ReNew Power, which is expanding across the energy sector supply chain, is aiming to achieve double-digit growth in power transmission. The company, which recently started participating in transmission project tenders, is hopeful of grabbing $20 billion worth of Central and state-level power transmission network projects.
Goldman Sachs-promoted ReNew Power started its ‘New Ventures’ division to explore business opportunities in energy storage, power transmission, floating solar, and wind-solar hybrid projects.
In August this year, ReNew Power bid for transmission projects worth Rs 1,500 crore. However, it didn’t win any. Company executives said jumping into transmission is a natural progression for ReNew, as it already has an extensive network of generation projects and it is cost-effective to build own transmission.
“ReNew Power will target a double-digit market share in power transmission in the coming 3-5 years. This translates into the company's participation in 40-50 per cent of the transmission projects offered,” Ajay Bhardwaj, President Transmission, ReNew Power told Business Standard.
He added that the company will look at both Centre and state transmission projects worth $2 billion, going forward. The projects ReNew participated in were part of the Green Energy Corridors (GEC) plan of the Centre. The latest tranche of projects offered were in the western states, which host most of the renewable energy projects. GEC is an alternative transmission system for renewable energy projects.
The first phase of GEC was constructed by state-owned Power Grid Corporation of Inda, and second phase is now being awarded through competitive bidding to private companies. Bhardwaj said the GEC concurs with the location of ReNew’s solar and wind projects and will help connect with the National Grid.
“We will look at all the states where we have existing projects or where we are building current capacity. These are the same states where the renewable capacity is and the Centre is planning Green Corridors,” he said. Karnataka, Tamil Nadu, Gujarat, Rajasthan are some of these states.
Regarding shifting the company’s focus to newer areas, Bhardwaj said the core business would remain renewable power generation. “Wind and solar will remain the mainstay for the company. We are a technology-driven company and we adopt new opportunities that come in this space,” he said.
Bhardwaj heads the transmission business which has a dozen executives currently. ReNew will be using in-house expertise for now and will source technology locally.
Power transmission projects till recently were awarded at the national level, connecting two or more regions. However, with saturation in the national grid and rising power demand at the state-level, the government is shifting focus towards system strengthening inside states. The other focus is connecting renewable-rich regions, as India plans to install 175 Gw of solar and wind projects by 2022.
Bhardwaj said the transmission sector needs to grow significantly, both as an enabler for generation and for load growth. The Centre is also planning to tag power transmission with renewable energy projects as projects of ‘National Importance’. This will reduce the levels of approval and the cost of the project will be shared by all beneficiary states.
The Centre has also identified 66.5 Gw of transmission projects that are to be built in two phases. In January, the Empowered Committee on Transmission approved 20 projects with an estimated cost of Rs 16,000 crore for bidding during the year. Most of these would provide a connection to renewable zones, generating solar and wind energy.
In an estimate made by PGCIL, the power transmission sector would see a massive investment of Rs 2.6 trillion by 2022, with close to 106,000 km of transmission lines and 292,000 MVA of transformational capacity (capacity of substations).