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The panel discussion at Mint’s annual energy conclave on India’s green energy transition and energy security saw the participation of NTPC chairman and managing director Gurdeep Singh, NTPC Renewable Energy chief executive Mohit Bhargava, Actis LLP partner Sanjiv Aggarwal, Convergence Energy Services managing director and chief executive Mahua Acharya, and Boston Consulting Group’s managing director and partner Vishal Mehta.

What are NTPC’s challenges as it pivots towards green energy?

Singh: We have the responsibility to provide affordable, uninterrupted power. Going forward, it should be as clean as possible…so the transition which is inevitable. We have to go for more and more renewables. Having said that, our first responsibility will always be towards the consumer for getting reliable and uninterrupted power supply.

How are states geared up for the transition?

Singh: We are probably the largest synchronised grid in the world and you will notice that we are having one frequency across India and at most times the frequency remains close to 50 hertz (Hz), which is the fist indicator of quality (of electricity supply). Besides, you will rarely find problems in the grid nowadays…Let us also give credit to discoms and states for doing their best and I have no hesitation to say that barring one or two states we are able to realise 100% of our dues year after year…they have their trust in us and we have trust in them.

With India running one of the largest green energy programmes in the world, is it too late for some investors to catch the bus?

Aggarwal: It is not. In 2014 when we started looking to invest in the Indian renewables space, this was exactly the question that was asked of us—are you too late to the party? We were not, because the story was just taking off. Today you ask me this question and my answer is still the same. No, its not too late. The market will change. Over the past seven years, we had a particular type of market in the renewable sector. It was earlier feed-in tariffs, then we moved on to auctions, but the underlying theme was that there are going to be government counter parties which will have power purchase agreements (PPAs).

Going forward that market is going to change. That market will evolve along the lines of what trajectory the international emerging markets take. The comforts of long-term government PPAs will keep on reducing and the market will evolve more towards a market-based mechanism for short-term demand-based PPAs, technology based PPAs, storage PPAs, and round-the-clock. The point I am trying to drive at is: we will require a different set of investors for a different market regime. A set of investors existing today may not be comfortable with taking a market-based approach to investing and they will perhaps walk away. But there will be other investors who will come in, who understand it, who are investing in other markets and have the technology and understanding. As far as late stage investors are concerned, India is a great growth story. As Indian macros keep improving, power projects will always be seen as a source of steady cash flows to pension funds.

How are states responding to green mobility?

Acharya: We are aggregating demand. The hypothesis is that once you get around to aggregating demand, not only will you reduce prices but can do large scale financing, and standardise contracts—things that otherwise you would not have been able to consolidate. And, states are responding surprisingly well. It took us about three months to develop models, which are very different for a two-wheeler, three-wheeler, or four-wheeler and, most certainly, for buses. The markets are completely different. We have different desires on the kinds of bikes to get on. So, catering to that, I initially was a bit zapped. How on earth does one aggregate demand over here? So, it took some time to get around it. Aggregating of demand in two-wheeler is not the same as aggregating auto rickshaws. It’s in fact a consolidation game around giving access to maximum amount of choices. The states quite liked it. All of our programmes thus far are intended for government employees. The biggest issue with electric vehicles is that it is far more expensive. When you go to a retail showroom the first thing you get is a sticker-shock. So that sticker shock—something that we are still dealing with. That’s really what we have to address.

What can we expect considering that some investors might find it daunting to do business given the complexities?

Mehta: Investors come in at different points of a life cycle. Similarly corporates come in at different points. So, you saw renewables largely driven by startups, and then mainstream corporates getting into it. So right now, probably it is one of the most exciting times in 20 years in the field of energy. The last time I saw so much investment and so much interest from investors and corporates was during 2005-2008, where a lot of capacity got created on the back of the new Electricity Act. You are seeing a similar moment now. The only difference is that the market is much more complex than it was earlier. When you have complexity, you will have all types of people wanting to invest in it. I am not the master of investing but wherever we see complexity, there is opportunity.

NTPC became a disruptor by bidding a record low solar tariff of Rs1.99 per unit which still stands today.

Mohit Bhargava: It’s no disruption I will say. Its probably a natural positioning as it is happening because there are more and more players coming in….Things have gradually improved in terms of technology, in terms of supply and in terms of costing. So all these things put together actually lead you to a position where you can probably bid that number. But offcourse subsequent to that there have been other disruptions in terms of module prices going up and supply chain issues. So, this is a dynamic situation. In a way Rs1.99 per unit tariff has stuck along for so long, it might actually go down maybe in the next auction for all you know.

On the pivot side that is the biggest pivot that we are actually doing. From a regulated base to a competitive base…And offcourse renewables is happening naturally…We have to be there.

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