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Tata Power’s plan to transit from Non Renewable to Renewable

India’s largest private integrated power company, Tata Power plans to lead the nation into transitioning into renewable energy with gradual withdrawal from building new coal fired power plants, according to ‘Tata Power: Renewables to Power Growth’ report released by Institute for Energy Economics and Financial Analysis (IEEFA).

The company’s ‘Strategic Intent 2025’ plans for up to 70% of all the newly added capacities to come from renewable sources such as Solar, Wind and Hydro.

According to the report, majority of Tata Power’s thermal capacity is centered on its Ultra Mega Power Project in Mundra which is currently incurring a loss of Rs 1,500 Crore, thereby disturbing the company’s overall financial performance.

Tata hopes to reduce their losses by half by increasing the tariff for the consumers, and thereby bring forth a debt write down for lender banks. This acted as a learning experience for Tata Power and has thereby convinced the company to look away from construction of any other new coal fired power plant.

With more than 40 GW of existing coal fired power plants under financial stress in India, the company plans to add thermal plants acquired through distress sells at 30-40% of historical Investment

The company is also leading India in rooftop solar, EV charging via its recent installation of the country’s first grid-scale battery storage system alongside Mitsubishi Corporation and AES India. However, Tata Power would need to increase its Renewable Energy installation rate significantly if they plan to meet its Strategic Intent target of reaching up to 11.3 GW of non-fossil fuel power capacity by the year 2025.

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