ReNew Energy Global plc (ReNew Power) has witnessed an increase in demand from commercial and industrial (C&I) customers for green energy projects driven by environmental, social, and governance (ESG) push from investors coupled with reduction in cost of projects and the thrust given to the sector by the government.
“Our pipeline has always been strong, but now we are seeing discussions converting into orders at a faster rate than before. We have been in this space for almost five years and a lot of conversations were happening on this agenda, but they were not converting at such a pace earlier,” Mayank Bansal, Chief Commercial Officer, ReNew Power, told Moneycontrol.
“Now we are seeing around 50-100 MW of orders finalising per month,” he said, commenting on the C&I orders.
As India aims to turn ‘net zero’ by 2070, large scale adoption of renewable energy by corporate India is picking up momentum. ReNew aims to develop around 250 megawatts (MW) of wind-solar hybrid projects in Gujarat for the C&I consumers, just as it has done at Vilayat in Bharuch.
Last month, the NASDAQ-listed ReNew Power said it was exiting its rooftop solar business by selling its portfolio of 117 MW to Fourth Partner Energy for an enterprise value of Rs 672 crore. The company wants to focus on larger scale projects, like developing power projects for C&I customers.
While Indian regulations allowed bulk consumers to buy cheaper renewable power from rooftop solar installation or from offsite solar farms under open access, C&I consumers are now increasingly looking at this option driven by the economic benefits.
“Customers who are setting up clean energy projects are saving around 40% as against the power they sourced from discoms. If they were using captive coal-based projects, even then the saving is 20-30%,” Bansal said.
On February 8, ReNew Power said it had commissioned its first wind-solar hybrid project at the Chlor-Alkali unit of Grasim Industries Limited at Vilayat in Bharuch. The first phase of the hybrid project, with 17.6 MW commercial-scale wind-solar, started operations last week and is expected to generate around 80 million units of renewable energy every year. The partnership will expand further with an additional 16.68 MW, which will be commissioned in the next financial year (FY23), as part of the second phase. Both phases together will have a total investment of Rs 3.82 billion through an equity partnership.
ReNew Power has a 500 MW portfolio of projects for its B2B customers, of which 150 MW is under construction. The company’s B2B arm ReNew Green Solutions has the experience of commissioning and maintaining around 1 GW of renewable energy installations across India for C&I segment.
“The existing capacity of 350 MW of B2B customers include smaller projects and therefore have a larger number of customers. But now we are signing up for significantly larger capacities; say around 30-50 MW each. These are bigger clients like Grasim and Mahindra. These are large offtakers with secure credit profiles,” Bansal said.
“The B2B business for us will be very substantial. In the C&I (commercial and industrial) side, we are starting to see a lot more traction,” he said.
India has an ambitious target of installing 500 GW of non-fossil energy capacity by 2030, reduction in emission intensity of GDP by 45% over 2005 levels, sourcing 50% of electricity from non-fossil sources by 2030, reduction in carbon emission by 1 billion tonnes till 2030 and achieving net-zero by 2070.
“Now we realize that if the country has to meet the 2030 target, corporates need to step up besides the utilities. But right now, we see a lot of growth in corporates also driven by their own ESG agenda. Their consumers and investors are asking for it (ESG compliance),” Bansal said.
As of December 31, ReNew had a total capacity of approximately 10.3 gigawatts (GW) of renewable energy projects across India, including commissioned and committed projects. The company has earlier given guidance of 8.2 GW of operational capacity by financial year 2021-22 as against around 6,315 MW now.
Bansal said that ReNew Power is in talks with other C&I customers for more such projects, especially for hybrid solutions that bring together wind and solar power to reduce intermittency.
“Besides the intermittency, many projects faced low CUF (Capacity Utilisation Factor), which meant they could not replace existing power supply with clean energy. ReNew does not want to offer plain vanilla solar projects; this is where the distinction comes in. The hybrid model with higher CUF is more popular among customers. They are still not asking for fully addressing intermittency because that would add a lot of cost,” Bansal said.
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