The story of Avaada Power began in 2016 when Welspun Renewable Energy, co-founded by Vineet Mittal and B.K. Goenka, sold its renewable energy portfolio of 1,140 MW to Tata Power Renewable Energy Limited for about Rs 92.5 billion. A part of the sale proceeds were used by the two founders to start a new venture, Avaada Power. Welspun’s engineering, procurement and construction business was also demerged and transferred to a subsidiary of Avaada.
Avaada is committed to generating clean and sustainable energy, and intends to build and operate large solar and wind power projects across the world. It has a solar power project portfolio aggregating about 1 GW across 10 states in India. It also has a project pipeline of 5 GW in various African and Asian countries.
In February 2018, Avaada announced its decision to invest Rs 35 billion in setting up 500 MW of solar projects in Andhra Pradesh. It also committed to invest Rs 100 billion in Uttar Pradesh for developing 1,600 MW of solar projects.
In September 2018, Giriraj Renewables (a special purpose vehicle of Avaada) quoted a tariff of Rs 2.44 per unit to set up 300 MW of solar projects under the 500 MW solar tender floated by Gujarat Urja Vikas Nigam Limited. In October 2018, Giriraj Renewables bid for 300 MW of capacity but won only 50 MW at Rs 3.23 per unit in the Uttar Pradesh New and Renewable Energy Development Agency’s (UPNEDA) 500 MW tender. In the same month, Karnataka Renewable Energy Development Limited awarded 150 MW (3×50 MW) of solar projects to be developed at the Pavagada Solar Park to Giriraj Renewables at a tariff of Rs 2.92 per kWh. (Earlier in March 2018, Giriraj Renewables had one the bids to develop 150 MW of solar projects there). The company is now setting up 300 MW of solar projects in the Pavagada Solar Park. The solar park, also known as Shakti Sthala, is a 2 GW complex being developed in Tumkur district, approximately 180 km from Bengaluru. It is expected to be the world’s biggest solar farm when complete.
Further, in November 2018, Avaada emerged as one of the final bidders in UPNEDA’s 550 MW solar tender. It had bid for 100 MW of capacity. The financial bidding took place in December 2018, and Avaada won the entire capacity at a tariff of Rs 3.07 per kWh. UPNEDA had fixed Rs 3.10 per kWh as the upper tariff ceiling for this tender, which helped evince the desired response from developers at a time when even the Solar Energy Corporation of India (SECI) was finding it tough to find participants for its tenders despite multiple postponements and amendments to the draft request for selection (RfS).
Going forward, the company plans to add 1,000-1,500 MW of capacity to its portfolio every year. It plans to invest Rs 250 billion in the renewable energy sector to develop solar and wind projects aggregating 5,000 MW by 2022. To this end, the company is looking to expand its operations in South Asia and Africa. Domestically, it expects floating solar to contribute a significant share of its portfolio. “Given that India has a large number of reservoirs, floating solar projects present a significant opportunity for clean energy generation,” notes Vineet Mittal, chairman, Avaada Group.
Avaada’s incorporation after the sale of Welspun’s assets to Tata Power Renewable Energy Limited exemplifies the gains that can be achieved through a calibrated business and risk strategy. These learnings will continue to be the basis of the company’s future growth.
Sharing his outlook about the renewable energy sector, Mittal says, “The clean energy business is in a constant state of innovation, especially given its wide applicability and usage. With the government committed to environmental sustainability and meeting its clean energy targets, these are exciting times for the adoption and implementation of clean energy innovations. Floating solar projects and electric vehicles have already made their way into the market. It will be interesting to see how these segments evolve.”
With a strong promoter backing and sound industry experience, Avaada seems well positioned to ride the renewable wave in the country. The challenges it faces are common to developers across the industry and will be resolved as the sector evolves. In sum, Avaada is a serious player in the making.