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Hero Future Energies chief executive officer Sunil Jain has welcomed the suggested amendments to the Electricity Act calling them 'path breaking'.
Hero Future Energies chief executive officer Sunil Jain has welcomed the suggested amendments to the Electricity Act calling them 'path breaking'.

'Investor friendly regime needed to make power sector Atmanirbhar'

  • Hero Future Energies CEO Sunil Jain says a combination of tariff and non-tariff barriers can make domestic manufacturing truly ‘Atmanirbhar’
  • With an installed capacity of 1.3 GW and an additional 1.5GW under construction, Masdar-backed Hero Future plans to build a 5GW portfolio by 2022

NEW DELHI: India’s clean energy space is going through a churn with power procurement curtailment and tariff shopping by discoms making developers; including even some of the large green energy portfolios seeking a flight path for survival. In an email interview, Hero Future Energies chief executive officer Sunil Jain, who had earlier helped set up Green Infra Ltd, talks about India Inc' asks for an investor friendly regulatory policy to make power sector Atmanirbhar and not 'Sarkarnirbhar' (government dependent).

He also responded that in times of pandemic, renewable energy offers a safer haven and that there's an impending need for reforms and reliefs to match the cost of solar panels from China. Jain also talks about the Abu Dhabi Future Energy Co., or Masdar, backed firm's plan for its first international solar project commissioning in Ukraine by this year, besides the impending stake sale. Edited excerpts.

How is India’s renewable energy sector and Hero Future Energies in particular faring during the Covid-19 pandemic?

Covid-19 times have made it clear that clean sources of energy are the ‘old-yet-new normal’. Although at a national level, power demand was significantly down by almost 25-30% due to the lockdown, the situation has now started to return to normal with the unlocking of the economy. Renewables enjoy a favourable “must-run" status and the impact has been minimal as the industry continues to operate in a business-as-usual environment. Revival of renewable sector amidst others, is a safer haven. Also the ministry of new and renewable energy's (MNRE) support in these times was clearly visible to ensure no untoward risks are added to the sector.

The development of new projects, however, has been significantly impacted by the shutdown of projects due to lockdown. Once the national lockdown got localised, it created issues on the logistics and manpower front, which slowed the development process. The return to normal is expected to take longer as the global supply chain limps back to normalcy. Though rooftop installations felt the repercussions too, but the pent-up demand is restoring with the unlocking process. However, at Hero Future Energies, after the initial hiccups during global pandemic, our new capacity addition program is back on track.

Several clean energy projects are in limbo. With fund-starved state discoms unwilling to sign contracts, and the ones already inked not getting honoured, India’s teflon image as a green economy seems to be wearing off. Your views.

The clean energy space in India is going through a temporary setback, I agree. However, the Solar Energy Corporation of India Ltd (SECI) is confident that all the signed contracts for projects will be honoured. Also, states cannot afford to not buy such low-cost green energy for 2.50 for the next 25 years. I believe that with our targets set at a reasonably high mark of 175 GW by 2022, such roadblocks are bound to appear. But I have witnessed compelling intent of both industry and our government to work around the challenges and work passionately towards the Hon’ble Prime minister's vision of 175 GW.

Hero Future Energies has been looking to sell a stake in its clean energy business and has asked HSBC to find a buyer. What has been the development on that front?

As an infrastructure outfit, growing capital needs are not uncommon. This directly supports our mission to shape the cleantech sector with differentiated projects both in Indian and global markets.

What is the news on your global expansion plans?

Despite the impact on supply chains and execution due to Covid-19, we will be commissioning our first international solar project in Ukraine of 52 MW capacity by the end of this year. A credible pipeline of wind and solar projects of Hero Future Energies is in the development phase in south east Asia. Presently, the company is also focusing on India’s neighbouring countries to develop differentiated solar projects. Our international project pipeline looks healthy and we are on track with our new capacity addition targets for 2022 based on the two clean resources.

With India’s power sector being weaponised to firm up our economic responses against China, how will this play out for India’s clean energy space?

I have mentioned my key concern across industry forums already, but as your question indicates weaponising of this sector, I do not quite agree to this. As a home-grown company, we enthusiastically support the Atmanirbhar Bharat mission. Government of India is now finally scaling up the domestic manufacturing sector. This sector needs doses of reforms and reliefs to match the cost of solar panels from China. And, a long-term perspective to manufacturing industry coupled with tariff and non-tariff barriers can make our domestic manufacturing sector truly ‘Atmanirbhar’.

Will the much-anticipated amendments to the Electricity Act (EA) such as appointment of a regulator and setting up of an Electricity Contract Enforcement Authority turn out to be a silver bullet for the sector?

The Hon’ble minister's recommendations in the Electricity Act are path breaking and could be the tipping point for Indian power sector for times to come. Many of the amendments are aimed at fixing the current pressing and prevalent industry issues. The industry asks for an investor-friendly regulatory policy to make the power sector ‘Atmanirbhar’ and not ‘Sarkarnirbhar.’ The need of the hour is for states to accept and ensure speedy implementation of EA amendments. These amendments have been demanded by the industry since a considerable time. We believe that the formation of an Electricity Contract Enforcement Authority, maybe not only be a silver bullet, but a golden bullet towards ensuring that contracts are enforced and there is no defaulting on these legally binding contracts by some states. The high consequences for non-compliance with contractual terms should also improve discipline. Direct Benefit Transfer (DBT) is a much-needed initiative which will work for financial sustainability of the discoms, many of which are in dire financial conditions. Encouraging private sector participation in the distribution sector will improve efficiency. With enforcement of DBT, ‘robbing Peter to pay Paul’ can be done away with. The National Renewable Energy Policy will also boost investor confidence.

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