HFE Srivatsan Iyer CEO, ET EnergyWorld

New Delhi: India needs to resolve issues related to land allocation and transmission connectivity for renewable energy (RE) projects and also focus more on creating wind power capacity to make the ambitious target of 50 GW of annual RE capacity a reality, said Srivatsan Iyer, Global Chief Executive Officer (CEO), Hero Future Energies. “The government’s target of creating 50 GW of capacity per annum is commendable. To achieve it, we will have to address challenges on the ground, especially with regard to evacuation capacity keeping pace with the installation of new projects. Similarly, I hope we find an effective solution to the issue of land availability and right of way (RoW),” Iyer told ETEnergyworld in an interview.

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Hero Future Energies is the renewable energy arm of Hero Group, with a portfolio of 4.5 gigawatts of renewable energy projects in India, Ukraine and Vietnam. The company is also backed by global investors including International Finance Corporation (IFC) and KKR.

Iyer said the industry is waiting to see what happens with green hydrogen from a policy perspective. “The recent exemption from the Approved List of Models and Manufacturers (ALMM) requirement for renewable energy production towards green hydrogen in SEZs and EOUs was very positive. We hope that in addition to the ALMM exemptions, we will also see exemptions from basic customs duty (BCD) on modules,” he said.

According to Iyer, the potential for renewable energy in India looks more promising than ever, driven by a number of factors, including new types of complex round-the-clock tenders (RTCs) for more dispatchable renewable energy.

While renewable energy from stand-alone wind or solar power is undoubtedly cheap, costing between Rs 2.60 per unit and Rs 3.40 per unit, converting it into dispatchable supply requires purchasing additional power at rates of over Rs 6.50 per unit for a significant part of the day. In comparison, a wind-solar-battery hybrid project, which has been found to charge tariffs ranging from Rs 5.25 per unit to Rs 5.40 per unit, is more economically competitive and available round the clock with 80-90 per cent compliance.

“We also need to install at least 10-15 GW of wind capacity per annum, up from the current trend of 3 GW. This would require adequate wind turbine (WTG) infrastructure. In this regard, many domestic manufacturers have scaled up to 15 GW per annum and hence, supply would not be a bottleneck,” Iyer said.

He added that the next bottleneck could be installation infrastructure, including wind turbine assembly and availability of cranes and engineering, procurement and construction (EPC) services. “We don’t see them sustaining the pace of 10-15 GW of wind capacity per year. But the most critical aspect where the industry needs government help is land. The private sector can take care of the rest of the issues,” Iyer said.

When it comes to green hydrogen, the government needs to step up and consider introducing a demand mandate and relaxing charges such as import duty on electrolysers and batteries, as well as providing some exemptions from transmission charges and surcharges, etc.

HFE has won five RE tenders in the last 12 months. All of these tenders are for the supply of dispatchable peak renewable capacity. This is in line with the company’s broader strategy to secure participation in these more technologically intensive and complex tenders.

“There are already 4-5 additional bids that have been floated for the next few months. However, the biggest challenge remains connectivity. There has been a rush for connectivity, especially in areas where wind speeds are attractive,” Iyer said. The industry is currently engaged in multiple discussions with MNRE to ensure that the timeline of planned bid launch dates aligns with the readiness of new evacuation capacities. The idea is to ensure that projects are not compromised due to substation launch issues.

HFE is currently implementing projects worth 2.6 GW from the tenders it has won. Of this, PPAs have been signed for 900 MW and construction is already underway, even as it waits for PPAs to be signed for the remaining 1.7 GWp of capacity. All are expected to be signed by September-October this year.

Iyer said the company is also working on some opportunities in the commercial and industrial (C&I) open access space, which will also round out its project pipeline in the near future. Overall, the company is targeting an annual capacity of around 400 MW per year of C&I open access projects.

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