Tata Power to grow RE business three-fold

ksenia kondratieva Mumbai | Updated on June 18, 2018

Plans afoot to venture into consumer segment

As thermal power sector is undergoing disruption from the renewables, Tata Power, one of the oldest and largest utility companies in the country is seeing further growth coming from renewable business as well as consumer-oriented services in the energy saving space.

Tata Power is planning to expand its renewable portfolio three times, from current 2,272 MW to around 7,500 MW in next 5-6 years, Praveer Sinha, Tata Power MD and CEO, told BusinessLine. “Today renewables account for around 30 per cent of our business, it may become about 45 per cent. Largely it will be organic (growth), but we keep on examining the assets,” Sinha added.

According to him, tendering activity in the renewable sector has improved with around 9000 MW expected to be tendered in next 3 months while about 3,000 MW has already been auctioned in the past one and a half months.

While the company will focus on solar energy generation the most, both utility-scale and rooftop solar, it will also actively participate in floating solar and offshore wind projects, Sinha said.

When asked about investments the company is planning to make to support its further growth in these areas, Sinha said it could be up to $1 billion in next 5 years.

“Our main investment is in renewable (space). The services business is asset-light, it doesn’t require large capex requirement, instead there is value for technology and knowledge,” Sinha said adding that the company has “enough internal accruals and profits” to take care of renewable capacity extension of another 5,000-7,000 MW in next 5-7 years.

Home automation

Tata Power is also venturing into consumer market with a branded product for home automation that is being designed by the company at the moment. The product will help consumers optimise use of electrical devices in their homes, it will also provide people an option of controlling their devices and equipment remotely through WI-FI network.

“We are coming out with product and software attached to it, we are now in the process of putting a pilot project in next 3-4 months,” Sinha said. “It will be simple, user-friendly and low-cost solution”, he added.

Russian opportunity

While Tata Power is trying out coal blending as well as sourcing coal from various location to optimise costs at Coastal Gujarat Power Limited (CGPL) operating the Mundra plant, it is also working on developing a coal mine in Russia’s Far East. “It is a good prospect, unlike in many other parts of the world, preliminary studies here indicate very good quality coal, so we are definitely examining this opportunity. We are looking at 2021-22 deadline (to start operations),” Sinha said adding that apart from the coal block itself the entire infrastructure for delivering coal form the mine has to be developed and this is taken care of by the Russian government. According to Sinha, the company is yet to work out the final structure of the project.

“The total investment on infrastructure, as I am told, would be about $250 million, there is another $500 million on the mine development. We still have to structure this, we are looking for funding support from the Russian government and it should be able to get banks, also some of the other countries, Belarus for example (to participate). It’s little premature at this stage, in next one year we will be on top of it,” Sinha said.

Published on June 18, 2018

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