“Corporates Will Be key To Meeting India’s 450 GW Renewables Aspiration”

Srinivasan Viswanathan, CEO of Vibrant Energy is looking ahead to a great run for the firm, as the market continues to open up and throw up new opportunities.

Backed by Macquarie capital’s Blueleaf Energy which owns a majority stake in the firm, Vibrant is focused on the corporate market for renewables, with a stress on solar backed solutions.

Q. Tell us about your existing portfolio?

Srinivasan Viswanathan: As a company Vibrant has 132MW of operational capacity in the states of AP, TS and Maharashtra. At the same time the total AUM (assets under management, which includes operational + under construction+ exclusivity) at 915MW.

Q. Is the firm focused on specific geographies for now? What about specific industry segments too?

Srinivasan Viswanathan: At present, we have been catering to all industries and market segments within the Indian corporate landscape and have been able to empower corporates to become 100% renewables. Additionally, we look forward to providing round clock renewables on demand and also delivering sustainable fuels like Green Hydrogen and Green Ammonia.

 

Q. Now that ESG is finally coming to the forefront, do you believe the corporate sector can drive solar capacity growth in India?

Srinivasan Viswanathan:

 We strongly believe that the commercial and industrial segment with its emphasis on ESG will be bigger than the Discom tender market segment. A large part of India’s 450GW renewables aspiration will be met by a demand for renewables from the corporate segment. As customers across the C&I segment are on a constant lookout for hybrid solutions and round-the-clock power to meet their energy needs, it provides multiple avenues and opportunities for developers to come up with innovative and cost-effective solutions. Vibrant Energy has also been providing a lot of customers green certificates by building VPPA projects on the ISTS grid.

Q. How much of an impact will the higher module prices and broader inflation have on power costs for your customers.

Srinivasan Viswanathan: The higher module prices are a dampener in the short term. However, we hope that the government creates a level playing field that allows more clarity and certainty on how a large GW demand can be met through both import and domestic procurement. The tariff and non-tariff barriers, together with PLI for the manufacturing sector have been able to scale-up of capacities and hopefully, it will be a counter-weight to the higher module prices we are witnessing now.

Q. What is Vibrant Energy’s target for say, 2025? Short term targets?

Srinivasan Viswanathan: We have a total AUM (i.e. assets under management, which includes operational + under construction+ exclusivity) at 915MW, which is expected to be operational in the next 18-24 months. We also have over 2GW of pipeline under development to cater to our future growth. By 2025, we aspire to be a platform with more than 2GW of renewable assets under management.

Q. The solar financing model is a thriving multi-billion-dollar business in the US and many other markets. Why hasn’t that happened in India yet? What would it take to change it?

Srinivasan Viswanathan: India is one of the fastest-growing markets in the world and hence will continue to attract all types of financiers. We believe India will be going to a 30 GW annual capacity addition, from the current level of 10 GW. With our ambitious targets, net-zero aspirations and a transparent bidding paradigm, we aim to attract capital as well, like the US.  The continuing effort to reform the electricity sector, supply chain constraints, and regulatory frameworks will be important and key to making this happen.

Q. Do you believe the group captive model is limited by the high credit rating requirements it demands of customers? Is there a way around that you see?

Srinivasan Viswanathan: Some form of credit enhancement product or insurance product to backstop the credit quality might be useful additions to bring to the market. The other option is that Indian banks (like the banks in developed markets) can lend based on risk premium on the probability of default and allow for all customers to be financeable.

Q. On the technology side, how have you seen the market evolve over the past 5 years? What are the changes you expect to see in the projects of tomorrow?

Srinivasan Viswanathan: Solar cell technology has been improving drastically. New technologies like HJT and Topcon will rule the module technology landscape soon. This can further ensure higher efficiencies, lesser land requirements, and larger module sizes a real possibility.

Q. Are India-based developers and EPC firms competitive in other Asian and global markets?

Srinivasan Viswanathan: This is a difficult question to answer as the lay of the land, policy, customer, and regulation is different for each market. The Indian EPC firms have proven themselves to be globally competitive outside India too.  We haven’t had many cases of Developers, moving out of India and developing projects.

Q. Does Vibrant manage O&M itself for its projects? Do you see an opportunity in O&M of large plants for independent specialists?

Srinivasan Viswanathan: As many companies prefer to have a managed solution for O&M that can take care of day-to-day requirements, there is a huge potential for independent specialists in the O&M space. Owing to our business model, we have outsourced the on-ground O&M activities. While we manage the O&M for our customers, some key asset management functions are being managed in-house by our team.