With costs coming down, companies rushing to green energy

SunEdison is in talks to sell its Indian solar assets to Finland’s Fortum Group as liquidity problems globally crimp its balance sheets.

SunEdison is in talks to sell its Indian solar assets to Finland’s Fortum Group as liquidity problems globally crimp its balance sheets.

The Indian renewable energy space has suddenly become a hotspot for large companies and investors, who want to tap the country’s potential. (AFP Photo)

Canada’s solar company SkyPower is scouting for partners that can collaborate in its Indian plans, while homegrown Welspun Renewables has already initiated efforts to sell its plants, attracting a roster of marquee local and foreign players.

The Indian renewable energy space has suddenly become a hotspot for large companies and investors, who want to tap the country’s potential. Renewables is set overtake coal as the largest source of electricity by early 2030s, with renewable-based generation accounting for 25% of total power generation.

Renewable energy has long-term potential, said Soumya Kanti Ghosh, chief economic adviser, SBI Research. “A megawatt (MW) capex of solar power project, which was Rs 14- 15 crore five years ago, now stands at around Rs 6-7 crore. With the cost of production falling nearly 60%, the price of renewable energy is set to equal that of thermal power in next two to three years.”

According to Sumant Sinha, founder of ReNew Power, one of the country’s largest renewable energy producers, there is a lot of interest from foreign players, most of whom want to build a presence in India. “We are also looking at opportunities but we would look at all options.”

Suzlon group chairman Tulsi Tanti pointed at land and infrastructure as another challenge. “Tariff has gone under Rs 5 per unit, the sustainability of such low tariffs will have to be seen.”