ReNew Energy Global is evaluating an opportunity to enter into the wafer and ingot segment, after the government’s push to indigenise the domestic solar chain, CEO Sumant Sinha told Arunima Bharadwaj in an interview. Sinha believes that complete indigenisation of the whole solar value chain will take up to 5-6 years. The company also plans to enter the green fuel segment while expanding its backward integration in manufacturing. The imposition of US tariffs, Sinha says, has resulted in excess capacity of solar modules which poses challenges especially to the smaller players.
Excerpts:
Q: Renewable energy units’ ability to meet the peak power demand is only around 15-20% now, whereas the country’s electricity generation capacity is almost evenly balanced between green and thermal power. When do you think India will be in a position where 50% of the peak capacity will be met by non-fossil fuel power?
Daytime peak demand is met by RE at a much higher rate. We will start being able to transfer a lot of the daytime generation of solar into the grid and start meeting a lot of the evening peak demand too now with increased capacity. A lot depends on how quickly the batteries (storage) are put up. There are almost 60-70 GW that have been auctioned which means that almost 30-40 GW of extra demand can be met in the evening from solar.
Q: Over 40 GW of RE capacity is stuck, failing to secure a power purchase agreement. Where does the issue stem from?
In the last 2 years — FY24 and FY25–, the government auctioned almost 90 GW of new capacity. When we add to that the state governments as well, the total auctioned capacity came to 120-130 GWs.
The pace of auctions before that was 15-20 GW a year, and suddenly it went up to 50 GW in a year. Now all these projects are sitting with no buyer for the power. DISCOMs, which were going at about 20 GW a year (in signing contracts) , suddenly are being told to sign 50 GWs a year, and they don’t have the absorptive capacity to sign for such a large amount of capacity.
This is because all these bids happened rather quickly. There wasn’t sufficient transmission capacity either. Compared to the demand situation, the transmission infrastructure is not growing as fast as it should.
Q: When will we be in a position to have the domestic solar capacity for the entire value chain streamlined?
I think it’ll take around 5-6 years. It largely depends on government policy. We already have modules and cells that are mostly domestic. Wafers may be indigenised by 2030, and then polysilicon at some point after that. So in another 5-7 years, I think we’ll have a domestic value chain, but again, it all depends on the government.
Q: Does the company also plan to enter into the wafer and ingot segment, now with the ALMM (approved list of manufacturers) for all of these coming?
We’re looking into it very carefully. We haven’t made a final decision yet, but it’s been looked at very carefully.
Q: What would be your focus areas for growth and any investments going ahead?
Our core business is adding wind and solar capacity that is something that we’ll carry on. We’ll examine this further backward integration in manufacturing, and then we look at opportunities in the green fuel space.
Q: With US tariffs, there have been concerns over a supply glut in the Indian market. How do you see this impacting the industry?
We have not sold anything in the US so far, although we’ve looked at the market, but nothing really has materialised at this point. The whole tariff situation is very uncertain, so you can’t rely on it in any case in the US market. I don’t think most of the Indian suppliers were looking at the US market as a big alternative.
I would say that there is a lot of excess capacity that has come up on the module side in India. And it’s not helped by the fact that modules are relatively easy to put up and its low capital intensity, and there’s a lot of people who feel that they can go to the capital markets and raise money and then add some module line, and maybe a cell line. So a lot of people are doing that thinking it’s an easy business to get into. I think some of them are going to get disappointed because we already have overcapacity in the industry. Some of the smaller companies will face difficulty as a result of that.
Q: Is the company under discussions to sell any of its RE assets?
We’ve sold RE assets in the past. And that is something that we continuously tend to look at. So, there’s nothing specific that I can point out to you, but yes those are conversations that we tend to have on an ongoing basis.
Q: How do you plan to expand the capacity further?
Our current capacity is 11.5 GW. We have a lot of signed PPAs that we will be building over the next few years. We’ve had typically about 8-9% market share so far. We are currently in the process of actually expanding our cell line from 2.5 GWs to 6.5 GWs. We are bidding in green hydrogen tenders. And if we happen to win any of them, then, of course, we will go ahead.
Q: Do you think India’s 500 GW RE capacity target for 2030 is feasible?
I think so. There’s no reason for us not to be able to meet that target. Because, you know, apart from utility scale bidding, you also have rooftop, you have PM Kussum scheme etc.
Q: How does India balance the expectation of lowering energy costs to boost economic competitiveness with maintaining profitability in the renewable and green energy sectors?
It actually depends on the way our distribution sector is managed. We have 20-25% AT&C losses, and you have sectors that are not operating very efficiently. There is a lot of subsidisation that happens to the consumer. All of that is loaded on to the industrial sector.
in India, the government subsidises retail consumers and pushes the load on to the industrial consumers. In most of the countries it’s the other way around, with industrial consumers paying lower tariffs. This allows them to make big investments, become competitive, leading to more investments and job creation.
Q: Do you agree that investor and creditor interest in India’s thermal power sector has revived?
I think the government knows that we have to add 12-14 GW of new thermal capacity every year. You see, government entities like NTPC and of course, some private companies as well that are looking to add capacity. Most of the lending is coming from domestic entities.
Q What do you think should be India’s strategy in COP30?
I don’t know what India’s NDCs (nationally determined contributions)are going to look like, but we have to come out with the NDCs now pretty soon. India has set bigger internal targets than we have set external targets, I suspect that trend will probably continue. Along with every other country in the world, we should continue to push forward on the whole climate change issue.