Tata Power to add 100-150 MW wind power capacity per year

Ratan Tata-led Tata Power aims to have at least a 25 per cent of its power generation or around 8,000 MW from clean sources by 2017 and will invest around Rs 5,000 crore in wind-energy alone, a top company official said. "We have set ourselves a target to achieve 25 per cent of our total generation from clean sources by 2017. These will comprise wind, solar, hydro, geo-thermal and gas. In wind-power alone, we will be investing around Rs 5,000 crore," Tata Power's executive director-strategy & business development, Banmali Agrawala, said in Mumbai.

The company, which presently has a little over 200 MW of wind capacity, plans to give a strong thrust to wind-energy as "it is the most commercially viable and established form of renewable energy," he said.

The company is presently in the process of rolling-out 150 MW and an additional 750-800 MW will be added at the rate of around 100-150 MW annually through to 2017.

It costs around Rs six crore for generating 1 MW of wind-power presently, Agrawala said.

In solar, the company aims to have 300-400 MW capacity by 2017. The first steps will be taken by end-this year with the commissioning of a 3 MW plant at Mulshi in Maharashtra, he said.

Tata Power is also all set to sign a Power Purchase Agreement (PPA) with the Gujarat Government for a 25 MW plant to be commissioned by end-2011.

"This plant will be set up in Mithapur on land owned by Tata Chemicals and we hope to sign the PPA by end-this month," Agrawala said.

In geo-thermal, Tata Power is already engaged in a 240 MW project in Indonesia in a joint venture with Origin of Australia, which it plans to commission in five-years.

Tata Power and Origin hold a 47.5 per cent stake each with the balance held by a local company.

"We are eyeing another 600-700 MW in Indonesia and also other markets with a good geo-thermal potential by 2017. Apart from Indonesia which lends itself to geo-thermal, we feel there is a great potential in Africa and we plan to scout for assets there as well," Agrawala said.

It costs around $3.5 million to generate 1 MW of power (geo-thermal) and while Agrawala would not give any investment figure, going by the above, it could entail a total investment of between Rs 8,500-9,000 crore for the 600-700 MW.

"We would like to work with our partner, Origin, not only in Indonesia but also in other markets as well," he said.

For gas-based power, Tata Power has applied for gas allocation, he said, adding that the company possesses the expertise in this field and has also zeroed-in on potential sites.

"We are presently fine-tuning our plans here," he said.

Pricing of gas is still an issue and there needs to be a greater clarity on policies. Once these issues are sorted out, we will go full-steam ahead on gas," Agrawala said.

On hydro, in which the Tata Group has been present for nearly a century, the company is contemplating bidding for a clutch of projects in Himachal Pradesh, Tata Power's Executive Director-Operations, S Padmanabhan, said.

Tata Power, which now has a capacity of 447 MW in hydro, is presently engaged in constructing a 114 MW plant in Bhutan in a joint venture with the Bhutanese Government. It is also developing an 800 MW plant in Nepal in a joint venture with Norway's SN Power .

Tata Power to Shun India's Solar Auction as Projects Maybe Unprofitable

ion on concerns that terms set by the government will make it difficult for projects to be built profitably.

“We haven’t bid for the National Solar Mission,” Banmali Agrawala, executive director of strategy and business development, said in an interview in Mumbai on the plan to generate 20,000 megawatts of power from the sun by 2022.

The decision by Tata Power, the generating unit of India’s biggest industrial group, not to take part in the first bids highlights concern that the plan is failing to draw companies with the skills and resources to jumpstart the program.

That could delay the development of India’s solar industry, which potential investors including the World Bank and atomic reactor maker Areva SA see as one of the world’s most promising. India gets about 300 sunny days a year in most of the country.

“These are bad signs,” said Ashish Sethia, lead analyst at Bloomberg New Energy Finance in New Delhi. “Many large players have either not bid very aggressively or stayed away from bidding.”

European governments including Spain, Germany and France are curbing solar subsidies that set off a boom of investment and spiraling state renewable-energy costs. India is seeking to avoid such problems in part by awarding capacity to developers offering the deepest discounts to the rate at which they’ll sell their electricity.

‘Piece of Cake?’

That could backfire should developers submit bids underestimating the cost and complexity of setting up solar plants, Agrawala said.

Some of the bids may be “a little aggressive,” Agrawala said. “We do hope that the people who are bidding those numbers understand what it means to set up a solar project. It’s not a piece of cake.”

The government set an initial selling price of 17.91 rupees (39 U.S. cents) a kilowatt-hour for solar photovoltaic projects and 15.31 rupees for solar thermal projects. Bids have been submitted offering discounts of as much as 4 rupees to those rates, he said.

