Committed to long term investment in India: Sembcorp Industries' Nithyanand

India offers some of the most renewables-friendly policies in the world, which ably supports the massive energy transition that the country is undergoing, Nithyanand added

Singapore headquartered Sembcorp Industries is the largest foreign renewable energy (RE) player in India with 5 gigawatt (Gw) of operational solar and wind power capacity. It started out by acquiring several key RE assets in India and went on to participate in government tenders. The company is widening its ambit to hybrid RE and green ammonia production. In an interaction with Shreya Jai in New Delhi, A Nithyanand, chief executive officer (CEO), renewables business (India), Sembcorp Industries, shares the company’s plans in India. Edited excerpts:

 

Sembcorp has been one of the few global independent power producers (IPPs) which stayed the longest in India. What has been your strategy so far?

We have been a key player in India’s energy sector since 2008. We have a global renewables portfolio of 14.4 Gw and India plays a central role in our growth strategy. We have built up our renewables portfolio of wind and solar in India to nearly 5 Gw across 13 states with customers in 18 states. We are firm in our commitment to India as a long-term investor.

 

How does Sembcorp plan to leverage on the renewable opportunities in India?

India offers some of the most renewables-friendly policies in the world, which ably supports the massive energy transition that the country is undergoing. Our strategy is anchored on sustainable growth through three areas: pursuing greenfield bids to develop new projects, selectively acquiring existing renewable assets and optimising their performance, and establishing long-term partnerships with select commercial and industrial (C&I) customers through private power purchase agreements. We have successfully completed the acquisition and integrated the renewables assets of Vector Green and Leap Green into our portfolio. Over two-thirds of our operational RE portfolio in India is managed in-house, enabling cost saving and higher utilisation of our assets. We continue to explore opportunities in hybrid power and innovative low-carbon solutions.

 

What are the focus areas, going forward, plain vanilla RE, hybrid or green fuels?

The rising demand for round-the-clock power is intensifying interest in hybrid and storage projects. With our experience in operating one of Asia’s largest battery storage systems in Singapore, we are ready to deliver a comprehensive suite of decarbonisation solutions for India’s energy future. We will also leverage our presence in India for low-carbon solutions such as green hydrogen and its derivatives. We recently signed heads of terms with Sojitz Corporation and Kyushu Electric for green ammonia production in India for export to Japan, with NYK as a shipping partner.

 

Are you still in the market buying assets or will you focus more on participating in government tenders?

Our acquisition strategy remains focused on identifying and securing renewable assets that are complementary to our portfolio. At the same time, we are strengthening our development pipeline by participating in disciplined bidding for greenfield projects. In 2024, we have secured more than 1 Gw of greenfield hybrid projects in India so far. We will continue to pursue targeted, strategic acquisitions of high-quality renewable assets as well as push forward in bidding for greenfield projects.

What are your targets in the Indian market?

As a group, we aim to reach 25 Gw of gross installed capacity globally by 2028, with India playing a major role. We find the central renewable bids conducted by SECI, NTPC, NHPC and SJVN of interest. At the same time, we are actively evaluating opportunities in state bids. In addition to greenfield bids, the C&I sector is a significant opportunity, driven by increased sustainability efforts and regulatory support. While we have been one of the earlier movers in C&I, we have been selective in building these partnerships.

What are some of the risks you face in the Indian market?

Land acquisition, particularly for wind projects, remains complex, which requires states to streamline the process of land acquisition as well as obtaining clearance for private land. Land banks can be designated in the state to facilitate renewable energy projects, supporting a plug-and-play model. Similarly, state support is also crucial in resolving issues related to right of way at project sites. Expanding grid availability and substation capacity is crucial to supporting project connectivity, especially in solar-rich regions like Rajasthan, Gujarat, and Karnataka. While the Late Payment Surcharge Rules, 2022, have significantly enhanced the financial viability of the sector, the rigour of implementation seen over the last two years needs to be maintained. Investment in smart grid technologies and infrastructure is essential for maintaining grid stability. Building a domestic supply chain, securing financing, and fostering global partnerships are vital for overcoming these challenges and positioning India as a leader in global energy transition.