FPJ-SIES webinar: Tata Power continues to bet on India; plans to continue with divestments from overseas projects

Solarising India to end energy poverty with clean energy

Jescilia KarayamparambilUpdated: Wednesday, August 25, 2021, 09:29 AM IST

Renewable energy, especially solar and wind, is poised to grow due to the thrust the Indian government has given to clean energy. However, much before clean energy made it to the national agenda, Tata Power has been working towards supplying clean energy to the country. A few years back, the company even took a decision not to make any fresh investments in coal-based plants — becoming the first company in the country to take this call. Praveer Sinha, CEO and Managing Director of Tata Power in a discussion with FPJ’s R N Bhaskar focuses on the clean power initiatives of the company.

Edited excerpts:

Focus of Tata Power on clean energy

It is in the DNA of the organisation to provide clean power. In 1900, when Jamsetji Tata wanted to set up a power generation plant. He said he wanted Tata Power to provide clean, green, affordable energy for the people of this country. This was his vision when there were no power plants in the country. The first power plant that was set up in Lonavala was a hydropower plant. Since then, Tata Power has been in the forefront to bring in new technology and provide clean and affordable power. Even when Tata Power was in coal-based power generation, we still ensured that we used state-of-art technology to keep pollution level at the minimum levels.

Mumbai has been fortunate to have a Trombay plant that supplies power to south and north Mumbai. We have been able to maintain both the supply and quality of power.

Tata Power believes that providing clean power to customers is its duty and responsibility. As a country, we have been focusing on clean and green energy. But the challenge here is to provide affordable energy.

Renewables at the helm

In the last 10 years, a lot of work has been done in the renewable energy space by Tata Power. The objective was once renewable energy, especially solar and wind, becomes affordable, Tata Power will produce a large quantity of renewable power for the country.

India is fortunate as it has more than 300 days of sunshine that gives us the huge opportunity to produce large quantities of solar energy. In addition, there is a huge potential for onshore wind power.

India’s ambitious task to achieve 175 GWs of renewable energy by 2022 and 450 GWs in 2030, is achievable. Instead of the numbers (target), the country should actually look at the directional intent behind this task. Even if India misses the target slightly, it should not be a cause of concern. This is because India is going in the right direction.

Tata Power has been at the forefront in this area. Two years back, Tata Power took the decision that it will not set up any more coal-based plants. In addition, we will become net zero [carbon emission] before 2050. This is because we have some Power Purchase Agreements (PPA) till 2038 and 2041. However, we are looking at achieving the net-zero target much before 2050. Tata Power is the only Indian company to take this decision and has taken leadership in thought and action.

Such a leadership action needs sacrifice. But for a larger good, Tata Power has taken this decision. It is important we move towards clean energy.

Today our renewable generation is 31 per cent of our overall power generation. By 2025, we will become about 60 per cent despite the fact that we will be doubling our capacities — from nearly 13 GWs to 25-26 GWs by 2025-2026. By 2030, 70 per cent of our power generation will come from renewable energy. All steps are taken to ensure that we have the right technology, right people and capacity building. So, we run these plants very efficiently.

It is a great opportunity for the country and the people. It is also an opportunity for Tata Power to participate in the big agenda of the government and to participate in the transformation that will happen in the country.

Divestment process

Tata Power has investments overseas in green power except for coal mine investments the company made in Indonesia. We have a wind energy project in South Africa in which we divested last year. We have hydropower plants in Zambia and Georgia (in Adjara). However, we would want to divest there as well.

Tata Power invested in these projects with the anticipation that there would be a large amount of power generation capacity that will follow. We don't want to do just one-off investments but do multiple investments. Thus, bring a change and transformation in those countries. Unfortunately, those opportunities were not available there due to various local issues, geopolitical considerations etc. Thus, we are not able to grow over there. So, we have decided to divest.

We also have a hydropower plant in Bhutan which also supplies power to India. So, we have footprints overseas, but we feel India offers bigger opportunities. Our focus is on doing large-scale investments in the next 5-10 years in the renewable space and many allied businesses that we are exploring alongside.

