Renewable energy developer Serentica Renewables is strategically employing a diverse mix of solar, wind, and energy storage technologies. The company has recently embarked on a collaborative effort centering around a standalone energy storage offtake contract. This strategic move is anticipated to position Serentica as a key player in delivering 1,500 MW of uninterrupted power, with a specific emphasis on industries highly sensitive to power disruptions.

In this exclusive interview with Mercom India, Akshay Hiranandani, CEO of Serentica Renewables, delves into the company’s ambitious plans for installing 4 GW of green energy projects, their customer-centric approach, financing strategies, challenges in the green energy open access market, and insights into the future growth trajectory of this dynamic sector.

Here are the excerpts from the interview –

1. How does Serentica Renewables plan to differentiate itself in the market to attract large-scale, energy-intensive industrial customers?

Through a mix of solar, wind, long-duration, and short-duration energy storage technologies, along with digital tools for optimization, we ensure customized and efficient energy solutions for our industrial customers.

We are committed to providing round-the-clock green power, addressing the critical need for uninterrupted electricity in industries such as metals and mining, oil and gas, cement, pharmaceuticals, and textiles.

Moreover, our shift in procurement strategy, transitioning from conventional power purchase agreements (PPAs) to service level agreements (SLAs), showcases our dedication to adaptability and our ability to respond promptly to customer requirements.

The diversity lies in our ability to connect these industries to the central grid, facilitating a transition from state routes to centralized power supply. This specialization is particularly valuable for industries requiring a large quantum of power, as our expertise ensures a stable and reliable energy supply and strategically builds a project development pipeline of an additional 4 GW that will enable us to deliver power within 12 to 15 months of PPA signing.

2. Can you tell us more about Serentica Renewables’ plans to install 4 GW of green energy projects in Rajasthan, Karnataka, Maharashtra, and possibly Andhra Pradesh?

We are currently adding 4 GW of wind and solar capacity across three states, which are Rajasthan, Maharashtra, Karnataka, and potentially Andhra Pradesh, capitalizing on their strong wind resources.

This strategic allocation ensures optimal utilization of each state’s renewable energy potential, enabling Serentica to cater to the specific energy demands of different regions.

To promote Renewable Energy, the government of India has given the benefit of an ISTS charges waiver, which is a very important tool to achieve the industry’s net zero ambition. Using the waiver, the projects can be set up in resource-rich renewable energy states, and power can be supplied to anywhere in the country through the national grid at a cost-competitive rate.

Our emphasis on round-the-clock (RTC) power generation necessitates a diverse mix of site allocations and renewable energy technologies, including both long-duration and short-duration storage solutions. This approach allows us to ensure a stable and reliable power supply to industrial customers, regardless of variations in resource availability.

We intend to expand our operations into the states of Andhra Pradesh, Madhya Pradesh, and Gujarat as part of our strategy to diversify the locations of our assets. This move is driven by the opportunity to capitalize on the natural distribution of resources, enabling us to optimize 24-hour generation profiles across these regions.

3. Recently, the company has entered a collaboration with Greenko Group for a standalone energy storage offtake contract. Can you provide us with insights into the deployment of this storage capacity?

Our collaboration with Greenko positions us as a leading independent renewable power producer (IPP), capable of delivering uninterrupted renewable energy around the clock to our industrial customers at affordable tariffs.

We will utilize 1,500 MWh from Greenko’s upcoming projects in Andhra Pradesh and Madhya Pradesh, enabling us to deliver 1,500 MWh of uninterrupted power for industries sensitive to power disruptions.

Pumped hydro storage projects, known for their long operational life and high efficiency, offer reliable and cost-effective solutions for energy storage needs. They support the integration of renewables by providing a proven method of storing energy on a large scale.

This allows the storage of excess renewable energy during off-peak demand, which can be utilized during high-demand periods, ensuring grid stability.

4. What are your plans for raising the financing needed for these projects?

Backed by the global private equity major, KKR, we have a substantial equity commitment of $650 million. On the debt side, we are leveraging innovative financing mechanisms to support our RTC green power initiatives for industries that are challenging to decarbonize.

Our successful fundraising efforts include securing ₹1.5 billion from domestic institutions such as REC, PFC, and Tata Capital, among others, as well as External Commercial Borrowings (ECB) led by esteemed global financial institutions in this sector.

We are actively collaborating with our domestic and ECB institutional partners to secure additional debt capital for our ongoing construction projects and those in the pipeline.

Anticipated to reach approximately $3 billion over the next 24-36 months, these funds will further fuel our commitment to sustainable energy projects.

5. What are some of the unique challenges in the green energy open access market? What are the concerns of large industrial consumers when it comes to procuring green energy?

One significant challenge in infrastructure development, particularly in acquiring land for projects, involves local communities relinquishing parts of their land to external companies. While effective stakeholder engagement and community outreach can help manage this issue, it remains a persistent hurdle.

Additionally, the growth in renewable energy generation capacity far outpaces the development of transmission infrastructure responsible for carrying this power to load centers. The delay in upgrading the grid can expose projects to risks such as curtailment and uncertainty over offtake volumes, especially under short-term open access agreements.

Developers must meticulously assess grid conditions and strategically plan project locations to avoid partial curtailment due to congestion. Synchronizing generation investments with the strengthening of the transmission system is crucial to mitigating these risks and fully realizing the potential of renewable energy assets.

Proactive collaboration between generators, transmission companies, and regulators is essential to prevent renewable capacity growth from outpacing the grid’s capacity to absorb it.

Large industrial consumers seeking to procure green energy express concerns about ensuring a consistent and reliable supply at competitive pricing with minimal disruption to their operations.

They also emphasize the importance of clear regulations and policies regarding open access and net metering, along with access to energy storage, to address intermittency challenges.

Addressing concerns related to reliability, pricing stability, policy certainty, and risk mitigation is crucial for successfully selling green power to large industrial loads within an open access framework.

6. How do you foresee the growth of this market? How do you think it will evolve?

The green energy open access market has been experiencing rapid growth in recent years, driven by various factors such as the declining costs of renewable energy, supportive government policies, a surge in energy demand, and increasing sustainability commitments from corporate buyers.

The government has implemented several policies to foster the expansion of the green energy open access market. Notable initiatives include waiving transmission charges for renewable power traded over the central grid and facilitating pan-India open access at zero cost.

Additionally, the government has de-licensed customer transmission lines, permitting large consumers to construct private lines connecting renewable projects.

Central Transmission Utility now strategically plans transmission infrastructure to evacuate renewable power from high-insolation states like Rajasthan, Gujarat, Maharashtra, Andhra Pradesh, and Karnataka. These measures underscore the government’s dedication to facilitating renewable open access.

Open access not only shields renewable projects from price and offtake risks associated with traditional utility power purchase agreements but also presents significant market potential considering the substantial energy demand from industrial, commercial, and institutional consumers.

The responsibility now lies with the private sector to ensure responsible community engagement and effective stakeholder management in their renewable energy projects. While the government has set the stage for accelerated growth in open-access renewable energy, the private sector must take the lead in on-the-ground implementation while upholding social and environmental standards.