Tata Power to double renewable investment to ₹12,000 crore

Tata Power Company Ltd (TPCL) plans to invest about  ₹12,000 crore, which is double the capital expenditure in FY23, in the renewable power segment. The investment will be largely for the upcoming 4 GW (gigawatt) solar cell and module manufacturing plant in Tirunelveli District of Tamil Nadu.

A portion of the fund will be used for the under-construction renewable projects, transmission and distribution businesses in Odisha, Delhi and Mumbai and new opportunities, said N Chandrasekaran, chairman of Tata Group at the annual general meeting of TPCL. The company plans to fund these projects largely from internal accruals and cash on books.

In July last year, TPCL signed a memorandum of understanding (MoU) with the Tamil Nadu government to invest approximately  ₹3,000 crore for building a 4GW solar cell and 4GW solar module manufacturing plant. The module line is expected to be completed by October 2023 and the cell line by the end of the year, said Chandrasekaran. It will create over 2000 employment opportunities with the majority of them being women employees.

"India's total installed generation capacity reached 416 GW by the end of FY23, with the growth being driven primarily by the renewables segment. In the coming years, renewables will continue to be the key focus with a target of achieving 500 GW of non-fossil installed capacity in 2030," he told shareholders. In 2022, the renewables sector saw an investment of $500 billion, out of the $1.11 trillion in low-carbon energy investments made globally.

TPCL's installed power generation capacity across the categories has increased to around 14.1 GW. It added around 500 megawatt (MW) of renewable power generation capacity, taking the total operational renewable capacity to around 3.9 GW. With the completion of under-construction projects of around 2.7 GW, the clean and green source-based capacity will be close to 50% of its total installed capacity, said Chandrasekaran.

Earlier, in an interview with Fortune India, Chandrasekaran said, "TPCL will produce significantly more renewable power than thermal by 2030." The company has stopped new investments in thermal power projects.

It plans to carbon net zero by 2045. It will become 100% water neutral by 2030. There will not be any net impact on biodiversity before 2030. Zero waste to landfill is another target before 2030.

The power producer is in the process of building customer-centric businesses also. In the solar rooftop business, the company has built an extensive channel network of 450 dealers across 275 districts, providing a significant advantage, said Chandrasekaran.

"During the last quarter of FY23, solar rooftop, along with the captive solar EPC projects, crossed  ₹1,000 crore in revenue, doubling from the previous year. For the full year, the company delivered revenue of ₹2,770 crore growing at 83% year on year. The business has a healthy closing order book of  ₹1,100 crore as of March 2023, in the solar rooftop segment," he added.

In the EV charging market, TPCL is the leader with a presence in more than 550 cities/towns across 127,000 registered users, claimed the chairman. It has cumulatively installed about 4,000 public and captive chargers and sold close to 40,000 home chargers. The company plans to rapidly expand its network by targeting highways, fuel pumps and high-traffic city locations through strategic partnerships and by leveraging its cloud-based technology platform, he said.

The distribution business serves more than 12 million customers, making your company the largest private power distribution utility in the country. Odisha discoms, where all 4 distribution companies reported 10% reduction in aggregate technical and commercial (AT&C) losses, delivered a PAT of ₹253 crore. The company wants to further reduce the losses.

In third-party utility scale EPC business, it executed orders of 1.3GW capacity and won around 2.7GW of new orders resulting in a large and diversified EPC order book of around 4GW, worth  ₹17,470 crore, as of March 2023.

TPCL's consolidated revenue grew 32% to ₹56,033 crore in FY23 and the PAT increased by 77% to ₹3,810 crore.