Mumbai Capital

I don’t see viability for wind: Sumant Sinha

Sumant Sinha, founder of ReNew Power.— File Photo  

umant Sinha left his investment banking job to start ReNew Power in 2011. Within five years, ReNew became the first renewable energy firm to build an operational capacity of 1 GW in solar and wind. Sinha aims to make it the largest in the sector.

In an exclusive interaction with The Hindu , Mr Sinha talks about capacity additions, falling solar tariffs, an initial public offering and acquisition plans to that will fuel the next level of growth. Excerpts:



The government is bullish on renewable energy but capacity additions over the last two years don’t reflect that. What’s your take on this?

In the last two years, we added about 5,800 MW in wind and 3,400 MW in solar but if you look at capacities allocated between the Centre and States for solar, it’s about 6,000 MW. Besides, allocation of another 15,500 MW is done, so capacities of over 20,000 MW are visible in the next 18 months.

Where do you see ReNew power going?

We are the first company in India to cross 1,000 MW of clean energy assets in solar and wind.

At least 1,060 MW is up and running already, and we have a pipeline of 1,400 MW. This includes 286 MW in Telangana, 330 MW in Karnataka, 50 MW in Madhya Pradesh and 522 MW in Jharkhand.

If we execute these projects, we can easily cross 2,000 MW in the next 12-18 months.

What is ReNew Power’s portfolio mix and will it change?

Most of ReNew Power’s portfolio comprises wind at 880 MW and solar at 118 MW.

We will add 1,100 MW in solar and 300 MW in wind, and by the end of next year, we will have a balanced portfolio of 1,180 MW of wind and about 1,220 MW of solar.

How do you see the future of wind energy generation, given the government’s focus on solar? energy?

I don’t see viability for wind.

After this year, generation-based incentives are going away, unless the government decides to extend them. The accelerated depreciation benefit too is being taken away, so it is a worry.

States are not telling us how much they will buy this year because of the uncertainty.

There is a bigger worry: we have over 10,000 MW of manufacturing capacity. What will happen to all those jobs and factories? That’s why it’s imperative for the government to focus on this sector too.

Earlier, solar energy was more expensive, but the cost suddenly came down, and it’s now competing with wind.

If wind energy is to survive, then customs and excise duty should be removed, as it comprises 10 per cent of capital cost. Solar tariffs have come down but it has a limited manufacturing base in India as most panels are imported.

When are you planning to list ReNew Power and at what valuations?

Listing will happen. We have Rs 4,000 crore in equity and that will take care of 2,500 MW. We will evaluate in the next 6-9 months where we are before planning an initial public offer.

We have raised $370 million equity from Goldman Sachs, $200 million from ADIA, $50 million from ADB and $30 million from GEF.

Also, we are valued at over $1 billion based on the last round of funding. Our total balance sheet size is Rs 10,000 crore: Rs 4,000 crore of equity and Rs 6,000 crore of debt.

At what price do you see solar tariffs stabilising?

Tariffs will stabilise as soon as we see aggressive bidders out of the market. Tariffs should stabilise between Rs 4.75 a unit and Rs 5 a unit.

However, for some of the state bids, it may be a bit higher.

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Printable version | Apr 18, 2021 6:31:31 PM | https://www.thehindu.com/news/cities/mumbai/business/i-dont-see-viability-for-wind-sumant-sinha/article8469334.ece

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