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It requires no repetition that renewable energy is already a sizable business opportunity in India, and will be an even larger opportunity in future. I was hence curious to know how the Tatas, who already have a wide range of interests in the traditional power sector, were approaching the opportunities in this sector.

It’s obvious that the Tatas will be placing big bets in this segment, as they are already in the power sector with Tata Power.  Tata Power is India’s largest private sector power utility, with an installed generation capacity of over 2900 MW.

In renewable energy, the Tatas are already present in, or are exploring, practically every domain, including nascent sectors like wave and tidal energy. The three major areas of focus within this wide spectrum are solar, hydro and wind.

I present an overview of their efforts.

Solar

Tatas are already a significant player in the solar PV market with their group company Tata BP Solar, one of the most prominent Indian solar panel manufacturers. With an installed capacity of about 180 MW of solar panels, the aim is to increase this to 300 MW of panel manufacturing capacity in the near future.

The National Solar Mission will surely make the Tatas aim for even more in panel manufacturing.

The Mission, along with its incentives for solar power, will no doubt encourage them into becoming solar PV power plant developers. In a way, they have already started. For instance, Tata Power is exploring the possibility of setting up a 5 MW solar PV power plant in Gujarat. The company signed an with the Government of Gujarat to this purpose way back in Jan 2009. Expect a lot more news in this direction soon, with the government keen on increasing the installed capacity of solar PV from next-to-nothing right now to 20,000 MW by 2020. I would expect Tatas to garner a fair chunk of that number.

Tata BP Solar produces a range of end products using both solar PV and thermal. Their PV products include solar lanterns, home lighting systems, water pumping systems, streetlights & road flashers. Tata BP Solar’s thermal products include solar water heating systems, industrial water heating systems and solar heating for swimming pools

Hydro

Tata Power is currently having an installed capacity of about 450 MW for hydel electricity generation. It is however aiming for much higher numbers.

In Nov 2009, Tata Power entered into a JV with Norway’s renewable energy company S N Power to jointly set up hydel power projects in India and Nepal. Tata Power is expected to invest up to $3.2 billion over the next five to eight years as part of the joint venture. The companies are looking at developing capacities of 2,000 MW by 2015 and a total of 4,000 MW by 2020.

2000 MW is a fairly large quantity, representing over 1% of India’s total installed capacity. In my opinion, the Tatas will aspire for even larger goals, and don’t be surprised if they achieve much more than 4000 MW in hydel by 2020.

Wind Energy

Surprisingly, Tatas do not seem to have invested as much into wind energy, the renewable energy source that’s heads and shoulders ahead of the rest (apart from large hydro), in the Indian context. The company’s total wind installed capacity only measuring about 150 MW – relatively small compared with the total installed capacity in India of over 12000 MW. I guess it is only a matter of time before the company starts investing heavily in wind as well.

Others

Geothermal – Tata Power is also doing some background work on setting up a 5 MW geothermal power plant in Gujarat. Planning for this had begun in Jan 2009. 5 MW might seem like a very small amount, but in the Indian geothermal scenario it is not. The reason is simple – except for a small pilot plant running somewhere in Himachal Pradesh, there is no geothermal-based electricity being produced in India. Under such circs, aiming for 5 MW is not exactly a small idea. I however have a sneaking suspicion that this agreement is more on paper rather than any action on the ground, what with the uncertainties present in the Indian geothermal energy sector.

Tidal and Wave – From what we heard, Tata Power has started doing a preliminary evaluation of the tidal and wave energy industry potential in India. But I don’t expect them to make any major inroads in this field unless the technology matures and provides much higher efficiencies at lower capital and operating expenses.

Biomass Power – Tatas surprisingly seem to have invested very little in biomass-based power production. One reason could be the fact that biomass is used for small-scale power generation; there is hardly any power plant in the world that relies fully on biomass for utility-scale power.

Summary

Befitting their status as the largest private power utility in India, the Tata Group (through Tata Power) has been making rapid strides in the Indian renewable energy sector. By 2017, the company wants to produce 25 per cent of its electricity from renewable sources (which are carbon neutral) and to 35 per cent by 2030. Assuming the company has a total installed capacity of about 10000 MW by 2017, that would mean about 3000 MW of renewable power. I have a feeling that they will have much more than that.