Private sector power companies in India seem to have realised the business case behind the fuel cost advantage of renewable energy projects over conventional power projects and are now looking to expand their renewable energy portfolios.
The second-largest private sector power generating company in India, Tata Power, is planning to expand its renewable energy portfolio through its subsidiary Tata Power Renewable Energy Limited (TPREL). The company is planning to acquire wind energy projects from three generators, CEO Rahul Shah said recently.
The wind energy capacity in question is about 300 MW spread across southern India. The projects seem to be operational under long-term power purchase agreements at “competitive tariffs,” Shah added.
Tata Power had earlier announced that all new capacity to be added over the next two years would be based on renewable energy. It plans to commission or acquire about 800 MW capacity based on wind, solar, hydro, and waste-to-power technology. This skewed business plan seems a result of the legal battle the company is fighting over tariffs for one of its coal-based power plants.
Tata Power had commissioned India’s largest thermal power plant in Gujarat some time back. The tariff for the project was very low, determined through an auction conducted by the Indian government. The 4 GW Tata Mundra power plant is based on super critical coal technology with significantly lower emissions intensity compared to other coal-based power plants in the country.
The power plant, however, uses coal imported from Indonesia, as Indian coal has higher ash content and lower calorific value. Following restrictions placed by the Indonesian government on the export of coal, the cost of generation exceeded the tariff quoted by Tata Power. The company has filed a petition to increase the tariff and is facing stiff resistance from the state utilities over this issue.
Tata Power is looking to develop its renewable energy subsidiary into a full-fledged business by adapting to the changing power scenario in India. Renewable energy projects are finding favour over thermal power plants, which are struggling with debt and lack of adequate supply of coal and gas.
I don't like paywalls. You don't like paywalls. Who likes paywalls? Here at CleanTechnica, we implemented a limited paywall for a while, but it always felt wrong — and it was always tough to decide what we should put behind there. In theory, your most exclusive and best content goes behind a paywall. But then fewer people read it! We just don't like paywalls, and so we've decided to ditch ours. Unfortunately, the media business is still a tough, cut-throat business with tiny margins. It's a never-ending Olympic challenge to stay above water or even perhaps — gasp — grow. So ...
Sign up for daily news updates from CleanTechnica on email. Or follow us on Google News!
Have a tip for CleanTechnica, want to advertise, or want to suggest a guest for our CleanTech Talk podcast? Contact us here.