Policy Implementation is the real challenge for RE-power in India : Mr. Sankalp Ved

Mr. Sankalp Ved is Electrical Engineer and Certified Energy Manager accredited by BEE (Bureau of Energy Efficiency) & he also did PG Diploma in Finance management. He is having with 9.3 years experience in Energy sector especially renewable energy.

He is presently looking after Renewable Energy Business in Ruchi Soya Industries Ltd. which comprises of 100 MW of wind power & 10 MW of Solar power Projects.  In past he also worked in Tata Power Company Ltd. Suzlon Energy Ltd. and Secure Meters Ltd

1.    What kind of market reports investors should look while investing?

 There are several reports currently available for RE projects, most of them mainly include and showcase past numbers in different formats. They dissect and analyze old transaction / deals in their own way. Even if any future projection is made, it is mostly guess work without any analytics involved. These should be included in a report but should not be the only part of any report.

Business Managers like me who are in RE investing company always await for reports which conduct analytic study of policies, notifications etc and make future analytic projections under various scenarios (best case/worst case). This practice is prevalent in USA but yet to be seen in India.

 

2.    Do you think policies and incentives are in India are enough for expected RE growth in India?

I personally believe that there are enough incentives and favourable policies for growth of RE. But the challenge is the implementation, which sometime is not done timely or not done perfectly, and this eventually defeats the sole purpose of particular policy.

It can be better understood by reviewing the latest REC trading numbers. There has been significant drop in the buyer to seller ratio. More than 11 lakh non solar RECs are available but buyers are less than 20%. The reason is insufficient enforcement of RPO. This does not mean that that the policy has flow or shortcoming, REC policy of India is one of most balanced in the world which makes it best.

Although there is some scope of improvement in areas like captive wind policy of few states which need more clarity.

 

3.    Renewable Purchase Obligation regulation implementation is matter of concern for all. What is your take on it.

 

As I indicated in above question, the implementation is definitely concern for all. But I still believe the demand of REC will not dry completely. Most of obligatory entities are Discoms which are Govt. owned. There is rare chance of default from them. Although poor health of discom was the concern which is also taken care to a larger extent for the time being by the reforms and loan restructuring announced recently.

Still, the monitoring mechanism is must for long term sustainability of REC modal. This year is very crucial and defining.

 

4.    Solar or wind what will be prime source of energy in coming years.

Solar has 2-3 defining edge over Wind. First, the site selection is easy and simple, second, there are no moving parts which makes O&M much simpler. Solar is still legging in race due to higher capital cost. The cost of solar power has also come down to a level which was never thought or anticipated by any industry expert. A solar project which was costing Rs. 15-16 Cr / MW a couple of years ago is now available at half of price which little efficiently improvement as well.

Norms of implementation of scheduling are getting continuous focus of policy makers and regulators. Here also solar has a lead, as scheduling is relatively very easy as compared to wind.

India as a county has scope of both or even hybrid as well. But % growth is going to be much higher for solar without any doubt.

5.    What technology you as developer favour in solar crystalline or thin film.

This was most debated topic in last 1-2 years, since the development of solar project picked up in India. I have spent several years in renewable energy and I recall this as similar debate in wind sector, which was in prime focus 3-4 years ago. It was about comparing gear and gearless wind turbines. Actually both gear and gateless turbine coexisted and have performed well in India but the debate never ended. Even if at all there is slight difference in technology and output an investing company should pay more focus on factors which would have more commercial impact, like selection of O&M service provider, integration of plant etc.

I am sure in India both thin film and crystalline will coexist but the fate of project or supplier or investor will be decided by other important factors and not by the technology they use.

 

6.    Re-powering of wind farms. Are your company looking to tap this new segment?

Our most of the wind farms are new so it will not make any commercial sense to think of Re-powering at this point of time. But yes, for projects with 10+ years life there is good scope. I heard in Tamil Nadu first repowering project already started. There should be additional policy support for Repowering of projects. It is like supporting energy efficiency projects which taken up well by government. As such there is scarcity of class I and class II wind sites in India.

 

7.    Tell us about Ruchi Groups investment and plans in RE sector.

 Ruchi has about 85.2MW of operational wind projects in five different states, of which a capacity of 16.1MW is being used to meet energy requirements of major manufacturing plants of the Ruchi Group. Ruchi was the first company in India to get its wind project registered under the Clean Development Mechanism of United Nations Framework Convention on Climate Change. Ruchi also made investment in a 10 MW solar project.

Recently, Ruchi soya is ranked 10th (Globally) among Top 10 consumers of onsite Renewable Energy in Bloomberg’s Global CREX 2012 Report. Management of the company is committed towards renewable energy and would look in to similar opportunity in future as well.

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shivanshtyagi

Mechanical engineer with experience in Power Plant maintenance , operation and auditing for ISI marked products. MBA in Power Management from National Power Training Institute, Faridabad. Working as Consultant for Bridge to India Pvt. Ltd. Expertise in: 1) Power sector regulations 2) Financial Modelling 3) Project Development solar PV plants 4) Strategic consulting 5) Report writing

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10 Responses

  1. Pulkit says:

    Very insightfull and true. Sankalp has listed strenghts and shortcomings of power sector in this country very beautifully.

  2. Neha says:

    Straight from the gut. Good work. I agree with sankalp that solar has more potential than wind.

  3. Nitin says:

    I am also working in RE sector, I agree with Sankalp that the main problem is implementation of policy.

  4. Dear Sankalp,

    Your outlook statement & report is very favorable and sensible.

    With Regards.

    Thanks & Regards
    Imtiyaz Shaikh
    Land Legal Department
    Suzlon Gujarat Wind Park Ltd.
    +91-9977704959

  5. Ruchita says:

    very well answered.
    Infact the very reason of India being a global attraction for investment in RE is the policies on paper (as there is no doubt about the technical potential). However, the implementing systema nd overall chaos among the various stakeholders have made them not come on ground as inked.

  6. Dwijal-Mamtora says:

    As very well defined by Sankalp, policy framework is slow but not negative as we observe in developed nations. esp. the recent slashing of FIT tariffs in renewables.

    Indegenous entities who have realised the potential of renewable energy’s reasonable and stable rate of returns are likely to have an upper-hand (in their core businesses) rather than riding bulls and bears!

  7. Sankalp says:

    Thanks to all the apprecation.

  8. Dulce Wacht says:

    I am so grateful for your article post.Much thanks again. Much obliged.

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