Renew Power, India’s largest clean energy firm, plans to double its portfolio of running plants and projects under implementation to 10,000 MW in five years, an ambitious growth plan that has cheered its major investor Goldman Sachs.
The expansion would require an investment of Rs. 40,000 crore to Rs. 50,000 crore, going by the average cost of projects in the industry, although the company did not share financial details. Project economics vary across the country, depending on the cost of land and the intensity of sunlight or wind.
Sumant Sinha-led Renew Power’s aggressive expansion is part of the growing corporate interest in the sector in which Gautam Adani is also expanding his presence with the aim of becoming the world’s biggest renewable energy company with a capacity of 25,000 MW.
"This year despite the impact of Covid-19, the government has been actively bringing out new bids in the renewable energy space and companies have responded enthusiastically," Renew Power chairman and managing director Sumant Sinha told ET.
Goldman Sach’s MD of merchant banking division Michael Bruun said growth prospects are exciting. "We are excited about our investment in Renew and the journey ahead as the company continues to grow and becomes more integrated across the value chain," Bruun said.
Goldman Sachs holds 48.6% stake in Renew Power and has backed the company for a long time. Renew Power has also raised debt and equity from other major global investors including Abu Dhabi Investment Authority, Canada Pension Plan Investment Board, JERA and Global Environment Fund. Since its inception 10 years ago, the company has seen foreign direct investment of over $1.4 billion from various investors.
Renew already has the country’s largest operation capacity of 5,600 MW, which along with capacity in the pipeline adds up to 10,000 MW.
In May, Renew won a first of its kind 400 MW round-the-clock (RTC) bid, which promises an 80% plant load factor (PLF) annually at Rs. 2.90 per unit. To ensure the PLF efficiency, Renew is likely to set up a plant with capacity higher than 1 GW, bringing the total to 2 GW in the past six months. These will be online in the next two years, Sinha said.
Out of the 2 GW, 800 MW worth of bids were won during the Covid-19 period.
The RTC bid will allow RE companies to provide stable power to the grids, plugging a major challenge against coal-based power plants and other conventional energy sources.
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