Tata Power plans to boost its clean-energy generation to one fourth of its targeted capacity of 26000 MW by 2020

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Sustainability Outlook spoke to Rahul Shah, Chief of Business Development, India Business and Renewables at Tata Power about the company’s progress on its clean energy capacity targets and the road ahead

Could you provide an overview of the current renewable energy portfolio of Tata Power?

Tata Power has aggressive plans of generating 26000 MW by 2020 and intends to have a 20 - 25% contribution from "clean power sources". Company’s Renewable Energy presence includes:

Solar: The Company is one of the leading solar power companies with a total operational capacity of 28 MW+ with 25 MW solar photovoltaic (PV) power project at Mithapur, Gujarat and 3 MW at Mulshi, Maharashtra. Our subsidiary Tata Power Delhi Distribution Ltd has also commissioned a 1 MW grid-connected roof top solar plant in Delhi. A 60.48 KWP solar power plant has also been functional on top of one of the building at our office in Carnac Bunder, Mumbai. Tata Power has also partnered with Sunengy, Australia to build the first floating solar plant in India by end of FY2013.

Wind: The Company is a leading private wind generation company with an installed capacity of 375 MW spread across Maharashtra, Tamil Nadu, Gujarat and Karnataka. Our aim is to add 100-150 MW of wind every year till 2015. Further, Our South Africa JV with Exxaro called Cennergi has been shortlisted as preferred bidder for two wind projects 139 MW Amakhala project and 95 MW Tsitsikamma project.

Hydro: We have been a pioneer in hydro generation. Currently we have an existing capacity of 447 MW in Maharashtra alone that feeds clean power to the city of Mumbai.  Tata Power has also entered into an exclusive partnership with Norway-based SN Power to develop hydropower projects. Currently, the JV is constructing the first 880 MW project in Tamakoshy, Nepal. Further, the consortium has bagged the “Dugar Hydro Electric Project” in Chenab Valley in Himachal Pradesh, India. Tata Power also has a JV with the Royal Government of Bhutan under which it is implementing a 114 MW Dagachhu Hydro Project jointly with the Druk Green Power Company.

Geothermal: Geothermal energy is a key focus area as it can enable large-capacities to co-exist with a much lower carbon impact. Further it is the only renewable source that is likely to be available 24x7.  Tata Power along with our consortium partners-Australian company Origin Energy and PT Supraco Indonesia have won the bid for a 240 MW geothermal project in Indonesia which is under development. 

Waste gases based power plants: Tata Power has set up various plants at Haldia and in Jamshedpur based on the blast furnace and coke oven gases which are waste gases from steel making process thus reducing greenhouse gas emission significantly.

Tata Power will continue to pursue avenues to add ‘clean and renewable energy’ generation capacities to increase renewable energy portfolio, wherever possible.

How successful would you say has your Mithapur solar plant been in terms of power generation? 

Tata Power’s Mithapur project has come up under a Power Purchase Agreement (PPA) signed between our subsidiary, ‘Tata Power Renewable Energy Limited’, and Gujarat Urja Vikas Nigam Limited. It is one of the largest of its kind in the country and has so far generated 43,000MWh since its commissioning in Jan’12. The Mithapur solar power plant uses the modular, proven, and widely deployed Crystalline Silicon Photo-Voltaic Technology to maximize power generation. The project helps in reducing an annual average of 37,696 tons of Carbon Dioxide, by producing 39,597 MWh per year (average) equivalent amount of clean energy.

We have also registered the project with the United Nations Framework Convention on Climate Change (UNFCCC). This will allow us to earn and trade Certified Emission Reductions (CERs) granted to this renewable energy project.

Wind energy is the only renewable which has achieved grid parity. Could you tell us something about your outlook on micro-wind turbines and is Tata Power working on any micro-wind turbine based projects? 

Tata Power has set up a test bed of micro wind turbines at one of our locations to test various micro-wind turbines.  This test bed will help us determine the most cost-effective forms of micro-wind energy.  Micro turbines, of capacities of 2 kW, 5 kW and 12 kW, have been installed and are being monitored for their performance under Indian conditions. These micro-wind turbines could emerge as an integral part solar- wind hybrid energy generation systems and could be installed on rooftops or in remote, non-grid connected areas where there is sufficient wind energy.

Could you tell us something about some of your other renewable energy projects in the pipeline?

Tata Power plans to boost its clean-energy generation to one fourth of its targeted capacity of 26000 MW by 2020. Our total investment in solar and wind energy so far is Rs. 2393 crores and our aim is to add 100-150 MW of wind every year till 2015. . The Company is in the process of deploying resources in various geographies to understand the market dynamics and scout for opportunities.

Currently the Company is also in the process of evaluating different business models for distributed power generation and supply to the rural areas. We believe in order to deliver sustained electricity to all our consumers, it is important to join hands with the policymakers and regulators to make requisite advancement in technology, strengthen the renewable energy portfolio, accelerate the development of cost effective energy efficiency programs and catalyze demand side management programs at the consumers’ end.

