable:

  • Clarity on regulations – Metering mechanism, Renewable Purchase Obligation accounting, Scheduling and Forecasting etc.
  • State Revenue land use to be permitted for Hybrid projects.
  • Tendering authorities should understand that while there are marginal savings due to cost synergies, the impact of poor resource of one of the technologies has a much larger negative impact on project economics. Therefore, a ceiling tariff for the bid shall be accordingly determined.

ReNew power continues to seriously evaluate new upcoming RE hybrid opportunities.

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