Anil Sardana, managing director & chief executive officer at Tata Power, to Nirmalya Behera & Jayajit Dashon current issues and strategy. Edited excerpts:
What are your plans to build a green energy portfolio? How will the additional investments be funded?
We have ambitious plans to keep fuelling multifold growth across the value chain. We have gross generation capacity of 10,613 Mw, of which clean energy is 3,141 Mw, making us one of the largest non-fossil based energy players in India. To aggregate its clean and renewable energy portfolio, Tata Power has initiated the process of carving out 500 Mw of clean energy assets from its books into Tata Power Renewable Energy. This is a 100 percent subsidiary and has an operating capacity of 1,959 Mw, comprising 907 Mw in wind, 932 Mw in solar and 120 Mw of waste heat generation capacity.
We have reiterated our commitment to clean energy and have announced our non-fossil fuel energy output to be 35-40 percent by 2025. The company is also in the process of implementing organically nearly 500 Mw of renewable power projects at various locations.
Is solar power a key growth driver?
Solar power is a focus area of the government, with 100 Gw installation being targeted by 2022. In line with the target, Tata Power will also focus on solar. New technologies like third generation photovoltaic have reached incremental efficiencies in lab tests. We wish to increase our solar businesses significantly over time, as the government is expected to bid out large scale projects to meet its target.
For wind energy, we will continue to look at opportunities as and when these come. The company is exploring multiple options, both new projects and acquisitions, to capture the market for both solar and wind-based generation. As of now, we are able to fund the proposed renewables’ growth from internal resources. The company is also in the process of acquiring land parcels in Maharashtra, Rajasthan, Gujarat, Andhra Pradesh and Karnataka to develop solar and wind projects.
Solar power rates tumbled to record lows at recent bids. Will these be sustainable?
The falling rates are a result of falling solar module prices, easier availability and competitive capital, and excess capital chasing limited capacity, resulting in developers willing to take greater risks and perhaps with lower return. It will be unfair for us to comment on price bids of others and whether those are sustainable. Each bid has its unique parameters (solar park costs, location, solar resource, scale, offtaker, etc) and renders the comparability difficult. Central projects offer greater payment security and ease of approvals, which only some states can offer.
How does Tata Power plan to cut costs of both thermal and solar power generation?
We operate both at benchmark costs and will continue to pursue digitalisation and other disruptive technologies, to optimise cost and efficiency.
Are you evaluating buyouts of any stressed power projects to boost your inorganic growth?
We have partnered with global investors to invest as much as $840 million in projects. The platform has commitments from Canada’s Caisse de D
