Companies

Tata Power seeks long-term funding for micro grid initiative

Venkatesh Ganesh Mumbai | Updated on February 05, 2020 Published on February 05, 2020

Representative image   -  Bloomberg

Tata Power is looking for funding from long-term capital providers such as foundations and sovereign wealth funds to give a further fillip to its micro grid initiative.

In November 2019, Tata Power, along with Rockefeller Foundation, launched an initiative to set up 10,000 micro grids over five years, in an effort to provide electricity across places where electricity is scarce or unavailable. In line with this, it formed a company TP Renewable Microgrid, which will be operated and managed by Tata Power.

“We are looking at long-term capital with relatively lesser return expectations,” Tata Power CEO Praveer Sinha told BusinessLine. Foundations such as Omidyar, United Nations Foundation and sovereign wealth funds such as CDPQ invest in sustainable ventures.

A micro grid is a mini version of an electric grid that serves a smaller geographic area, such as a college campus, and can power appliances like fans, refrigerators and TVs.

TP Renewable Microgrid and Rockefeller will implement this initiative in collaboration with Smart Power India (SPI) and the Institute for Transformative Technologies.

SPI is an initiative of the Rockefeller Foundation which would give technical expertise and the Institute for Transformative Technologies works in the area of sustainable development.

The initial micro grids are proposed to be set up in Bihar.

The push for micro grids is coming at a time when the world is moving from conventional to renewable energy, thanks to the harmful effects caused by the latter on the environment. India has set a goal of producing 40 per cent of its electricity from non-fossil fuel sources by 2030.

However, on the ground, 70 per cent of the power is generated from fossil fuel. More than 40 per cent of rural enterprises in states like Bihar and Uttar Pradesh relying on diesel, which is non-grid.

“There is a larger construct of the government wanting to provide 24/7 power. How that can be achieved at very affordable costs — This is where we come in,” said Sinha.

Where Tata Power is looking to differentiate is in trying to build an ecosystem ranging from power producers, to distribution companies, and smart meters and getting the nod from people in small towns and villages.

“The only challenge we see is in people accepting it. But over time they will,” said Sinha, pointing to Tata’s legacy of building communities. Another area where Sinha sees the effort is different has to do with micro entrepreneurship.

With access to continuous power, entrepreneurship opportunities in healthcare and digital learning open up.

“There is also a possible shift in socio economic conditions which could arrest urban migration, as people in rural places would get earning options,” according to Sinha.

TP Renewable Microgrid aims to provide a competitive and cleaner source of power, in addition to expanding access, lowering effective power electricity costs and carbon emissions by 10 lakh tonnes per year. Then there is also the reduction in the amount of diesel burned, which according to estimates, could be slashed by 5.7 crore litres per annum.

Published on February 05, 2020
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