Founded in 2022, Serentica Renewables supplies round-the-clock (RTC) renewable energy, enabling large-scale, energy-intensive companies to transition towards renewable energy. The company’s primary focus is on industrial decarbonisation in the commercial and industrial (C&I) sector. Serentica aims to provide reliable green energy through a combination of solar, wind, energy storage and balancing technologies. In an interview with Renewable Watch, Akshay Hiranandani, chief executive officer, Serentica Renewables, talks about the company’s progress, project pipeline for C&I clients in the Indian renewable energy space and his views on government initiatives, market challenges, and the company’s future plans. Edited excerpts…
What is the current project portfolio of Serentica Renewables? What have been the key recent developments in the company?
Serentica’s current business and contractual commitments require commissioning of about 4,000 MW of renewable assets. These contracts have a rough distribution of 60:40, with 60 per cent of solar power (2.5 GW) and 40 per cent of wind power (1.5 GW), with its customers. The projects will be spread across Rajasthan, Maharashtra, Karnataka, Madhya Pradesh and Andhra Pradesh. These projects have a high plant load factor (PLF) commitment, and we have signed certain service-level agreements that prioritise the quantum of units fed rather than the capacities deployed. Therefore, the focus will be on hybrid projects along with short- and long-duration storage solutions, as opposed to plain vanilla solar and wind projects. All these projects are large-scale ground-mounted projects, with a minimum installation of 150 MW each.
Which government policies have helped C&I players in expanding their business?
The Indian government has been proactive in encouraging open access, energy procurement and energy supply businesses. C&I players have benefited from the waiver of ISTS transmission charges. It was a big impetus for the sector as it opened the doors for some of the larger/bulk consumers that are eligible for connectivity to the central transmission utility (CTU). Also, the draft rules to delicense transmission line connecting the customer’s premises to the grid promises to be another significant positive development for the sector.
What kind of requirements do large customers have and what are the solutions provided to them?
Many of the big clients have processes that can get impacted by disruptions in electricity supply. For instance, a furnace that is operated 24 hours a day requires continuous and high quality power as a critical component for its operations. While each customer’s needs are tailored to their requirements, the general inclination of offtakers is towards RTC renewable energy.
Thus, whether the demand is for a short time block such as 15 minutes, or it is for an annual period, the C&I market is demanding customised RTC renewable energy solutions. Our current commitments at Serentica are on an annualised basis to ensure a high PLF to customers. Also, given our understanding of configurations and our tie-up for pumped hydro storage projects with Greenko, we are developing solutions catering to 15-minute block RTC renewable energy product requirements. We are building the projects under the captive scheme, enabling customers to invest the required equity in the plant to qualify as a captive customer and receive the regulatory benefits that come with it. Going forward, our projects may also be developed under the open access framework.
What are your strategies to tap the power markets?
Considering the challenges of achieving high PLF or providing renewable energy RTC in a small time frame, there is a set of five parameters that can help in figuring out a solution. These are the right amount of wind power, solar power, hydropower storage (long-term storage), battery energy storage (short-term storage) and power markets like the Indian Energy Exchange. Typically, the norm is to forecast short-term prices based on immediate past price data but adopt a more scientific approch to forecast prices beyond 5-7 years. In such a scenario, the key lies in leveraging the information and algorithms derived from past data on IEX and the power consumption by the customer. This will help us decide the amount of power to be purchased from the power markets to provide RTC renewable energy to customers. At Serentica, we are putting together the right algorithm, which will help us procure from power exchanges to reduce overall cost to customer.
What challenges are you facing in the C&I space? What role can the government play in addressing them?
Currently, Serentica is in the development and execution phase. We started executing our projects 8-10 months back. In this phase, the key challenge is regarding land as it is a critical input needed to put together a project. The government can ensure that the right amount of compensation goes to the landowners, aligning with the existing value in that area or the potential opportunity cost incurred due to relinquishing occupation of that land parcel. We have our own land challenges and we are dealing with them in a very creative way, involving a spectrum of solutions.
What are the future plans of Serentica?
Given the ongoing progress, we should be generating 9-10 billion units (BUs) of electricity. Over the next five years, we aim to quadruple the generation capacity and deliver 40 BUs of electricity. In terms of funds raised, we managed to close the first round of funding and raised funds worth $650 million from investment firm KKR for our platform.
The government’s proactive support has streamlined the transition for C&I customers to open access or captive mode. In this space, we are focusing on a holistic approach rather than a project-specific approach. We are establishing development infrastructure, which includes securing land and connectivity for project execution, as well as vendor tie-ups to grow the business. Thus, we are putting together building blocks that can help us become a serious and emerging participant in the C&I renewable energy space.