Fortum’s solar strategy targets a wider geographic scope than the company’s current business portfolio, and hence will entail entering selected new locations globally. Fortum will carefully select a few geographies with excellent solar conditions. With technologies rapidly maturing, utility competences are becoming increasingly important in solar business, and expansion in solar fits very well Fortum’s vision to be the forerunner in clean energy. Overall, Fortum is targeting a gigawatt-scale wind and solar portfolio.
India is the first country Fortum has decided to enter, as the country offers one of the best solar resources and a sound government support for the development of the solar sector. The country provides a good platform for Fortum to further develop its business in solar also elsewhere.Fortum seeks to allocate of its planned growth capital in the range of EUR 200–400 million in solar projects in India.
Some large-scale greenfield development will be targeted to enable economies of scale. In addition, the company will consider seeking possible partnerships or other forms of cooperation, which would on long-term create a more asset-light structure. Projects in India are to be selected from various central, state and public sectors undertaking (PSU) schemes, which would guarantee a long-term power purchase agreement (PPA), taking into account Fortum’s Group financial targets.
Fortum currently has 15 megawatts (MW) of solar capacity in India. In January 2016, Fortum won a reverse auction for a 70 MW project with a fixed tariff for 25 years. In addition, on 12 April 2016, Fortum decided to bid for an additional 100 MWs in India, with a fixed tariff for 25 years.