Tata Power to scale up internal renewable energy component supply chain

Plans to manufacture key parts rather than buying them

To navigate the supply chain challenges in its renewable energy (RE) businesses, Tata Power is looking to scale up the manufacturing of key components to meet the group’s needs across RE projects. If there is a surplus, the company will export it too, mainly to the United States, its senior management told Business Standard on the sidelines of RE-Invest in Gandhinagar.
 

The company plans to double its existing solar cell and module manufacturing capacity over the next three years, senior executives indicated. For energy storage, it has plans to invest in battery energy storage systems, which would also be developed internally, said executives.
 

Praveer Sinha, chief executive officer of Tata Power, told Business Standard that one big change that the company is making is getting into manufacturing key components rather than buying. “We were into procuring components, but now we will make our own to reduce price, bring in efficiency, and improve quality,” Sinha said. 

Tata Power CEO Paveer Sinha said the move would make the company self-sufficient and insulates us from a lot of external risks.
 

Geopolitical issues have threatened the company’s supply chain.
 

With the latest move, the company will be insulated from external issues such as supply shortfalls, transport challenges, and price fluctuations, he said.
 

Close to 90 per cent of India’s solar power projects are built on imported components. Tata Power was one of the early movers in solar manufacturing. With growth expected in its other RE segments, it now plans to scale up its solar manufacturing.

Deepesh Nanda, president of renewables at Tata Power and managing director and CEO at Tata Power Renewable Energy Limited (TPREL), said a major ramp-up of their solar manufacturing was expected by December 2024.

“On the manufacturing front, we have successfully operationalised our 4.3 gigawatt (Gw) module manufacturing facility, taking our total module manufacturing capacity to 4.9 Gw. Additionally, we have commissioned our first 2 Gw cell line, with the second 2 Gw line on track for commissioning in October. The ramp-up is expected by December, taking our total cell manufacturing capacity to 4.9 Gw,” Nanda said.

Company executives indicated that solar equipment manufacturing would primarily meet the demand of its sister companies, with exports considered only if there is a surplus after meeting internal needs. The US is a potential market for this.

Nanda said an integration of synergies is happening across the six business verticals of the company. “Our strategic focus revolves around three key pillars: driving execution excellence in our EPC business, achieving profitable growth in our generation portfolio, and ramping up our rooftop solar business. All the above businesses will benefit from our expanding manufacturing product range and capacity, which will provide the backbone for further growth,” Nanda said.

The six verticals are: solar cell and module manufacturing, power generation, EPC in the power sector, rooftop solar, and power transmission and distribution.

Nanda said all six business verticals are operating at near full capacity, with substantial growth opportunities on the horizon. “In power generation, we aim to achieve an operational capacity of 20 Gw by FY30, with 5 Gw under construction. Our EPC business carries a strong backlog of nearly $2 billion, reflecting a healthy balance of in-house and third-party projects. The rooftop solar segment has experienced a remarkable surge, with inquiries more than doubling compared to last year, indicating growing demand in the market,” he said.

While Tata Power has announced no future investment in thermal energy, it has no plans to go completely off-grid. “We would have to stay connected to the grid. Renewable is infirm, battery storage is yet to become completely reliable. So if I am catering to a C&I customer, I need to have a solution ready to supply round the clock,” Sinha said. He said tailor-made solutions are what work in the C&I segment, “where you mix and match energy solutions as per the sector/company you are catering to”.

Another key segment that Sinha believes will drive growth is rooftop solar in the residential sector. “Rooftop is spreading, especially in smaller cities. This is also leading to collaboration across the green supply chain. We are seeing consumers shifting to solar power for charging their electric vehicles,” Sinha said.

“Solar is becoming very important for the commercial and industrial sector. Along with the demand for round-the-clock renewable energy and our shift toward indigenous manufacturing, these four changes are shaping the way forward for Tata Power,” Sinha said.

Nanda said the company is also adopting lean practices throughout their operations to stay in sync with market changes. “These efforts reinforce our position for sustained growth and operational excellence, driving long-term value for all stakeholders,” he said.