TATA'S GREEN POWER PLAY

India's decision to add 500 GW renewables to its energy mix has triggered a power sector marathon. Whoever greens the fastest will win. Tata Power is training hard

- Ayaan Kartik

More than a hundred years ago, standing by the Kundalika river in Roha near Mumbai (then Bombay), Tata Group founder Jamsetji Tata had an epiphany. Staring at the ebb and flow of the water, Jamsetji wondered if the river could be harnessed to power Mumbai. And thus, was born Tata Power. The company, 109 years later, finds itself at the crossroads again.

India wants to add 500 gigawatt renewable energy capacity by 2030 to meet its carbon emission reduction targets. But as of June 8, thermal power made up 54.9% of India’s total installed capacity, Union power ministry data shows. The Central Electricity Authority’s update for April shows thermal makes up for 79.8% of India’s total energy generation.

A new power economy is the need of the hour. What will that mean for Tata Power?

“The company has expanded itself in the renewable space. It is not just about setting up large utility-scale plants. We have built large utility-scale plants of every type—solar, wind, hybrid and bundled power among others,” says Praveer Sinha, Tata Power’s chief executive.

Tata Power has plans to spend big over the next decade. In January, the company announced a ₹70,000-crore investment to build 10 gigawatt of solar and wind capacity in Tamil Nadu. The big capital push comes after years of deleveraging and shifting strategic priorities.

Getting a Messy House in Order

The past decade was challenging for India’s power sector. Investments only trickled in. The average plant load factor of thermal plants—a measure of actual power output against the maximum possible—shrank from 77.68% in 2009–10 to 55.89% in 2019–20. Companies struggled to make optimum use of their plants. Their cash flow suffered. In April 2019, outstanding dues of state government-owned discoms reached ₹21,198 crore.