Suzlon wins 1,166 MW order from NTPC Green: A role model contract, says CEO

Jayaram Prasad Chalasani, CEO, Suzlon | Photo Credit: DEEPAK KR

The contract that underpins the 1,166 MW order that Suzlon Energy received today from NTPC Green is a “role model contract”, says Jayaram Prasad Chalasani, CEO, Suzlon. 

This is because the land is available, the power purchase agreement (PPA) is ready to be signed, and the balance of plant (BoP) contracts have been awarded (to other companies). As such, there will be no delay in executing  the project, he said, speaking to businessline after the announcement of the order. 

Also, the order is a big win for Suzlon because it adds one more set of customers – PSUs – after utilities (electricity distribution companies or discoms), commercial and industrial customers (C&I) and retail (small order customers like textile mills.) 

For several years, Suzlon was not eligible to participate in PSU tenders because of eligibility criteria, such as net worth.  

Pointing out that today’s order is from the country’s biggest power utility to the country’s biggest wind turbine manufacturer, Chalasani said that, while future orders shall be won only through the bidding process, he saw this as the “beginning of a long-term relationship NTPC.” Incidentally, NTPC Green has floated another tender for 6 GW, as part of its ambition to achieve installed renewable energy capacity of 60 GW by 2032. 

Chalasani stressed that if India is to achieve the 500 GW renewable energy target by 2030, advance planning—as in this case—is necessary, so that the land and other infrastructure are available, and the BoP award is also decided. Often, one sees huge delays in the signing of PPAs and projects delayed due to slippage in BoP in the market. 

10-year O&M 

Chalasani explained that there are three separate contracts within this order—(1) supply and transportation, (2) civil foundation, erection and commissioning, and (3) operations and maintenance for ten years. 

While Suzlon has not disclosed the value of the order, the going price for a wind turbine in the market is around ₹6 crore an MW—for the machines alone, not counting erection  and commissioning services and O&M.  

The O&M contract for the NTPC order kicks in right away, in contrast with other orders in the market, where the O&M begins after the warranty period ends. O&M is a good margin business. Suzlon Energy is in the process of merging its O&M arm, Suzlon Global, with itself. It also recently acquired a 51 per cent stake in Renom, an independent O&M company, with a road map for raising the stake further. While Suzlon Global is for maintaining Suzlon’s own machines, Renom will take care of non-Suzlon machines. 

With this order, Suzlon’s order book rises to close to 5 GW. This should keep the factory busy at least this year and the next. The NTPC Green order of today must be commissioned in 16-18 months, so the supply of machines must be done in the next 12 months.