1. You started AMP Energy in India. So, what is the current capacity AMP Energy India has and what is the pipeline and the vision for the coming 1-2 years, and what is the long-term vision of your company?
Currently, we have a portfolio that is in different stages which are the construction, operation or in development. So, the total portfolio that we are controlling today is a 2-gigawatt peak. And out of that, we are perhaps the only fifty balanced producers there, because we have 50% in the C&I business and 50% in the utility business. So in the utility business, we have a nearly 1-gigawatt peak now which is also diversified into solar then floating solar as well as hybrid. So in hybrid we have around over 400 megawatts with the liquidity side and now we also want the largest floating solar project to be built in the country at Omkareshwar Dam in MP so, that is the 1-gigawatt peak on the utility side. And then nearly 1-gigawatt peak on the C&I side which is more focused on the ground mount with a small component in distributor generation.
So as far as a ground mount open access is concerned we have also a very nicely diversified portfolio in different states so, we have a portfolio across the north, south, east, and west part of India. And we have opened up new markets also in other parts like in Maharashtra we have open access, in Gujarat, we have hybrid open access, in Karnataka we have done repeat plants there. In open access in the northern part of India like in UP, we have done repeat plants there and in the eastern part of India, we are building open-access plants in Odisha and other parts of the east and distributed generation in the C&I portfolio. We have also tried to do unique landmark projects in the rooftop sector, like we will be completing the largest plant in the west for a Volkswagen and a half-megawatt rooftop and the Kochi metro is also a unique project for us.
Looking at the future, the unique thing that we are trying to build in India is the utility balance, where we are serving the discounts directly to the industry. So we are selling green power to the government there. And in the other business, we are selling green power to the industry.
2. In terms of the growth of renewable energy and hydrogen and the entire sustainability ecosystem, what kind of opportunity are you looking for in India?
People are moving towards more dispatch-able clean energy and are asking for a hybrid, but now they have started asking for round-the-clock power also. So, the requirement of the power consumers has grown towards dispatch-able clean energy and that’s the need that we are seeing in the market.
Secondly, we have seen that they are very driven by most of the people, who are consuming power to get 200% renewables for economic reasons, as well as for environmental reasons. So the push is very strong and it is very distinct. But now all of our customers that are potential customers that we are talking to, are moving forward with the solutions, and are adopting renewables.
The third thing, that we see emerging because of the policies that the government has provided is sort of pushing us in a way that is promoting local manufacturing now, because 10 years ago when I was in another institution we had invested in solar manufacturing and wind manufacturing, and we did see the challenges there, but now with certain sort of policies that are there, is promoting solar manufacturing in energy storage and electrolysers from green hydrogen. So, there is a big push on manufacturing in India now.
The last but not the least as a country, we should have our own manufacturing units because these are short-term ups and downs but in the long run, we will look back and see that actually because of this thing we suddenly became one of the largest manufacturers in the world for renewable energy. But the fourth part is actually in terms of cost.
3. The entire international scenario has propelled the moment towards green power so, what kind of changes do you see coming up and how would you tweak your organization find yourself in your organization and its goals, and capture this huge opportunity?
There are opportunities at any point in time, when the sector started there are always some opportunities and some issues. So, that is going to be the way it is. We have always tried to strategize, and create a strategy to sort of drive-through this thing, and convert some of those issues into opportunities, and the opportunities that they have converted into solutions essentially. So obviously, there is a big push towards going to RE 100% renewables, and that actually was triggered definitely by the green targets but more importantly by economic savings actually.
Because the cost has gone down drastically in the last two to three years, certain people woke up instantly by that fact, so I will get a 20 to 30% decrease in my operating cost with hardly any investment, and also it meets my green target. So, that woke the entire sector up actually. The people who consume the power adopt renewables. Now, that’s on the commercial-industrial side government, and the utilities also woke up to the fact, that now given the power shortage that we saw in the country and the power prices spiking up. They also hopefully should understand that it is not needed to have like two, two and a half rupees kind of power. You will be fine with even three, three, and half rupees of renewable power for utility customers, so it makes commercial sense rather than buying twelve rupees. And that is a reality check that has happened, and what certain entities on the utility side were expecting is not backed by logic essentially.
Now I would say people are realizing that, you need to pay because a lot of people see almost a huge amount of PPS, and there was a backlog like NTPC options. Ultimately the auction was held two and a half years back but since last December, some of them getting PSS signed because people started seeing that the cost is rising now.
