“The Indian government ambition is to triple its solar capacities within two years from 35 GW to 100 GW, and EDF, as a global key player in renewables, is very honoured to contribute to this ambitious target for climate change. This participation involves, to a large extent, solar development, of which the costs have drastically decreased in 10 years and benefit from the good irradiation conditions of the country. EDEN Renewables is now an established solar power producer in India, clearly accelerating last year with the signature of long-term PPAs for four solar power projects totalling 716 MW in Rajasthan and Uttar Pradesh, which are currently under construction. This trend is now being confirmed with the additional recent successful participation in SECI’s and NHPC’s 2020-solar tenders. EDEN Renewables has won three projects of 300 MW each, to be built by 2022.
A number of players quoting low rates in the past have recently appealed to the government to terminate their contracts. What gives Eden Renewables the confidence that such low rates will remain viable in the near future?
The shareholders of Eden Renewables are two global leaders in the power industry that are committed over the long term and highly experienced, to develop their renewable power generation assets base all over the world. Hence, they have the financial resources and the know-how to deliver within the timeframe the projects that have been contracted in India, subject to unforeseen events or cases of force majeure. The ability to achieve competitive prices for electricity is driven mainly by each project solar resource, the cost to build a solar farm and the cost of capital in the country. It is also worth noting that the growing scale of the projects helps further improving the cost of production. EDF is confident that the solar rates can decrease even further if the technology keeps on progressing and price of the equipment continues to decrease.
Compared to the other parts of the world, how does India fare as an investment destination for renewable energy players? Are the policy signals from the government encouraging?
Regarding renewable power generation, India has developed over the years a policy framework that is comprehensive and procures to the developers, including the foreign ones, a satisfactory level of safety for their investments. The MNRE guidelines regarding the wind and solar PPAs and the efficient role of the regulator ensure the bankability of the projects and India’s legal system efficiency fosters the investors’ trust that they will be maintained in their rights if needed.
This is already a significant achievement, however, some points of attention remain, like the land policies which is source of concerns in some states, or the stability of the regulatory framework as mentioned previously. In order to keep improving the competitiveness of renewable energy in the Indian market it remains important to maintain access for the projects to a competitive cost of capital backed by the overall Indian economy performance with strong rupee, controlled inflation, competitive interest rates and financing terms, and also very importantly a stable and as foreseeable as possible regulatory framework.
Apart from development of standalone renewable energy plants, does EDF also have plans to foray in areas such as storage systems in India?
Storage technologies are progressing fast and we trust that their price will decrease significantly over the coming years. The EDF Group is on the forefront of the use of the storage for electrical systems globally, being a world leader of hydro-electricity generation and storage in the dams and having several utility-scale battery storage systems in construction and operation internationally. We are obviously looking forward to deploying these technologies in India as well.”