In a recent interview with Renewable Watch, Akshay Hiranandani, chief executive officer, Serentica Renewables, shared his views on the current state of the renewable energy sector, as well as the company’s achievements and key focus areas. Edited excerpts…
What have been the key hits and misses in the renewable energy segment in the past one year?
In 2023, India’s renewable energy sector experienced remarkable growth, marked by significant developments across various segments. India has witnessed huge installations in wind and solar capacity, which is commendable. For the first time ever globally, we are seeing developers building despatchable green energy solutions and offering them to discoms through Firm Despatchable Renewable Energy (FDRE) contracts by Solar Energy Corporation of India Limited (SECI) and to the large commercial and industrial (C&I) segment in the country. This is the result of the conducive policy environment created by the government.
Another positive development is the emergence of energy storage as a linchpin for grid stability, driven by government initiatives such as viability gap funding and reduction in prices. This is a crucial step towards ensuring a stable and reliable renewable energy supply. Furthermore, the green hydrogen segment is gaining momentum following approval of the National Green Hydrogen Mission, attracting investments in production and infrastructure, which positions India at the forefront of this emerging technology.
India is on the verge of a green energy revolution, with installations growing steadily each year. To maintain the momentum, policy certainty is crucial. For instance, relaxing the Approved List of Models and Manufacturers in solar for segments such as C&I can enhance investment. Overcoming such barriers is vital to support the government’s efforts towards the 500 GW vision. Despite some challenges, India remains a top investment destination for renewable energy, ranked sixth globally. Streamlining auction mechanisms and improving project execution capabilities are imperative to fully unlock India’s renewable energy potential.
What are the biggest challenges facing the renewable energy sector? How can these be resolved?
India is currently undergoing a remarkable transformation, characterised by a rapid shift from traditional to renewable fuels and a transition from an informal to a more formal economy. This transition holds immense promise for sustainable economic growth and environmental stewardship.
As a country, we have set a target of 50 GW of yearly renewable energy capacity additions. However, to ensure the evacuation of power from these projects, the expansion of transmission capacity at a similar pace has become critical.
There are certain pockets in renewable energy rich states where new grid connectivity may not be available before 2028, till the high voltage direct current system is put in place. This could delay the planned solar installation in the country. Therefore, it will be important for us as a country to invest massively in transmission and ensure timely availability of the grid.
With large capacities of wind and solar to be interconnected, the need for managing integration complexities, due to the intermittency of solar and wind expansion, will also necessitate investments in energy storage. Advancing storage technologies will require collaborative efforts to drive innovation and reduce costs.
Moreover, policy certainty surrounding domestic manufacturing requirements will be important to foster the industry growth and stability.
What is your outlook for the renewable energy sector in the near, medium and long terms?
In the near term, India’s renewable energy sector is poised for substantial growth. This is driven by the government’s ambitious targets of adding 50 GW of tender capacity annually until 2028, to achieve a total of 500 GW by 2030. This will need to be supported by a significant increase in investments, projected to surge by 83 per cent to $16.5 billion in 2024, requiring an additional Rs 300 billion between now and 2030. The emphasis on wind energy, with a target of 10 GW annual additions, further underscores the sector’s momentum. Additionally, various policy measures focusing on round-the-clock (RTC) power, firm and despatchable energy tenders, requiring energy storage, solar manufacturing and hydropower, are expected to provide further impetus. This will signal a favourable outlook for the near future.
Overall, we remain very bullish on this sector in the medium and long term. India has shown itself to be a global leader when it comes to not just setting ambitious targets but also executing its plans.
What have been key business highlights of Serentica Renewables in the past one year?
We built Serentica with the vision of providing truly despatchable green energy solutions to large C&I players. In less than two years since its inception, Serentica has swiftly emerged as a key player in India’s renewable energy landscape, focusing particularly on transitioning hard-to-abate industries to cleaner energy sources.
We have been fortunate to achieve key milestones in this short time. We have signed power delivery agreements, totalling over 1.85 GW with various industrial customers, positioning us to supply 9 billion units of green energy annually. Soon after, we secured a substantial investment of $650 million from KKR.
Recently, we also secured our first-ever dollar loan external commercial borrowing financing worth Rs 35 billion. This financing is for a 530 MW RTC renewable project, facilitated by a consortium of international and Indian banks. It signals confidence in Serentica’s projects and RTC business model.
The company’s ability to secure a significant debt raise of Rs 56 billion from industry majors, Power Finance Corporation Limited and REC Limited, further underscores the confidence in its vision and capabilities.
Serentica’s innovative approach extends to partnerships such as the one with Greenko Group, enabling access to its stand-alone energy storage capacity.
We have recently achieved success in two tenders by SECI and NTPC Limited. We secured a bid to supply 200 MW in NTPC’s FDRE-II auction. This was achieved by quoting a tariff of Rs 4.71 ($0.0677) per kWh for RTC renewable power.
How has been the experience of Serentica Renewables with RTC projects? What are the key operational challenges while developing such projects and how can these be resolved?
We employ a variety of strategies. It is important to recognise the diversity of resources at each location. For example, wind patterns in Maharashtra differ from those in Andhra Pradesh, not just in intensity but also in timing. Solar is largely concentrated in high insolation areas such as Rajasthan and Karnataka. Integration of both wind and solar energy sources across multiple locations is crucial, along with various forms of energy storage, including batteries.
A key challenge lies in the complexity of coordinating multiple energy sources and storage technologies to deliver seamless, continuous power supply. This requires sophisticated energy modelling and despatch systems to optimise the utilisation of renewable resources and storage capacity.
During the acquisition of new development areas, challenges with land acquisition may arise. Regions such as Rajasthan could potentially have quicker land acquisition processes compared to Karnataka and Maharashtra, where timelines may be longer due to competitive intensity and higher land prices prevalent in those areas or procedural lacunas.
One area that is experiencing delays is the supply chain for wind turbines, which is undergoing a new scaling-up cycle. However, this delay is partially offset by the entry of new original equipment manufacturers into the country, attracted by India’s growing renewable energy industry.
Another challenge is the deployment of suitable storage solutions, considering factors such as cost-effectiveness, reliability and scalability. While batteries remain the primary option for energy storage, we are also exploring alternative storage technologies to diversify our portfolio to enhance resilience.
How do you plan to expand your renewable energy project portfolio in the future and what are your long-term goals?
Serentica is committed to significantly expanding its renewable energy portfolio and aims to install 17 GW of capacity by 2030, focused particularly on the C&I sector, which accounts for over 50 per cent of India’s electricity consumption. To achieve this, we are tailoring solutions to meet the diverse energy needs of C&I customers, offering customised contracts and participating in government tenders, including those for RTC and firm power contracts.
Additionally, we are integrating energy storage into our projects, investing in energy trading capabilities, expanding our team to enhance expertise in energy modelling and data science, and strategically locating our offices to efficiently manage operations and project development. Through these efforts, we aim to drive sustainable growth, innovation and leadership in the renewable energy sector, while contributing significantly to India’s decarbonisation goals.