Solar Journey for Tata Power

The journey of Tata Power in solar started in the year 1991. It set up the first solar plant in Bangalore and it still continues to operate. The technology in solar energy has changed since then and the capacity has increased tremendously. Tata Power was the first one to introduce the concept of solar energy in the country.

Right now, we manufacture solar panels — both cells and modules. We are in the process of expanding that as well. We are the biggest EPC player in the country. This is not limited to us, we also serve other large companies or industries. Many foreign entities looking for quality and consistency in supply give us large mandates.

We also set up a large scale utility. Today, we have 2,700 MWs of operating solar projects and around 1,300-1,400 MWs that will be commissioned this financial year.

We offer a comprehensive solar solution. Thus, empowering people to produce their own power.

Tata Power is the biggest rooftop solar energy company for the last five years. The pace at which we are growing in this category is phenomenal. In the last three years, we have grown 10 times — starting with just 50 MWs, last year we did 175 MWs and will do 500 MWs this year.

In the coming five years, we will grow 10x. So, from 175 MWs last year, we will become 1,750 MWs in 2025. This is the kind of capacity addition that is taking place.

Tata Power is in 100 cities. We provide a number of value-added services to the customers.

We are also very big in solar pumps and that is an opportunity area for us. It is part of our long-term plan of distributed energy generation. We are supporting farmers through this.

Another initiative that is adopted by the company is the solarisation of 10,000 villages in India through microgrids. Here we have a solution like solar panels and batteries. This is the largest microgrid project that we are carrying out. It comes under the programme universal access to energy and as a part of the global initiative of removing energy poverty.

Household solar solutions

Today a consumer can connect to us. We design and test their roof to know if the roof has the right strength to bear the weight of the solar panel. In addition, we commission the panel and sign an Annual Maintenance Contract (AMC) for 5-10 years. We also arrange financing and insurance. It is a single-point responsibility.

People can rest assured due to the Tata name attached to it. The penetration that we have seen in solar energy was not there around three years ago. It is only in the last two to three years, we started looking at this very closely. There were small players in the space who were trying to sell the products without guaranteeing output. There are large numbers of customers moving towards solar energy. This will become a norm among not just metros but even tier II and tier III cities.

Promoting new technology with the help of start-ups

Tata Power supports the start-ups in carrying out research activity in automation for the power sector. These start-ups even designed some low-cost sensors. So, we come out with affordable solutions.

A lot of work went into designing bio CNG as we were not very comfortable with the idea of using diesel generators as backup power. Thus, biogas that is developed in the villages is utilised to generate power.

We are doing a huge amount of work with start-ups in the clean energy space. We run an incubation centre in New Delhi known as Clean Energy Incubation Centre. This is supported by Tata Power, Tata Trust through Social Alpha, and Tata Power Delhi Distribution. It is the only Clean Energy Incubation Centre in India.

The work that we do here is to bring many new solutions and technologies which are affordable and can be used at a mass scale for promoting green energy and conservation of energy.

Incubation Centre supports start-ups to carry out research, supports them with seed capital and administrative activities. We are working with 40 start-ups. Many of them have the potential to become unicorns in the next three to five years.

Journey going forward

The biggest challenge in the renewable space is technology development and sourcing of raw materials.

The present structure is such that most of the technology and raw materials used in renewable energy is imported, only small portions are produced in the country.

Going forward that will continue to be a challenge because you need huge economies of scale. Indian manufacturers can only compete with international suppliers only when they become competitive.

The challenge will be to find a way to become secure in the supply and become self-sufficient. There is a lot of work that needs to be done in this direction. The whole ecosystem has to support the Indian manufacturer at the same time, to make them competitive. So, in the end, the customer gets the best price.

Power sector: A large employer

The power sector is a very big employer. It has always been that way.

There is an apprehension that if you move away from coal-based plants then there will be a drop in employment.

According to a study, a coal-based plant per megawatt would require 0.5 people. In the case of solar power, you would require 3.5 people. The manpower in the power sector will not reduce but the nature of jobs will undergo transformation.

If the country grows, then employment opportunities will also grow.

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