Sumant Sinha, chairman and chief executive officer of Nasdaq-listed ReNew, one of India’s biggest renewable power companies with close to 11 gigawatts (Gw) of commissioned capacity, speaks to S Dinakar in New Delhi about his company, green hydrogen, what is in store in the Trump era, and module prices.
Edited excerpts:
Can you update us on ReNew’s operations?
We have installations of about 6GW in solar and 5GW in wind energy, and a pipeline of 15 GW. Power purchase agreements for about 8.5 GW have been inked and the balance will be signed next financial year. This 26 GW is something we have to commission progressively over the next few years. We have a module manufacturing capacity of 6.5 GW in Jaipur and Dholera, and a 2.5GW cell-manufacturing line in Dholera. Last year, we added 2,000 MW of new capacity. This year we may add something similar or a little more. A capacity of 2,500 MW takes approximately INR 16,000 crore of capex every year. One MW of wind power takes about INR 9 crore, and one MW of solar is about INR 3.5 crore. We keep raising money because we fund 70-75 per cent of our projects through debt. On equity, a lot of it is internal accrual.
Will Donald Trump’s presidency of the United States (US) affect India’s renewable plans?
On the Indian market there will be a negligible impact because we don’t import equipment from the US. There is no linkage as far as the Indian power generating business is concerned. As regards the US market is concerned, as a market for Indian exporters, I think that Trump is making renewables harder in the US by removing the Inflation Reduction Act. I think the bigger impact in the US will be on wind. On solar, he’s been quieter. But if he cancels some of the tax-credit schemes, that will make solar a bit harder to install. My suspicion is that the market size, therefore, for solar may be affected to some extent.
What about exports to the US?
That is a function of what he (Trump) does to Chinese imports. Right now, ReNew is not exporting, but if there were exports to the US, we'd all benefit. And it’s also unclear as to what is going to happen to Chinese exports of solar modules. He has not made his policy visa-vis China clear.
Will the uncertainty affect investment?
Not at all. As I said, we don’t get anything from the US. Private investors will continue to invest in India. They are driven by Indian policies, Indian returns, Indian execution problems and issues and opportunities.
What are your plans for green hydrogen? Weren’t you planning a mega project in Egypt?
Green hydrogen is taking off a little slower than we would like because global demand is not shaping up as expected. But we have done some project development and whenever that demand shows up we will move forward.
Many big companies globally are cutting green-hydrogen targets. Will India be an exception?
The global off-take has been slow. We had based ourselves on global targets set by various governments. Japan and South Korea are moving, not to green hydrogen or green ammonia, but to blue ammonia because that, maybe, reduces carbon emission by 30-40 per cent and brings the price up only by a small amount. Green hydrogen will bring carbon emission down much lower, but the cost is higher. So people are saying it’s too high a cost to pay, sold rather go to the intermediate step first. That’s what Japan and South Korea are saying. Europe, on the other hand, tried procurement through an entity of the German government. It made one award, but the PPAs they’re willing to award are for seven years. The European Union has set a green-hydrogen target 10 million tons by 2030. So how will they ever get to that target?
What can make green hydrogen work?
The reality is that green hydrogen needs subsidies to make it compete with grey hydrogen. No government wants to give such subsidies. And nobody wants to mandate it, either. Unless there’s a global mandate, why do you want to make your own companies uncompetitive?
Will prices of solar modules and cells go up this year?
Prices in India are ultimately driven by prices in China. We have to import the wafers or the cells. I don’t think they will go down anymore. They’ve gone up a little bit in the past few months.