Tata Power, one of India’s largest power utilities, is switching thermal power back on. Two years after it announced its decision to not add more coal-fired plants and focus only on clean energy, CEO and MD Praveer Sinha told Moneycontrol that the rising demand for electricity made Tata Power revisit the decision. Energy security and energy transition need to coexist, he said.
Tata Power’s move comes at a time when the government is planning to add nearly 95 gigawatts (GW) of thermal power generation capacity by 2032, even as it targets 500 GW of non-fossil fuel-based projects during the period.
In an interview to Moneycontrol, Sinha also talked about the firm’s capex push, renewable energy projects and how it planned to navigate global trade, upended by American tariffs. Edited excerpts of the interview:
Last Tata Power invested in thermal power was the acquisition of the 1,980 megawatt (MW) supercritical thermal power plant in Uttar Pradesh's Prayagraj after which you said in 2023 that the company would no longer invest in coal-fired power plants. What changed in two years?
It's a question of timing. We have solar hours and wind hours but what do you during periods when you don't have such renewable power? To solve that, you can do battery storage and pumped storage plants (PSP). We are already executing 2,800 MW of PSP projects but it will all take time. All of it will come by 2029-30.
So, till that time, what do we? How do we cater to the growing energy requirements of the country? We must understand that this need will only be for a certain period until cleaner sources are available round-the-clock at affordable tariffs.
Energy security and energy transition need to coexist.
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In that scenario, how does Tata Power plan to achieve its net zero emission target by 2045?
Our net zero target does not change. Our plan of decommissioning thermal power plants will be done as and when their power purchase agreements (PPAs) get extinguished. So we're not changing our stand.
The only difference is that now we are saying that if we get an attractive opportunity with shorter PPAs within the year 2045-limit, we will take it. It could be a thermal plant for localised energy needs (captive power) as well.
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The company’s capex for FY25 was Rs 20,000 crore but only about Rs 16,000 crore could be utilised. Where were the slippages?
This was because of delays in the transmission and renewable energy segments. In transmission, project hand over by Power Finance Corporation (PFC) and REC Ltd happened late which is why some projects got delayed.
On the renewable side, some projects got delayed due to land acquisition and a lag in connectivity to be provided by third party, who are selected through tariff-based competitive bidding process of the government.
In the next six-12 months, at least 5.5 GW of renewable energy projects will be commissioned by Tata Power.
For FY26, we have planned a capex of Rs 25,000 crore, much of which will be used for completion of ongoing renewable energy and transmission projects.
The government plans to issue renewable energy tenders with a mandate of battery energy storage systems. How is Tata Power navigating this?
We are geared up for it. We have a group company, Tata AutoComp Systems, which is into making batteries. Going forward, they will be support us in all such projects. So, Tata AutoComp will be supplying us the batteries and Tata Power will execute the renewable projects with battery energy storage systems.
It's a good initiative of the government to ensure round-the-clock power.
Is Tata Power looking at markets outside inside, given that we just concluded an FTA with the UK and talks are on with other nations?
There is so much opportunity within India. We are closely entrenched in our country and we have the domain knowledge plus the market understanding. We believe that we should focus on our strength of developing projects and implementing them in India.
Within India, 60 percent of our products — be it energy or renewable parts and projects — is used within the companies of Tata Group (Tata Steel, Tata Motors, Tata Electronics, Indian Hotels Company, etc.) and 40 percent goes outside — say for government projects and the commercial and industrial (C&I) sector.
Any update on your nuclear power plans?
Not really, we are just waiting for the two laws (Atomic Energy Act and Civil Liability for Nuclear Damage Act) to be amended and some guidelines to be issued. Only then we will move forward. On our part, studies and all are going on.
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