Apart from the above, we are also experimenting with span of unique pilot projects across energy sources:

• Biomass gasification: A 250kW system using rice husk is proposed to be installed at the Tata hydro power plant near Karjat. If successful, this technology can be taken to hundreds of villages.

• Concentrated photovoltaic (C-PV): A 13.5kW pilot unit is being deployed at Walwhan lake in Maharashtra. In this project, sunrays would be concentrated on PV cells and the assembly will float on the lake in order to cool the cells. If successful, we are hoping to scale and deploy this across all the lakes that provide hydro power to Tata plants in west Maharashtra. There is a potential to generate 1000 MW through this model.

• Solar powered telecom towers: More than 600,000 telecom towers in India use diesel generator sets to provide power to their antennas. Our group company, Tata BP Solar is providing solar PV panels that will replace the gen-sets at 25 such installations. This technology can be upgraded to augment power to local grids.

• High altitude wind: Tata Power is planning to test a 35kW turbine mounted on a blimp that will float 333m above the ground to catch winds that are more intense and sustained at that altitude.

We have already also discussed our interest and pursuits on the micro-wind side.

What is your view on the regulatory and financial environment for renewable investments in India? 

A pragmatic, progressive and enforceable RPO mechanism is not only the need of the hour but will also be consistent with the spirit and vision of the Electricity Act, 2003  and subsequent policy measures including the NEP, NTP, Integrated Energy Policy, NAPCC etc.  Given the limitations of and on the conventional sources of energy, a long-term view needs to be taken to ensure energy security through development of appropriate indigenous alternatives.  A prudent and practical RPO mechanism would serve the objective well to enable these technologies to emerge as commercially viable alternatives. The achievement of the stated goal of 15% renewable energy by 2020 would largely depend on the effectiveness of RPO and remunerative Feed-in-Tariff (FIT) regime.

A progressive and supportive State policy on renewables provides a clear roadmap /vision but its effectiveness is subject to the applicable Regulations in the State. A State policy and the supporting regulatory framework complement each other in pursuing the promotional agenda, particularly when a capital intensive new technology needs to be supported.   The RE evolution in India - as across the globe - has been consistent with the framing of FITs and enabling mechanisms like must run, deemed generation, banking etc. The vision provided by the National Policy in terms of long term RPO, its acceptance by the Forum of Regulators and state level Regulatory commitments on not only progressive RPO compliance but also intra renewable targets will help shape the medium to long term visibility on renewable asset planning.

While inadequate enforcement of RPOs on account of sectoral issues such as opaque pricing of power to end user may temporarily blur the long term vision for renewables - the intent to promote renewable technology is nevertheless omnipresent, either through a direct policy prescription or through a regulatory push.   State Regulators need to device a more effective way to ensure RPO implementation, even in utilities having government control.

On financing, RE projects need to be made viable to narrow the gap with conventional power faster. The depressed capital markets have proved to be a good reality check for developers who are seeking easy valuations/exits.

Could you share with us your views on the tariff structure for power in the country and do you think there needs to a revision of current rates to enable renewables to compete in the power sector?

The real boost to the renewable sector including wind energy would come by strengthening the Renewable Purchase Obligations (RPO) mechanism. Since the renewable resources are not evenly distributed in the country, the RPO encourages setting up of large generation capacities at resource rich locations, and through a process of certification, the credits can be traded on CERC approved power exchanges, to obligated entities or voluntary buyers. The tariff structure can then be decided to compete in the power sector.

Considering that a wide section of our society remains un-electrified, could you elaborate on Tata Power’s efforts on decentralized micro-grids to provide access to these communities?

As mentioned earlier, we are in the process of evaluating different business models for distributed power generation and supply to the rural areas. Tata Power has joined hands with different national institutes like the Indian Institute of Technology, University Department of Chemical Technology in developing pilot and demonstration projects in the renewable resource power generation.

Distributed Generation Projects based on biomass as fuel are also being explored. Also, the Capex levels associated with gasifier based projects are being explored to make the smaller size DG plants feasible based on the applicable feed-in-tariff. The company is also testing a 2kW wind turbine that can be mounted on roof tops and provide power to homes. The technology is under pilot stage.

What are your views on the Phase 2 of the National Solar Mission? 

The National Solar Mission (NSM) is definitely a major step forward.  It has not just brought solar power onto the national scene but has also helped put India on the global radar, in so far as solar opportunities are concerned.  However, the key objective behind the Solar Mission would be achieved only if the framework and necessary industrial base for research, development, manufacturing and harnessing of solar power gets developed in the country to support appropriate growth and cost optimization for the benefit of the masses in an otherwise less favored country, in terms of energy resources.  We must always remember we have only a limited option in terms of commercial sources of energy and solar is one of our best opportunities.  We need to work expeditiously on continuation of SIPS initiative and similar other programmes for complete assimilation of technological know-how and for nurturing it to our advantage.

This interview was conducted by Anindita Chakraborty, a member of the Sustainability Outlook team.