The Harsh Goenka-led Rs 15,000 crore RPG group is entering the renewable energy business, with its power transmission arm KEC set to bid for engineering, procurement and construction contracts to install solar plants and wind farms.
"We are in talks with a few developers and hope to launch our solar EPC business in April," said Ramesh Chandak, managing director and CEO, KEC.
With India poised to add at least 2 GW capacity every year in solar power alone, the size of the renewable EPC business is estimated to be Rs 14,000 crore per annum, prompting almost a dozen players including major business houses such as Tata, Mahindra, Larsen & Toubro, Welspun and Moser Baer to foray into this sunrise sector. Currently, L&T is the sector leader with a strong presence in wind and solar power.
KEC last week received a 2A rating from ICRA for its performance capability and financial strength to execute solar EPC projects. With this certification, a major prerequisite, KEC hopes to get the ministry of renewable energy's approval to bid for contracts to install solar plants this month itself.
"With solar power tariffs drastically down, it now makes a strong business case. The gap in tariff between solar and conventional power will be marginal in two years. This will hopefully attract large scale investment in solar energy," Chandak said.
With photo voltaic panels getting cheaper, construction cost to set up a 1 megawatt solar power plant has come down from Rs 10 crore to Rs 7 crore. "We want to be one of the top three players in this business domestically and will expand it overseas," he said.
KEC has strong international presence as half its revenues come from overseas operations.