Hero Group on Wednesday announced its foray into renewable power generation, with a target to build 1,000 MW capacity with an investment of over R6,000 crore by 2016-17. The renewable business will see the company invest in greenfield and brownfield opportunities in wind, solar and small hydro projects.
The group, which already has significant presence in manufacturing and services sectors like automobile (two-wheeler), IT and financial services, education and training besides real estate, will undertake the new business through its newly-launched subsidiary, Hero Future Energies.
The company will get its funding from the parent for next three to four years before becoming a self-sufficient entity.
Rahul Munjal, managing director, Hero Future Energies, said: “We are making a strategic move into the renewable energy sector in the wake of the significant power shortages being witnessed in the country.”
“We will operate across various verticals of renewable energy that is, wind, solar and small hydro — of which wind and solar are the initial focus areas,” he added.
The company has already commissioned a 37.5 MW pilot wind power project in Rajasthan, which is expected to supply electricity to 70,000 households in the state.
“In the current year 2013-14, we have targeted to develop 100 MW of generation capacity based on wind and solar. Besides, we will also build a1 MW roof-top plant this year,” Munjal told a press conference. The total investment targeted in 2013-14 is close to R750 crore.
While the company wants to build its own power plants in wind and solar segments as part of capacity addition strategy, it will pursue acquisition route to grow its portfolio of small hydropower plants.
“Earlier, renewable power generation would make green sense. But now it also makes economic sense,” Munjal said, citing the significant drop in solar power generation costs in recent years.
Due to a fall in global solar equipment prices, the cost of setting up photovoltaic plants has now come down to R7.5 a unit, from R12 a unit in 2010.
The group’s auto segment is also looking to make its space in the four-wheeler market with it’s four-wheeled vehicle RE60, which