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Suzlon Group founder, Tulsi Tanti visited Ahmedabad on Saturday for a roadshow for the company’s upcoming ₹1200-crore Rights Issue. The renewable energy veteran held an exclusive interaction discussing about the opportunities for Suzlon and the renewable energy sector in India showcasing the roadmap for the next 25 years. In a candid chat in his mother tongue - Gujarati - Tanti’s eyes beamed with sparkle while talking about his native place - Rajkot and his schooling at St Mary’s and about the one of the first plotted residential societies his father founded in the city. Below is the edited excerpts of the exclusive interview, which turns out to be his last with any mainstream business media.
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Tanti spearheaded the wind revolution in India founding Suzlon Energy in 1995How is the current market opportunity in renewable space for Suzlon?
There are market-driven and policy-driven opportunities now. We have over 20 manufacturing facilities and we are geared up to realise this potential. As you know, we are on the course to reduce our debts, this is to grow in future. A reduced debt improves our eligibility for working capital facilities. And only if the working capital is ensured, we can increase the volumes on manufacturing and only then, we can grow. We have an installed capacity of 3000 Mw to meet the growing demand. The current market is a tailwind for us.
What is your orderbook position at present? Where will the new projects come up?
We have orders of about 850 Mw to be executed in the next 12-18 months. The upcoming projects are in Gujarat, Karnataka, Tamil Nadu, and Rajasthan.
How have been the input costs in recent times? When do you think it will stabilise?
The production costs have gone up by about 10-12% in past one year due to rise in steel, copper, petrochem products, etc. The major component of cost is steel costs. By the end of 2023, we will see commodity price stabilising.
How do you see renewable sector gaining prominence in India?
Last year, our crude oil import bill just doubled not because our consumption has gone up to that extent, but the crude price and the currency exchange rate has increased resulting into an increase in our import bill. The solution to this is in renewable energy. Not just for power generation but also to reduce the import bill by replacing oil for making hydrogen, ammonia, and methane with renewable energy. Reliance and others have started working on it. We too are working in the direction to develop a technology for this. It is to be seen how we do it.
Our population is growing from 1.2 billion to reach about 1.6 billion in 2050 and about 2 billion by 2070. So, our energy needs would be more.
The Prime Minister has brought a well-thought-out scheme of ‘Panchamrita’ laying down target for 2030 of renewable generation of 500 Gigawatt among others. Next 25 years are very crucial for India to quickly implement all of this.
What is Suzlon’s target in next 25 years?
That’s a forward looking statement. There are restrictions due to the Rights Issue, I’ll talk after October 21.
How are States doing for renewable?
There are eight states that are more active. Gujarat is at the top, followed by Tamil Nadu, Karnataka and Rajasthan next, Maharashtra, Madhya Pradesh, and Andhra Pradesh. Interestingly, Uttar Pradesh has started renewables pretty fast. Till recently, there were no renewable investments in Uttar Pradesh. But, it has started receiving investments in renewables for the first time now. Approximately ₹900-1000 crore investments have already been committed there, for solar. Also, we are seeing similar solar capacities coming up in Punjab.
What is the investment potential do you see?
India has so far done 160 Gw of renewable, while the target under Panchamrita is 500 Gw by 2030. This would require investments of about $400 billion. So, in next eight years, about $50 billion will be needed every year. But, we don’t have this money. So, we are trying to convince the world and create our brand as an investment destination in renewables.
Are lenders more confident about funding renewable projects now?
There was a phase earlier, when lenders were not confident about the sector. But now, lenders are funding it and finding promising returns from it.
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