4. How do you see this coal scenario and especially in the current circumstances, will it make the opportunity bigger for all of us?
The coal scenario has improved for now, but it’s not going to be very different next summer also. So we are one year to get our act together to add at least 10-gigawatts of renewables this year, and we are just nine months remaining otherwise we will face the same situation but we have these nine months to put our act into place and I believe ALMM are looking at it for a year. If there is any other grandfathering, that will help a lot, since it is essential for the additional duty impact. With these two things all the PSS will get signed, and then we can see this huge capacity addition being done. So at the end of the day, our customers and potential customers don’t end up buying twelve rupees per unit of power essentially.
5. In terms of the technology of modules and inverters, one of the biggest pressures in front of you or any IPP would be to reduce the LCOE so, what kind of technology and pricing road map do you see for modules and inverters?
On the technologies road map for the modules essentially, we had completely switched to mono and the poly was almost zero. Now because of the cost pressure modelling, we got back to Poly again because they don’t have a choice. So sometimes the intent of the policy is a noble one, but at the end of the day manufacturers in India have raised the prices to match whatever you have to pay by importing from outside, which has increased the prices. So, we don’t have a choice for now.
Under the technology road map, it will be more of mono only than bifacial, which makes a lot of sense in certain parts of the country. And also things like TOPCON is going to come up after a few years, that’s the trend that we are seeing for now and most of the equipment that people are putting together in India can accommodate mono facial, and bifacial as well as TOPCONs with certain modularity in the manufacturing. So, that’s the technology road map in manufacturing on the cells and module site, and currently, the LCOE is going back as high as it was in 2000. Once the cell and the wafer start getting established, we’ll see an LCOE reduction in the next 2 years but not back to the level it was.
6. In the last couple of years, what kind of changes have you seen in the scenario of equity financing projects?
Return expectations have not changed a lot but they are appreciative of the fact that India is a very large opportunity, an opportunity that provides diversification because it’s not only utility, it is C&I, utility, and the other fringe opportunities also, and all in the value chain. So it’s an enormous opportunity that has its risks but the returns are commensurate with that essentially. So basically, the return expectations have not changed a lot. Still, the realization that some of the return expectations might be a bit unrealistic is certain and they have also readjusted the return expectations because they have to deploy capital also. So when they have to deploy capital, they have to deploy in competing with different parts of the world. Now what we do well is that, we can deploy a lot of capital at a pace, which is relatively faster than other parts of the world because the gestation period for the projects is faster, that’s why we see a lot of new investors coming in, and there are equity improvement tools also. So, the cost of debt was coming down but now it is again starting a little bit going up.
7. How good the PRS scheme is going to work out. And what kind of expectations do you have from them?
The PRS scheme is a significant opportunity for all of us. It’s a kind of support to manufacturing by the Government. The only thing is that, it will take time actually for this manufacturing capacity to come up, because there are people who have to tie up financing for a lot of things, which have to be done. So, it will take at least 2 years of time duration, till we see actual sort of output from the scheme, where a generator like us can buy those things. So, in my outlook, it is a good scheme. It promotes manufacturing, but the demand-supply situation needs to be addressed immediately, because this is more of a long-term scheme, that reduces import duty on sales, and which diverge the ALM by a year.
8. Some insights about the green hydrogen and various colours of hydrogen, the technology, and the possible impact it can have.
A lot of customers do need hydrogen in their process; the government has played a significant role by creating a reduction in the transmission cost, if you are supplying green hydrogen. So, they are reducing the cost of power, which is the key component in the cost of hydrogen essentially by giving that incentive. The second leg is electrolysers; people are deploying that manufacturing in India. So for electrolysers and those manufacturers, this could be a scheme to promote the second element.
So, the demand creation is already there because customers are open to emerging green items, but the cost has to come down essentially.
Green hydrogen is on the take-off stage, but the storage is already technology matured. There is a manufacturing capacity that is established in India. So, some subsidy can bring it commercially viable and two or three things in terms of the wind and the GST, the cost has increased on the wind components that also should be reduced, and also because of the increased steel cost, the cost has increased on wind too. So, we should always look at the future and be prepared for it, and make policy interventions and good steps, as we are doing in green nitrogen or storage. But the mainstream solar and wind need a firm push this year to make sense, because we are already deployed, but these small tweaks will make it commercially viable and it will also get more investment into India by the equity investors.
