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After the Sembcorp's acquisition, through its subsidiary, of a 60 per cent stake in Green Infra Limited for nearly Rs 1,060 crore, industry experts say that at least 10 renewable energy companies with portfolios of nearly 100-300 mega watt (Mw) are waiting to be acquired over the next 12-18 months.
Madhusudan Khemka, chairman, Indian Wind Turbine Manufacturers' Association (IWTMA) said that the industry is seeing the next level of maturity and has started with local or Indian investors building a portfolio of anywhere between 200 and 500 Mw. These facilities are now changing hands with local investors exiting and international players coming in.
"These players have a pipeline of 2,000-3,000 Mw of portfolio. There are not less than 10 such companies which already have such plans, each having 100-300 Mw in the implementation pipeline. All these companies will slowly be acquired or merged. Big deals will happen in next 12-18 months," said Khemka, who is also the managing director of ReGen Powertech Pvt Ltd.
He said that ever since the new government started taking steps to boost the industry, investors have started looking at renewable energy in India more aggressively. The initiatives taken by the government include the re-introduction of Accelerated Depreciation (AD), which is crucial for creating a market, measures related to Renewable Purchase Obligation (RPO), proposed introduction of RGO (renewable general obligation) for distribution (earlier it was only meant for generation companies). These would pave way more investment flows into the country.
While the industry expects the RPOs to be increased, Gujarat has reduced the obligation and Andhra Pradesh is expected to reduce it further, even as many states have achieved RPO. However, the states are supposed to increase it further which is not being done and is as bad as reducing RPO, he said.
He noted that in 2012-13, almost 95 per cent of investments were from Independent Power Producers (IPPs), which is about 1.7 Gw and in 2013-14, it was 2.1 Gw. For the current fiscal, with the re-introduction of AD about 1.8-2 Gw from IPP from 0.5-0.6 Gw from AD could be generated. "Since the AD announcement came in very late, maximum benefits could not be availed, but for FY 2015-16 we aim at making the best out of AD (an estimate of about four Gw, of which one Gw will come from AD and three Gw from IPP)," Khemka said.
Till then, with the Government initiatives well in place, the target will be 6-7 Gw in 2016-17 and about eight Gw in 2017-18 and we aim at bringing it up to 10 Gw in a year from 2019-2020 out of which we expect 20-25 per cent contribution from AD.
"There is a big shift in the size of projects, AD has grown from 5-10 Mw to 15-50 Mw and for IPP from 50 Mw to 100 Mw," he said.
