Tata Power Company has set a target of commissioning at least 150 MW of wind farms and 50 MW of solar projects during the year. Rahul Shah, Chief, Business Development, India Business and Renewables, says Tata Power is keen on advocating a policy structure based on predictable tariff and faster approval that enables the growth of renewable energy in the country.In an interview with Business Line , Shah explains how the company is looking at both organic growth and setting up projects while being open to acquisitions. The BL queries on the company business were initially answered by Anil Sardana, Managing Director, Tata Power, through an email interaction, followed by a telecon with Shah. Edited excerpts:

What are your plans in the renewable energy sector ?

The goal is to set up 150-200 MW of wind energy and about 50 MW of solar every year. This can come through new sites that the company develops or through acquisition of operating projects.

The company currently has around 450 MW of operating hydro, 126 MW of hydro in Bhutan in joint venture with the Government of Bhutan that is very close to commissioning and 421 MW of hydro under development in Himachal Pradesh and around 185 MW of hydro under construction in Georgia.

Tata Power commissioned a 28-MW solar project in Satara two months ago. Some wind projects are under construction in Maharsahtra and Gujarat.

Has the cost of developing wind projects stabilised?

The company is constructing a 240-MW wind project in South Africa through a joint venture. Wind projects generally require about ₹6.5-7 crore per MW and solar projects work out to around ₹7-8 crore per MW. Four years ago, it was ₹18 crore per MW. The cost of setting up wind and solar projects has stabilised now. Tamil Nadu, Karnataka, Maharashtra, Gujarat, Rajasthan, Andhra Pradesh and Madhya Pradesh are among the States with wind power generation capacity. Apart from Andhra Pradesh and Madhya Pradesh, these States have seen a lot of addition of wind generation capacity and they have already met the mandated RPO (renewable energy purchase obligation) compliance.

There seems to be a concern about implementation of RPO.What is your assessment?

The RPO mechanism is well thought out. Unfortunately, the health of the distribution companies in various States has not allowed the regulators to ensure RPO compliance. As a result, a lot of projects are being affected because the Renewable Energy Certificates (RECs) they generate do not have demand.

By when do you see the grid parity coming through?

Renewable energy makes eminent sense in spite of the initial cost. The cost of conventional power will keep rising whereas once you have taken the renewable energy plant then you are going to get power at the same cost for the next 25 years.

Already the tariffs in some States, when it comes to supply to commercial and industrial sectors, are on par with wind and solar power generation. With the return of the accelerated depreciation as an incentive for wind, the capacity addition in the country will go back to about 1500-2000 MW per year

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