Sembcorp eyes buying renewable assets to grow India portfolio

“We’ve constructed deeper capabilities that now we have exhibited via our undertaking executions which substantiate the declare that we generally is a higher proprietor of the belongings,” Tuli said.

Singapore-based Sembcorp Industries is eyeing the acquisition route to extend its renewable power base in India as the corporate goals to lift its inexperienced energy portfolio globally from the prevailing 3 gigawatt (GW) to 10 GW by 2025, Vipul Tuli, CEO South Asia of Sembcorp Industries, advised FE.

The corporate operates within the nation via Sembcorp Energy India (SEIL), which presently runs 4.8 GW of energy era belongings within the nation entailing an funding of about Rs 35,000 crore, comprising 2.6 GW of thermal crops and the remaining capability consisting of renewable power initiatives.

“Due to the capabilities and expertise in renewables now we have gathered, we now know that if we take over an asset we’re assured of producing extra electrical energy from the identical asset than the earlier proprietor,” Tuli mentioned.

With out specifying the precise renewables capability addition goal set for the nation, the CEO added that “we’re again on the expansion path, whether or not via acquisitions or bidding”. Nevertheless, Tuli specified that Sembcorp is not going to purchase initiatives the place tariffs have been found in auctions however energy buy agreements (PPAs) haven’t been signed.

A latest report collectively launched by Ficci and Ernst & Younger (EY) pointed that renewable power initiatives with round 20 GW of contracted capability from renewables auctions held in 2018, 2019 and the primary half of 2020 presently stay stranded with out PPAs. Sembcorp, in July 2020 had introduced the commissioning of the 800 MW of wind energy initiatives it had received auctions performed by the Photo voltaic Power Company of India (SECI) 2017 and 2018. The corporate had largely stayed away from auctions in 2019 and a big half in 2020.

“We’ve constructed deeper capabilities that now we have exhibited via our undertaking executions which substantiate the declare that we generally is a higher proprietor of the belongings,” Tuli said.

The common tariff found for the aforementioned stranded 20 GW initiatives are 12% larger than these for which PPAs are executed, the Ficci-EY report famous. State-run discoms developed chilly toes on shopping for energy at explicit tariffs found beneath auctions after a lot decrease costs found beneath subsequent rounds of bidding. The present lowest photo voltaic tariff is Rs 1.99/unit.

“Initiatives which found bids of round Rs 2.70 to Rs 2.90/unit have been trying to be costly, however with the rise in photo voltaic module costs and upcoming primary customs obligation tariffs are set to rise and these initiatives will begin to come throughout as low-cost,” Tuli said.