July 17th, 2020 by Smiti
India’s largest renewable power generation company has announced aggressive plans to expand its portfolio and enter into new related segments like solar cell manufacturing. These announcements come days after one of the leading renewable energy companies in India, Adani Green Energy, secured the rights to develop 8 gigawatts of solar power generation and 2 gigawatts (GW) of solar cell and modules manufacturing capacity.
ReNew Power aims to double its power generation capacity to 20 gigawatts in five years. The capacity expansion would require an approximate investment of Rs 40,000-50,000 crore (US$5.3-6.6 billion). This investment may vary depending on the location of the projects and cost of the land involved.
The company currently holds the largest portfolio of nearly 10 GW in projects, out of which 5.44 gigawatts are operational projects. It was the first Indian company to build a portfolio of 5 gigawatts of operational renewable energy capacity.
ReNew Power has submitted some aggressive bids in 2020 amid slowdown due to Covid-19. The company’s growth remained on track when most of the developers struggled to bag new projects.
In May, the company won the rights to develop a 400 megawatt (MW) renewable power project. The company won the auction for the entire tendered capacity of 400 MW at the a quoted tariff of Rs 2.90 (US¢3.87) per kilowatt hour. Under this tender, the company can set up solar, wind, or hybrid projects at any location of the country and to ensure a plant load factor of 80%. The electricity generated from the project will be supplied to New Delhi Municipal Corporation and Dadra and Nagar Haveli through an inter-state transmission network.
In January, ReNew won the rights to develop 300 megawatts of renewable capacity in an auction conducted by SECI to build 1.2 MW of solar, wind, and energy storage projects with guaranteed power supply.
ReNew Power is also targeting double-digit growth in the transmission sector in the coming three to five years. Last year, the company had announced its interest in exploring business opportunities in power transmission along with other segments like energy storage, floating solar, and wind-solar hybrid projects. The company had started bidding for transmission projects from August last year and it hopes to grab contracts worth of Rs 1500 crore (US$ 200 million).
The company is backed by Goldman Sachs which holds a 48.6% stake, a majority shareholder. The other major investors in the company include Abu Dhabi Investment Authority, Japan-based energy group JERA, Canada Pension Plan Investment Board, and Global Environment Fund. The company has received foreign direct investment to the tune of US$1.4 billion since its inception.
Plans for IPO
ReNew Power once had extensive plans to get itself listed at Indian stock exchanges. In 2016, the company issued its draft red herring prospectus but did not go any further with its planned initial public offering. Poor performance of shares of other renewable energy companies listed at the exchanges was one of many reasons for ReNew to back out of the IPO. The company instead opted to raise funds through a private sale of equity stake to marquee investors. It also raised funds by issuing green bonds.
Plans for Solar Cell Manufacturing Business
A few days after the company’s announcement of capacity expansion, ReNew Power also announced plans to enter into the manufacturing of solar cells and modules.
Sumant Sinha, chairman and founder at Renew Power, has confirmed that the firm will manufacture solar cells with an initial capacity of 2 gigawatts. The company will invest about Rs 1500-2000 crore (US$200-265 million) for setting up the facility and this is expected to create 2000 jobs in the country.
A statement issued by the company stated that discussion is ongoing with various states to set up a facility for this new venture. The domestically manufactured cells and modules will cater to the demands of the 4.5 gigawatts of the company’s projects which are in different stages of development, apart from meeting the requirements of other clean energy developers. This will reduce the dependence on the Chinese cells and modules which currently dominate India’s solar market with a share of about 80%.
With this new announcement, the company aims to become an integrated renewable energy company with its foothold in manufacturing, generation and transmission business.
The company’s decision to foray into solar module and cell manufacturing business comes at a time when government is aiming to end its dependence on import of all equipment, including solar modules. The government has announced that all public departments and institutions will only buy domestically manufactured solar cells and modules. This is part of the country’s Atma Nirbhar Bharat Plan which plans to make India self-reliant.
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