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sterlite power: Sterlite Power to enter India’s renewables business, cater to industrial clients


Sterlite Power, a private sector power transmission infrastructure developer and solutions provider, is eyeing the renewables segment. The company has a portfolio of 30 projects covering approximately 14,602 circuit Kms of transmission lines across India and Brazil. This week the company’s Mumbai Urja Marg Transmission Limited (MUML), successfully commissioned 400kV Banaskantha, Kansari and Vadavi Transmission lines in Gujarat. Pratik Agarwal, Managing Director, Sterlite Power tells Kalpana Pathak the company is evaluating plans of building a sustainable energy platform.

  1. Is Sterlite Power planning to enter the renewables sector?
    We are currently evaluating our plans of building a sustainable energy platform that provides industries with round-the-clock solutions for their clean energy requirements. To combat climate change, the world has a goal of limiting the increase in the global average temperature to below 2° C above pre-industrial levels. Industries play a key in this journey; a few industrial houses have announced Net Zero or decarbonization targets, and many others are preparing to follow suit. Sterlite Power, with its legacy of addressing the toughest challenges of energy delivery, realizes the role it can play in this energy transition.
  2. Your company was planning to enter the battery storage business too. Any update?
    The need for storage as a grid element has been well recognized. Central Electricity Authority (CEA) estimates show that the requirement for storage deployment in the grid would be of 108 GWh by year 2030, and other independent estimates are also in the range of 95-100 GWh by 2030. The recent RPO notification by the government is a positive step for the segment. For the first time, the focus has shifted from a solar-led growth of renewable energy, to development of new wind and hydro capacities in a targeted manner, as well as a Storage Purchase Obligation. To facilitate this in the most optimal manner, other applicable benefits such as taxation and accelerated depreciation, that are available for RE need to be extended to energy storage projects as well. Government also needs to ensure that the targeted uptake of energy storage technologies does not get stuck. Large tenders for procurement of grid scale energy storage services are in the works from SECI and NTPC, totalling 4000 MWh, and more expected in the future. We continue to monitor the segment for further positive developments.
  3. What kind of capacity addition do you see in the renewable sector over the next 3-5 years?
    India wants to generate 50% of its electricity using renewables by 2030. This means that we will have to double up the pace of RE generation in the next few years. This is massive and as a nation if we want to achieve this, funding for renewables as well as Transmission infrastructure needs to go up in tandem. To meet the solar and wind capacity targets alone, BNEF has estimated a requirement of USD 223 billion of investments. For Transmission too, BNEF has projected 137 billion investments in this decade (up to 2030). Clearly, it spells enormous opportunities for the industry. Government policy must continue to drive the green energy adoption by incentivizing industries, consumers, and utilities to consume RE.
  4. How do you see the payment delays by Discoms impacting renewable energy production?
    The financial health of Discoms continue to shadow India’s power sector. While measures such as payment security and Letters of Credit serve as short-term remedies, improving Discom health is the only solution to this problem. Prime Minister’s recently launched Revamped Distribution Sector Scheme (RDSS) is expected to provide financial incentives linked to meeting certain targets, such as smart meter rollout. It is expected that it will help Discoms to improve operational efficiencies and reduce their losses; making them financially self-sustainable. In addition, privatisation of discoms to bring in efficiency in operations and best technology can be the important turn around step in improving financial health of the discoms, benefitting the sector at large.
  5. Analysts forecast slower growth for the power sector in the second and third quarters due to concerns of recession. Comment.
    It would be worthwhile to note that the growth in power demand hasn’t exactly followed the economy’s growth trajectory as per the data from the last 25 years. Despite the projection on slight deceleration in growth, the gap between India’s per capita power consumption (1208kWh) and that of the global average implies that demand growth is poised to accelerate in the medium to long term. In fact, FY23 is expected to be the second consecutive year in which power demand is likely to grow at over 6%. The current fiscal will also be the second year of power demand growing above pre-pandemic levels and the long-period average of 5%. Domestic manufacturing, diversifying end use of electricity, and access improvements with last mile connectivity will further pull up demand in the medium to long term.
  6. Changing climate is having an impact on solar as well as wind power generation. How do you see that impacting your operations?
    No segment is immune to the adverse impacts of Climate change. In the case of solar, the changing climatic patterns are leading to observed increase in aerosol cover and higher long-term temperatures leading to variability in PV production. For Wind, we are noticing a shift in mean wind speeds across different regions (increase in some regions and decrease in others) and higher variability from hourly to inter-annual levels. However, technology developments in wind and solar have the ability to combat these effects. We also need more and more hybridisation of projects (Wind + Solar/ Geothermal/ Storage/ Hydro) to increase the utilization of renewable energy in our energy mix. In the long term, we are certain that any sustainable solution to reversing climate change will have to involve massive efforts towards decarbonisation. The global energy transition currently underway, is an urgent and well-coordinated step to accelerate mitigation efforts towards this goal of sustainability.



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