In the next 6 to 9 months, the company plans to invest Rs 1,400 crore to commission solar projects of around 200-300 Mw capacity.
Amplus Solar, the Gurugram-based solar power developer sees a strong growth potential in the distributed solar energy space where both rooftop and open access models remains its largest segment. In the next 6 to 9 months, the company plans to invest up to Rs 1,400 crore to commission solar projects of around 200-300 Mw capacity, Sanjeev Aggarwal, Founder and Chief Executive Officer (CEO), Amplus Solar Energy, tells ET Energyworld in an exclusive interview.
What is your perspective on the overall industry? What is the latest disruption in the solar industry as of now?
Overall there is a big shift happening in the industry towards renewables. Technology is driving this shift and making renewables more affordable. With the pace at which technology is evolving and solar is penetrating the market, there could be a time when it will start replacing the grid line connections. Time has come for the customers to make choices. It is now in the hands of people to choose the best source of electricity which is economically viable and environment-friendly for them.
You recently bid for MP government’s auction of 35 MW rooftop solar capacity along with many big players. Can you share the plan to develop the capacity won in the auction?
Out of 35 MW, we have been awarded 11 MW. There was good competition in the tender and the experience was also good because it was one of the rare government bids which were properly structured. Participation in a bid is based on perception and what people think about the structuring of the project. As a developer, if I perceive my risks to be lower in a certain project and I have complete information, I will be willing to quote the best price. They have allowed us 6-9 months for development of the project and we will complete the allocated capacity in the given timelines.
You also have Electricity Trading license. Could you explain what are the larger plans from it?
A trading license is a unique activity through which we can provide electricity to multiple customers. As of now, we are focusing on our internal plants but going forward we would like to see trading developing as a separate activity. We are trading around 200 Mw of solar energy from our own plants. Going ahead, trading activity will depend on the people who want to sell their electricity through our network. They may be people who have projects but lack access to the market which we can provide.
How much of a dampener is the imposition of safeguard duty of 25 per cent imposed on imports and how do you see its implementation in the current market scenario which, investors claim, is already difficult?
Nothing is going to change much. There will only be a short-term impact. Solar power prices are down to the extent that they are lower than the grid tariffs. It is reasonably cheaper for the commercial customers that we work with. We estimate that it will push up cost of generation by 30 to 40 paise. One year back the developers were bidding at Rs 3.50 and the consumers were happy. Now, if the base price is Rs 2.60 and with the impact of safeguard if the price goes up to Rs 3 per kWh, I think the customers should be satisfied. Duty imposition is just a psychological barrier. Is safeguard duty really serving the purpose? Should we really try to stop Chinese imports in the country? What will be the benefit for the consumers?
People will be paying higher tariff due to safeguard duty year after year. If you do a very simple calculation of this you can imagine the larger picture. A one MW plant generates 16 lakh units a year. As a result of 25 per cent safeguard duty, on every unit people are asked to pay 20 to 40 paise higher depending on the project size. This means just because of the safeguard duty, Rs 3 lakh is paid higher every year by the customer on a 25-year horizon on every MW. If the government really wants to encourage domestic manufacturing, instead of levying duty they should give them a direct manufacturing subsidy. Why do we have to stop the imports of a commodity that is oversupplied globally?
Amplus recently announced plans to set up 400 MW solar capacity in UP. What is the timeline for the commissioning of the projects?
In the first phase, we are planning to build up to 150-200 Mw capacity in UP. Our plan is to commission 70 Mw in the next six months and then 100 Mw in 6-9 months after that. This is a plan for the next 12 -18 months considering how the demand looks like.
We visualize Amplus to grow significantly, mainly in the area of distributed solar power where both rooftop and open access models remain as the largest segment for us. In the next 6 to 9 months, we have a plan to commission solar projects of around 200-300 Mw capacity with an investment of around Rs 1,200 to 1,400 crore.
Are you planning to venture into any new areas of business?
We have defined our goal to work in the distributed solar energy space. We are actually looking into the battery storage side. Renewables and storage together will start making a lot of sense, particularly in the distributed scenario. The other thing that we want to actively look at is the electric vehicle charging infrastructure.
Can you share some details of the plan on the storage side?
We are at the planning stage as of now. We have done 3-4 projects. This includes a project at a toll plaza at NH-24 which is of 100 Kilowatt capacity of solar and 100 kW batteries. We did another project in Chhattisgarh which is an off-grid application of storage. The third project is in Maharashtra which is again an off-grid application installed in a jungle. Off-grid is highly useful in areas where you cannot reach in a normal scenario and you require emergency energy which makes a lot of sense.
A lot of large companies use big UPS sets so they require batteries and that is an opportunity for us. If the government starts saying that during the peak time customers will be charged more, things will change. In order to balance the energy consumed from the renewable, distribution companies would charge more during evening hours when solar is not available. This again will be an opportunity for us from the storage perspective.
How do you visualize the overall renewable energy market growth over the next few years? What will be the main areas of opportunity for companies?
It is early right now but in the future, as prices come down, the opportunity will be fairly large because then you will become independent from the grid. The challenges on the policy side today are mainly because of the lack of network spread and banking. In future, every household will be like a PROSUMER (producer + consumer). They will produce energy for themselves to consume and sell the rest. That is why distribution companies have to change their mindset. They cannot restrict the customers for a very long time. Technology is changing so fast that it will find its way through.