ReNew Power, which is one of the largest wind and solar companies in India, and Rajalakshmi Wind Energy, part of the Chennai-based Rajalakshmi group, have submitted their bids with the National Company Law Tribunal for Regen Powertech, a company that used to manufacture wind turbine generators.
While the Rajalakshmi group confirmed that it had bid for Regen Powertech, ReNew Power has refrained from responding to emailed request for confirmation.
This, thus, marks Goldman Sachs-backed ReNew Power’s intention to foray into the manufacturing of wind turbines. Recently the company announced that it would start producing solar modules and cells, with investment of ₹2,000 crore for that purpose.
Right now, ReNew Power, promoted by Sumanth Sinha, a former executive of Suzlon and son of the former Union Finance Minister Yashwant Sinha, is only an energy company with close to 10 GW of wind and solar capacity under its belt.
Regen Powertech, promoted by Madhusudhan Khemka, a scion of the Khemka family which in the early 1990s were pioneers in wind energy in India through its company, NEPC Micon. Regen Powertech used to produce permanent magnet-based gearless wind turbine generators of nominal capacity of 1.5 MW from its two plants, Tada near Chennai and Udaipur (Rajasthan), with technology from Vensys, Germany—a company which has since been taken over by Goldwind of China.
In 2014, Regen Powertech developed in-house a 2.8 MW machine, whose capacity could be scaled up to 3 MW. The intellectual property is said to be valuable in today’s market, which is veering towards higher capacity machines.
Experts say that Regen Powertech could not stay put in the market after 2017, when the government brought in ‘tariff based competitive bidding’ for allocating capacities to energy companies—an auction system, where the company that offered the lowest tariff got to sign long-term power purchase agreement with the government-owned company, SECI. As a result of the intense competition wind tariffs fell to record lows.
They fell first to ₹3.46 a kWhr in February 2017 compared with the lowest of ₹4.16 in Tamil Nadu, earlier, and then to as low as ₹2.44 a kWhr. Low tariffs in turn put pressure on turbine manufacturers.
Industry observers also say that a rift between the promoters and the principal investor, Prabhakar Rao of Nuziveedu Seeds of Hyderabad, created working capital strains. Because of this, the company suffered despite having a good product. In a scenario when only those turbine manufacturers who had deep pockets could remain in business, many such as Regen Powertech could not.
In the good days of 2015-16, there used to be several wind turbine manufacturers in the market—Suzlon, Gamesa, Enercon, Senvion, Vestas, Inox, GE, Nordex and Regen Powertech. Today, the market has practically shrunk to three players—Suzlon, Siemens Gamesa and GE, with Vestas being more focused on exporting from here.