Tata Power to spend ₹75,000-crore in next five years on renewables

Tata Power, one of India’s largest power generation companies, has lined up a capital expenditure of ₹75,000 crore for renewable energy over the next five years, Chairman, N Chandrasekaran said to shareholders at the company’s 103^rd annual general meeting.

The focus on renewable energy sector has led to steady growth of India’s renewable energy capacity over the years, crossing the 100 GW mark in FY22, with share of renewable based capacities moving up from 12 per cent in FY12 to 28 per cent in FY22, mainly driven by solar.

“The government-backed policy initiatives along with the consistent fall in cost of solar technology provided boost to the solar energy sector, making it attractive for domestic and global players. Tata Power is looking to scale up its generation capacity to over 30 GW by FY27 from current 13.5 GW with an increased clean energy portfolio from current levels of 34-60 per cent by 2027 and 80 per cent by 2030,” Chandrasekaran said.

In April, Tata Power and BlackRock Real Assets-led consortium, including Mubadala Investment Company, entered into a binding agreement to invest in Tata Power’s renewable energy subsidiary, Tata Power Renewable Energy.

BlackRock Real Assets, together with Mubadala, committed to invest ₹4,000 crore for a 10.53 percent stake in Tata Power Renewables, translating to a base equity valuation of ₹34,000 crore. The final shareholding will range from 9.76 per cent to 11.43 percent on final conversion.

“The changing dynamics driven by maturing technologies have shifted the trend from plain standalone solar and wind projects, to rising interest in more complex projects including hybrid, Round the Clock (RTC), peak power, floating solar and storage,” Chandrasekaran added.

The consolidated capex for FY23 stands at ₹14,000 crore, including ₹10,000 crore in renewable energy. The company claims to have a solar EPC order book of ₹13,000 crore. It added 707 MW capacity in FY22 in renewables.

One of the other critical areas is increased participation of the private players in the transmission and distribution space to improve the operational efficiencies and financial performance of the distribution companies.

“The government has been announcing multiple schemes towards addressing the issues in the distribution sector which are yet to gain momentum,” Chandrasekaran added.