SME Times News Bureau | 15 Sep, 2018
The future of the world is green energy
and renewable energy, said Rajeev Karthikeyan, Founder and Managing Directorâ
Leap Green Energy, in an exclusive interview with SME Times.
Excerpts of the interview...
tell our readers about Leap Green Energy and its entrepreneurial journey.
Rajeev Karthikeyan: Leap Green Energy, established in 2010 is a
fast growing, Independent Power Producer (IPP) dedicated to generating energy
using renewable Resources. Leap green energyâs assets are spread across six
states in India and its customers are well diversified between various Indian
State Utilities and the private sector. Leap green energy uses advanced AI
enabled platforms to monitor assets Real time and is a Pioneer in the wind
forecasting initiatives in the country. Leap green assists State Utilities and
Industry associations to fully utilize and harness renewable energy with high
prediction accuracy. Leap green is also the market leader in the private sector
and has a well-diversified customer base of over 200 corporates spread across
completely different sectors ranging from Hospitality, IT parks to textile
factories. Currently we own an operational capacity of 751MW and 400MW under
construction which makes 1.2GW of wind assets and is determined to expand to
beyond 5GW by the year 2023. Leap green is heavily investing into setting up
wind mass in all the major wind passes in India and thus is building to create
a pipeline excess of 6 GW going forward.
are the products/services do you offer?
Rajeev Karthikeyan: Our portfolio of interests includes Wind,
Wind/Solar Hybrid, Repowering, Energy Storage and Offshore wind at various
stages of development.
tell us about the current situation and prospects of the wind turbine energy
sector in India?
Rajeev Karthikeyan: India has
been rapidly adding power generation capacities to fuel the growing needs of
the masses and the industries. Today,
India is the third largest producer and fourth largest consumer of electricity
in the world. As per Ministry of New and Renewable Power (MNRE), total
Grid-Interactive Renewable Power Capacity in India as on March 31, 2017 is
58,581 MW, majorly comprising of 32,280 MW of wind power capacity. CRISIL
estimates that the wind power capacity additions of ~17 GW over the next five
years (2018-22) with an investment of Rs. 1,360 billion as compared to 15 GW
over the last five years (2013-17). Capacity additions in FY 2018 will be
driven by rising participation of central government (SECI) and other
relatively stronger off takers like PTC, which significantly reduces risk as
compared to direct exposure to state discoms. Moreover, wind power capacity
additions will be driven by decline in tariffs and higher procurement from
non-windy states. The key driving factors for wind energy sector in India are
1. Improved technology: Capacity additions in wind
energy would be supported by the fact that newer wind turbines have higher
rated capacity and higher hub height (over 140 m), which can be set up even at
low wind sites, which are otherwise considered economically unattractive.
Technological advancements have allowed players to set up wind mills in states
/ sites with lower wind density. Newer technology turbines increase annual PLF
by up to 3 percentage points. Based on our estimates for every 100 bps change
in PLFs, equity IRRs improves by 130-150 bps.
2. Large scale allocations under the central level
competitive bidding: Post the 1 GW of competitive bidding by SECI in February 2017, SECI
has released RFP for another round of 1 GW of wind allocations in May 2017 and has
further plans to bid out ~4 GW of capacity each year. The central sector PPAs
have lower counter party risks as compared to the discoms that delays payments
to the developers and have poor financial ratings.
3. Upward revision in RPO targets and stricter RPO
compliance by states: The discoms are expected to upward revise their Non-Solar
RPO targets and provide the long term trajectory based on the Ministry of Power
guidelines, which proposed states to ramp up their targets to 10.25% by FY
4. Lower wind tariffs to improve off-take of
power: With the onset of reverse auctions, the competitiveness of wind power
versus other fuel sources has increased. The bid prices for the recent reverse
auction are ~24% lower than the weighted average tariffs of coal-based plants,
discovered under Case I bidding in the recent past. For instance, under the
design, build, finance, own, and operate (DBFOO) model in fiscal 2016, state
discoms signed an agreement for 570 MW capacity with Thermal Powertech
Corporation India Ltd, for buying power at Rs. 4.15 per unit, which is ~17%
costlier than the recent wind tariffs.
5. Increased investments in augmenting the
transmission infrastructure: States such as Tamil Nadu, Rajasthan, Karnataka
and Andhra Pradesh are strengthening their evacuation infrastructure, to
support capacity additions over the long term.
We would also like to hear your expert comments on other
sectors like Solar, Biomass and Hydro Power.
Rajeev Karthikeyan: The future of the world is Green Energy, Sustainable
Development and Renewable Energy. We foresee, in a country like India with the
second highest number of Population, the need of energy is only likely to
increase with time. Every sector of energy is required and important to sustain
the need of the hour. August 2018 witnessed some important policy
announcements in the renewable energy sector by the MNRE. The sudden imposition
of 25 percent safeguard duty on solar imports and then the deference of the
levy temporarily has been the talk of the industry. These frequent changes in the
sectors are an endeavor to help ensure energy security, independence and
improvement in quality of life for the environment and the people.
Please tell our readers about the future plan of Leap
Rajeev Karthikeyan: Currently we own an operational capacity of 751MW and 400MW
under construction which makes 1.2GW of wind assets and is determined to expand
to beyond 5GW by the year 2023. Also, we are present in 4 states â Tamil Nadu,
Maharashtra, Rajasthan & Madhya Pradesh and we plan to expand by opportunistic
acquisitions and setting up green field projects. In addition to this, We have
been working with major global equipment suppliers like vestas, Gamesha,
enercon, and Suzlon since 2004 and continue to work with the leaders who
provide us with both turnkey projects and supply equipment for our own
epc. By 2022, we would have wind mass in all major wind passes in India
across all the 6 wind rich states and have strategic tie ups with all the major
independent developers, giving us an active pipeline of 6 GW going forward.