According to reports, post the appraisal in renewal energy target, Ujaas Energy expects its business to improve as Renewable Purchase Obligations are on the rise. The target comprises 40 GW rooftop and 60 GW large-and-medium scale sloar power grid projects.
Speaking to CNBC-TV18, Anurag Mundra, Joint Managing Director and CFO, Ujaas Energy says that rooftop projects target can be achieved by strengthening distribution network over the 200 million Indian households. Mundra is of the view that global financial institutions will come forward for funding purposes. Below is the transcript of Anurag Mundra’s interview with Reema Tendulkar and Mangalam Maloo on CNBC-TV18.
Reema: The government is clearly laying a lot of thrust on renewable energy particularly solar energy, has things improved on the ground already?
A: Yes, the things are improving but on a bit slower pace on the ground. You must be aware this demand of renewable energy is coming because of the renewable purchase obligation and in the first quarter of current year, two very important orders one of Appelate Tribunal (ApTel) and one of Supreme Court have given lot of impetus to this sector.
Mangalam: Also wanted to know that the government has led a thrust of about 100 gigawatts going forward by 2020 of which 60 percent will come from solar parks and 40 percent will come from rooftops. How do you think will that be managed, how will that go forward?
A: 40 gigawatts are going to come from rooftop projects. India has almost 200 million households and at the same time we have extensive distribution network. If we can strengthen our distribution network, with this 200 million household, we can achieve the target of this 40 gigawatt. Till now what was happening is that many utility companies were considering rooftop solar project as their competition but now with the net metering policy, they are realising that rooftop solar power project is able to strengthen the network itself. Gujarat is the leader in solar sector in our country, if you read their very recent discussion paper on new policy, they have taken a cognizance of this fact that the solar rooftop add to the strength of distribution network.
Reema: There are a lot of challenges with regard to rooftops, one of them includes the receipts of government subsidy, that has been an issue we understand from the industry that one year delay is practically normal, what is your response to the subsidies which are pending from the rooftop?
A: Yes, that is right that subsidy was a problem for this industry and there were substantial delay from the release of subsidy. In fact there are many players in the industry who are asking to do away with the subsidy in this sector. If we do that, probably the sector would grow at much faster pace. I also understand the subsidy distribution has improved significantly on timelines.
Mangalam: The government’s target of 100 megawatts entails an investment of anywhere close to Rs 6 lakh crore while we understand that the public sector banks have given Rs 60,000 crore going forward, so where do you think the finance is coming from if this target was to be achieved?
A: This Rs 60,000 crore or the debt component of that project for next couple of years. When certain milestones can be achieved, the public sector banks will revise their targets and will increase furthermore. At the same time, many global financial institutions and funds are looking very aggressively towards India. I believe many foreign funds will come in India as soon as we show significant improvement in our renewable purchase obligations.
Reema: When you see the latest growth figures, it clearly appears that the electricity is a problem, electricity is under pressure and in that the reason seems to be that the off take of thermal — there is not much demand for thermal, anyway solar power is more expensive than thermal power as well. So what is the kind of demand that you see?
A: As a nation we have around 10 percent of deficit in electricity and now solar is close to achieving grid parity, so the demand of thermal energy has a lot of problem availability of coal and it is a brown power which is damaging our environment. As a nation, we are taking a call that we need energy security in our hand and we do not want brown power in that significant quantum. The renewable purchase obligation (RPO), which is a driving factor to achieve 100 gigawatt by 2022 the government is proposing to have an RPO of 5 percent and renewable generation obligation (RGO) of 5.5 percent. When this comes in the picture, the demand of solar power is going to take a big leap in country. We want to achieve 100 gigawatt, so it is 33 times growth in next five-seven years.