New Delhi: Russia’s Rosatom State Atomic Energy Corp. is exploring an investment in Inox Group’s wind turbine manufacturing business, said two people aware of the development.
The Russian government company’s interest in India’s second largest wind-turbine maker by market share stems from its strategy to gain control over the supply chain, which in turn will help towards reining in costs and offer competitive tariffs in the country’s wind power space.
“Rosatom is exploring this investment given its interest in the Indian wind energy space. It is trying to build a manufacturing presence. Through its unit JSC OTEK, it already has a partnership with the Netherlands’ wind turbine maker Lagerwey Wind BV," said a person aware of the development, requesting anonymity.
Another person who also didn’t want to be named confirmed the development and said that the talks were in ‘early stages.’
This comes at a time when the Indian wind energy tariffs have crashed, with firms including Inox Wind Infrastructure Services Ltd bidding Rs3.46 per kilowatt hour (kWh) of wind energy to win contracts from state-run Solar Energy Corp. of India (SECI) in February. This is expected to fall further to a record low of around Rs3.30 per unit in a 1 giga watt (GW) tender by SECI.
The $3 billion Inox Group in March announced selling its operating wind power farm assets to Leap Green Energy Pvt. Ltd. These 260 mega watt (MW) assets are owned by Inox Renewables Ltd, a wholly owned subsidiary of Gujarat Fluorochemicals Ltd and a part of the Inox group.
The Inox Group is a diversified conglomerate, operating in industrial gases, chloromethanes, refrigerants, fluoropolymers, multiplexes, wind turbine manufacturing and cryogenic engineering.
Rosatom which is already present in India through a partnership with state-run Nuclear Power Corp. of India Ltd for the Kudankulam nuclear plant in Tamil Nadu, is interested in the wind energy space with around 40 million unelectrified households in the country. Attracted by the opportunity to cater to around 304 million Indians who live without access to electricity, Rosatom is planning to enter the country’s renewable energy sector and also planning to set up small hydropower projects here, Mint reported on 12 June.
Queries emailed on 24 July to the spokespersons of Rosatom and Inox group remained unanswered. While a Rosatom India spokesperson said that Mint’s queries have been sent to OTEK, no response was received till press time.
Inox Wind has a 1600MW manufacturing capacity with three facilities at Ahmedabad (Gujarat), Una (Himachal Pradesh) and Barwani (Madhya Pradesh).
According to Inox Wind, its net worth as of 31 March 2017 was Rs2,190 crore with a cash balance of Rs749 crore. It recently settled its dispute with Jeena and Co., a freight company that had filed a case against the wind energy firm with the Chandigarh bench of the National company Law Tribunal (NCLT) for bankruptcy proceedings.
India has a target of installing 175,000MW of renewable energy by 2022. Of this, 100,000MW is to be generated by solar projects and 60,000MW by wind projects. The country had an installed wind capacity of 32,279.77MW as of 31 March.
This share will further expand, given India’s growing green economy.
According to the draft national energy policy of government think tank Niti Aayog, “By 2040, the energy mix of India is expected to become renewable intensive, with 46-52% of the power capacity being solar and wind dominated."
Apart from on-shore wind, the government is also exploring the potential of off-shore wind power. In September 2015, the central government had come out with a National Offshore Wind Energy Policy, aiming to harness wind power along India’s 7,600km coastline.