Pune-based maker of wind turbines and end-to-end EPC player , Suzlon Group, announced its entry into the solar power space. Led by Tulsi Tanti, Suzlon will diversify outside the wind energy space where it is one the leading players globally.
Suzlon won a contract from the Southern Power Distribution Company of Telangana Ltd (TSSPDCL), through a competitive bidding process, to develop 210 MW of solar power in the state. This 210 MW of project consists of six different units – one of 100 MW, one of 50 MW and four units of 15 MW each – located across state of Telangana. The company will be signing six different power purchase agreements (PPA) this month with the state utilities for a period of 25 years each. TSSPDCL had invited bids for these solar power projects in April 2015.
The company did not disclose the investment that Suzlon would be making to develop the solar power project. But as a rule of thumb, an investment of Rs 6 crore is required to develop one megawatt of solar power. By this calculation, Suzlon may have to shell out around Rs 1,260 crore to develop 210 MW of power.
Suzlon’s spokesman said that the tariff at which the company intend to sell power to the Telangana state utility from the six solar power units will range from Rs 5.49 to Rs 5.59 per kWh. And, according to solar industry experts, a of Rs 5 per kilowatt hour (kWh) is a commercially viable option for solar power in India.
“This 210 MW-project will reinforce our commitment to execute tangible capacities in solar energy every year while expanding our footprint,” said Rohit Modi, CEO (international operation and new business), Suzlon. “Suzlon will develop these projects on a turnkey basis.”
In a statement, the Suzlon Group’s chairman Tulsi Tanti said that solar and wind energy is complementary and Suzlon would leverage its project execution capabilities and end-to-end solutions to deliver solar power projects, wind power projects or hybrid wind-solar projects. “We are also working on integrated renewable energy solutions by combining wind and solar projects at a single location”, he added.
The current government, under the leadership of Prime Minister Narendra Modi, has been bullish on the prospects of developing renewable power in the country and has set a target of developing 60 GW (gigawatt) of wind power and 100 GW of solar power by 2022.
Suzlon has been struggling with losses since the financial year of 2009 and only posted its first quarterly operating profit in three years in the first quarter of the current fiscal. Due to a combination of domestic and international headwinds in the wind energy space and the overall economy, Suzlon found itself laden with significant debt and mounting losses.
However, a round of debt restructuring, sale of the company’s crown jewels like Senvion, a German wind turbine maker, in 2014, and the entry of Sun Pharmaceutical Industries managing director Dilip Shanghvi as a white knight investor are helping Suzlon regain its feet.