Tata Power seeks Rs 21,000 crore wind turbine bids for 3 GW green push
This initiative is expected to unfold over the next three to five years and could involve contracts worth more than Rs 21,000 crore. The procurement drive is also positioned as one of the largest wind turbine orders in the industry.
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Largest renewable energy contracts in the making
The bidding process will likely be split into multiple contracts, with the potential for the overall requirement to grow to 5 GW over five years. This could push the total value of the contracts to a staggering Rs 35,000 crore. Tata Power is reportedly prepared to invest close to $9 billion over the next six years to expand its renewable energy capacity, positioning itself as a frontrunner in India’s energy transition.
A key industry official noted, “Tata Power is targeting the development of over 1 GW of wind capacity annually, and they are seeking long-term supply agreements for wind turbines.” The installations are expected to support the renewable energy needs of Tata Power’s group companies, including Tata Steel.
In the current financial year, Tata Power plans to allocate Rs 20,000 crore for capital expenditure, with half of this investment focused on renewable energy projects. The remainder will be directed towards infrastructure for distribution, transmission, and coal-based plants.
Journey to 100 per cent clean energy by FY45
As part of the salt-to-software Tata Group, Tata Power has committed to achieving 100 per cent clean power generation by FY45. The company currently boasts a renewable energy capacity of 10.5 GW, with 5.7 GW in various stages of development and an operational capacity of 4.8 GW, comprising 3.8 GW of solar and 1 GW of wind energy. By 2030, Tata Power aims to more than double its capacity to 20 GW.
A notable project under development is a 966 MW solar-wind hybrid facility designed to deliver uninterrupted renewable power to Tata Steel. Additionally, Tata Power has partnered with state-owned SJVN Ltd to establish a 1.3 GW dispatchable renewable energy project, a key initiative outlined in its FY24 annual report.
Although Tata Power continues to operate more than 8.8 GW of thermal power generation, it has decided not to expand its portfolio in this segment. The company’s long-term strategy is squarely focused on clean energy, with a target to double its profit after tax by FY27 compared to FY23 levels.
Government focus on wind power addition
India’s renewable energy landscape is shifting, with the government aiming to boost wind power capacity to 25 GW by 2028. Between 2020 and mid-2024, the country added 9 GW of new wind energy capacity.
While solar energy continues to dominate capacity additions, the government is renewing its focus on wind energy, encouraging companies like Tata Power to invest in large-scale projects. A recent report by Fitch Ratings, released on October 3, highlighted a surge in renewable energy project auctions, with about 70 GW auctioned in FY24, compared to just 20 GW in FY23. Solar projects accounted for 48 per cent of the auctioned capacity, while wind made up 9 per cent, and wind-solar hybrid projects represented 20 per cent.
Fitch’s analysis suggests that the robust auction pipeline, combined with a favourable economic environment, stable interest rates, and falling equipment costs, will support further capacity additions in the coming years. Tata Power’s move to bid for 3 GW of wind turbines comes at a time when standalone wind project tenders have seen tepid demand over the last three to four years, making this development a significant boost for the sector.
First Published: Oct 09 2024 | 11:22 AM IST