ReNew Power to bet on Solar PLI scheme, plans manufacturing foray

Firm is among top-5 renewable energy players in India with a solar and wind power portfolio of 9.8 Gw of commissioned and under construction capacity

Gurgaon-based Goldman Sachs-backed ReNew Power is planning to participate in the production linked incentive (PLI) scheme for solar manufacturing, thereby expanding its portfolio from generation and transmission to manufacturing as well. ReNew is one of the top five renewable energy companies in India with a solar and wind power portfolio of 9.8 Gw of commissioned and under construction capacity.

Speaking with Business Standard, Sumant Sinha, chairman and managing director, ReNew Power, said India’s plan to encourage local manufacturing through imposition of import duties and schemes such as PLI, was a good move.

“We certainly are interested because we believe that it is important for us as market leaders to play a role in adhering to the government’s plans and also providing ourselves with back-end supply and backward diversification. So, for that reason we are looking to set up manufacturing capacity and we would like to apply for the PLI,” Sinha said.

ReNew has announced its entry into solar manufacturing, power transmission and power distribution. It recently participated in a tender for privatisation of power distribution in Dadar & Nagar Haveli, Daman & Diu. The company also plans to expand in energy storage and hydrid power projects.

Sinha further said the Indian government's aim to reduce dependence on one country (China) with which it has geo-strategic issues was correct. “It would lead to some degree of disruption till the time adequate domestic capacity is built. But India is going to be a big enough market that we can afford to set up competing manufacturing destinations. Almost 70-80 per cent of the world's solar cells and modules are manufactured in China, which in some way is an unhealthy dependence on one country,” he said.

The union government announced a Rs 4,500 crore PLI scheme for manufacturing of solar cells and modules in India, in November last year. Ireda has invited bids for the scheme. The scheme aims to add 10 Gw of solar manufacturing capacity in the country.

Apart from Goldman Sachs, ReNew is backed by equity investors such as Tokyo based JERA, Abu Dhabi Investment Authority, Canada Pension Plan Investment Board, and Global Environment Fund. The company is in the process to list on NASDAQ through the SPAC route, aiming for a valuation of $8 billion. This is the first ever De-SPAC transaction globally involving a renewable power generating company and first involving an India based target since 2016.

Sinha, who was recently recognised as the SDG Pioneer by the United Nations Global Compact, said several countries across the globe were moving towards clean energy and India should take a leadership role. “India is well on its way to meet its INDC (Intended Nationally Determined Contribution)  targets. India has the opportunity to take leadership in this sector which will be a multi-trillion industry. More concerted and stronger actions are needed from the government in certain areas,” he said, adding that whether net zero or not, India should declare a carbon emission reduction trajectory.

Sinha said the Indian energy market would see a significant growth in the decades to come and this would open doors to global investment. “Renewables are taking over the power sector and all future capacity additions will be renewables. Global capital markets, financiers, domestic companies, are all recognising that growth outlook. We are seeing them come to India – both through equity and debt. We need all that capital to set up that mega capacity,” he said.