Tata Power Plans to Add 2.5 GW of Solar Power In FY24

Tata Power Renewable Energy Ltd Inks PDA for 13.2 MW Group Captive Solar Plant 

Tata Power, an electricity generation company, has planned to add 2.5 Gigawatt (GW) of solar energy in FY24, the company’s top management said in its latest investors call. The company recently submitted the call details to the Bombay Stock Exchange (BSE) in its self-disclosure.

The decision comes after an unexpected consumption increase of only 1.5% during the last quarter, defying earlier consumption trends. The CEO and Managing Director of Tata Power, Praveer Sinha, stated that the company’s expectations were not met due to the marginal rise in power consumption. However, he also highlighted the dramatic drop in solar material prices, including solar cells, modules, and wafers. This price decline, combined with anticipated oversupply due to capacity additions in China and Southeast Asia, will restrain solar material prices in the future.

Sinha also emphasized the importance of favourable weather conditions in contributing to their operational stability. He noted that if the current heat conditions persist, their operations at Mundra will remain cost reflective, with minimal losses incurred.

Despite facing reduced profits in the coal business due to falling prices, TATA Power’s generation business, along with its renewable and transmission and distribution (T&D) businesses, showcased stability and improvements. Sinha attributed this stability to a more robust fundamental business model. He projected that this trend would continue in future quarters, heralding a precursor to even better results.

The electric vehicle (EV) business also performed remarkably well for TATA Power. With a broad presence across the country, the company operates nearly 4,400 public charging stations, 50,000 home charging setups, and many bus charging stations. Particularly noteworthy is their effort in installing approximately 1,200 bus charging stations in various cities through OEM partner Tata Motors, contributing significantly to the EV ecosystem.

Sinha touched upon various aspects of TATA Power’s renewable energy portfolio. He revealed a cautious approach regarding solar pumps due to the lack of orders under the KUSUM program and the low margins from earlier initiatives. TATA Power is awaiting the revised KUSUM program before moving forward aggressively. On the other hand, the rooftop solar business experienced impressive growth in the quarter, with improved margins and a strong presence across 460 cities through channel partners.

Sinha explained that the full benefits of lower cell and module prices would be reflected in subsequent quarters. He expressed optimism about the positive impact on overall business performance in the coming quarters.

TATA Power’s future plans include capitalizing on opportunities in various sectors, including electronics, batteries, semiconductors, and EV manufacturing. Sinha projected a future with renewable energy supplying virtually 100% of the company’s customers, highlighting its commitment to sustainability.

Lastly, Sinha shed light on the evolving landscape of solar pumps and rural electrification projects in different states. He anticipated that combinations of initiatives like KUSUM C and plans for solar generation in rural areas would contribute to a more extensive penetration of solar energy in these regions.