“There is definitely a risk that a number of projects might either be delayed and some even be shunned completely at later dates” as developers find themselves unable to execute at quoted rates, New Energy Finance’s Sethia said.

State Alternatives

India’s wealth of sunny days provides 5,000 trillion kilowatt-hours per year of solar energy equivalent, according to the Ministry of New and Renewable Energy. In comparison, India’s projected total energy consumption this year is a fraction of that, 848 billion kilowatt-hours, a ministry report showed.

The country’s Solar Mission initiative seeks to draw investment to the sector by offering incentives including special tariffs and a power-bundling arrangement designed to assure projects of a buyer for their electricity. It has also set restrictions, including limits on solar equipment imports and a 5-megawatt limit on any one developer.

“To restrict the size to just 5 megawatts per business group we felt was too small,” Agrawala said. “Also, you’re not allowed to import equipment. As an owner, I’d like to discover what is the least possible price in the global markets.”

Tata Power determined it would have trouble raising loans from banks under the program because it wasn’t clear whether the designated power buyer, a unit of state-run utility NTPC Ltd., has the financial backing to ensure developers are paid for what they generate, Agrawala said.

Mumbai-based Tata Power is setting up a 25-megawatt solar plant in western Gujarat under a separate state program, Agrawala said. It expects to sign a power purchase agreement with Gujarat state this month and commission the plant by the end of 2011, he said.

“Serious players are still exploring other state-based mechanisms and the success of the sector will also be dependent on the success of those schemes,” Sethia said.

Tata Power to invest around Rs 5,000 cr in wind energy by 2017

Ratan Tata-led Tata Power aims to have at least a 25 per cent of its power generation or around 8,000 MW from clean sources by 2017 and will invest around Rs 5,000 crore in wind-energy alone, a top company official said. 

"We have set ourselves a target to achieve 25 per cent of our total generation from clean sources by 2017. These will comprise wind, solar, hydro, geo-thermal and gas. In wind-power alone, we will be investing around Rs 5,000 crore," Tata Power's executive director-strategy & business development, Banmali Agrawala, said in Mumbai. 

The company, which presently has a little over 200 MW of wind capacity, plans to give a strong thrust to wind-energy as "it is the most commercially viable and established form of renewable energy," he said. 

The company is presently in the process of rolling-out 150 MW and an additional 750-800 MW will be added at the rate of around 100-150 MW annually through to 2017. 

It costs around Rs six crore for generating 1 MW of wind-power presently, Agrawala said. 

In solar, the company aims to have 300-400 MW capacity by 2017. The first steps will be taken by end-this year with the commissioning of a 3 MW plant at Mulshi in Maharashtra, he said. 

Tata Power is also all set to sign a Power Purchase Agreement (PPA) with the Gujarat Government for a 25 MW plant to be commissioned by end-2011. 

"This plant will be set up in Mithapur on land owned by Tata Chemicals and we hope to sign the PPA by end-this month," Agrawala said. 

In geo-thermal, Tata Power is already engaged in a 240 MW project in Indonesia in a joint venture with Origin of Australia, which it plans to commission in five-years. 

Tata Power and Origin hold a 47.5 per cent stake each with the balance held by a local company. 

"We are eyeing another 600-700 MW in Indonesia and also other markets with a good geo-thermal potential by 2017. Apart from Indonesia which lends itself to geo-thermal, we feel there is a great potential in Africa and we plan to scout for assets there as well," Agrawala said. 

It costs around $3.5 million to generate 1 MW of power (geo-thermal) and while Agrawala would not give any investment figure, going by the above, it could entail a total investment of between Rs 8,500-9,000 crore for the 600-700 MW. 

"We would like to work with our partner, Origin, not only in Indonesia but also in other markets as well," he said. 

For gas-based power, Tata Power has applied for gas allocation, he said, adding that the company possesses the expertise in this field and has also zeroed-in on potential sites. 

"We are presently fine-tuning our plans here," he said. 

Pricing of gas is still an issue and there needs to be a greater clarity on policies. Once these issues are sorted out, we will go full-steam ahead on gas," Agrawala said. 

On hydro, in which the Tata Group has been present for nearly a century, the company is contemplating bidding for a clutch of projects in Himachal Pradesh, Tata Power's Executive Director-Operations, S Padmanabhan, said. 

Tata Power, which now has a capacity of 447 MW in hydro, is presently engaged in constructing a 114 MW plant in Bhutan in a joint venture with the Bhutanese Government. It is also developing an 800 MW plant in Nepal in a joint venture with Norway's SN Power .