 "Q&A with Tulsi Tanti")
Suzlon Group has installed 14,500 Mw of wind energy capacity in 17 countries, in about two decades. The company has seen ups and downs in the market and plans to diversify into solar energy solutions. In an e-mail interaction, after signing an agreement with the Tamil Nadu government, Tulsi Tanti, chairman and managing director, talks to T E Narasimhan on his plans. Edited excerpts:
How is the renewable energy business scenario in India?
The sector offers immense potential. Beside strong fundamentals, the government’s thrust on clean energy is driven by the need for energy security and growth. With its ambitious target of 175 Gw, comprising 60 Gw of wind energy, the sector should see a quantum leap in market size and growth in the coming years.
The cost of energy has come down substantially. A lot of private equity-backed integrated power producers have entered the green energy sector with huge investments, making it more organised and enabling a level playing field for all original equipment manufacturers.
What are Suzlon’s plans?
With our experience of 14,500 Mw of wind energy installations in 17 countries, market leadership, technological prowess and others, Suzlon is best positioned to capitalise on the opportunities across the globe. We will focus on tapping the immense opportunities in the high-growth markets of India, USA, China, Brazil, South Africa, Turkey and Mexico.
The Union cabinet has approved a national offshore wind energy policy. How will it help the industry and how does Suzlon plan to utilise the opportunity?
I am confident this announcement will simplify and create a single-window system for relevant approvals from various departments and state maritime boards. One of the key advantages of offshore wind energy is that large-sized project of 1,000 Mw and above can be built, with capacity utilisation of 45-50 per cent. We foresee an offshore wind energy revolution in our country, given India’s very long coast line.
Suzlon has access to the most mature offshore wind energy technology. We're currently conducting a techno-commercial feasibility study in Gujarat, which has 1,600 km of coastline. Suzlon has already identified more than 1,000 Mw offshore wind energy potential in the Kutch coast. Offshore will open new avenues for Suzlon's growth.
What would be the role of solar in Suzlon's overall strategy? And, what is the Tamil Nadu project about?
This financial year will mark our foray into solar, with plans to offer wind-solar integrated solutions. Solar is very complementary with wind. Suzlon has strong capability in projects, services and best practices to leverage our capabilities in land, utility relations, private equity, projects and services.
Our intention is to add capacity of 2,000 Mw clean energy projects over the next five years across Tamil Nadu. These are expected to attract investments of Rs 15,500 crore from various investors, with a potential to create 1,800 direct jobs. The agreements express our interest to install 500 Mw of onshore wind energy, 500 Mw of offshore wind, and 1,000 Mw of solar and solar-wind hybrid.
How much Mw is currently operational for Suzlon, in India?
Suzlon has 8,600 Mw of cumulative installations in India, largest in any country. In Tamil Nadu, Suzlon has 2,050 Mw of wind energy installation and has been present in the state for at least 15 years. Suzlon has its highest installations (over 2 Gw) in Tamil Nadu & Maharashtra.
What is the current debt and how much has it been reduced from FY15? To what level do you want to bring it down?
The first quarter of this financial year saw significant reduction in our debt and interest costs. Our consolidated net debt (excluding foreign currency convertible bonds or FCCBs) as on June 30 was Rs 7,010 crore, down from Rs 14,821 crore, quarter on quarter. As regards conversion of FCCBs into equity, $270 million have been converted.
Part of the cash will be utilised for debt reduction. No specific numbers at this point. We have planned the requirement in such a manner that there are no repayment obligations till March 2018. This will give room for the business to grow.
Our profitability and performance reflects the improvement in our operational efficiency by addressing our liquidity concerns through capital infusion and the Senvion sale, which has translated into sizable debt and interest cost reduction, accelerated our growth plans and increased stakeholder confidence. The equity infusion of Rs 1,800 crore by Dilip Shanghvi & Associates has further strengthened our balance sheet. Building on this momentum, we are now focused on executing our order book of 1,100 Mw and many orders in the pipeline for FY16.
Any new manufacturing facilities on the cards?
We aim to establish three rotor blade manufacturing units in Andhra Pradesh, Madhya Pradesh & Rajasthan in FY16, while looking at expansion in other states, too.
How is the renewable energy business scenario in India?
The sector offers immense potential. Beside strong fundamentals, the government’s thrust on clean energy is driven by the need for energy security and growth. With its ambitious target of 175 Gw, comprising 60 Gw of wind energy, the sector should see a quantum leap in market size and growth in the coming years.
The cost of energy has come down substantially. A lot of private equity-backed integrated power producers have entered the green energy sector with huge investments, making it more organised and enabling a level playing field for all original equipment manufacturers.
What are Suzlon’s plans?
With our experience of 14,500 Mw of wind energy installations in 17 countries, market leadership, technological prowess and others, Suzlon is best positioned to capitalise on the opportunities across the globe. We will focus on tapping the immense opportunities in the high-growth markets of India, USA, China, Brazil, South Africa, Turkey and Mexico.
The Union cabinet has approved a national offshore wind energy policy. How will it help the industry and how does Suzlon plan to utilise the opportunity?
I am confident this announcement will simplify and create a single-window system for relevant approvals from various departments and state maritime boards. One of the key advantages of offshore wind energy is that large-sized project of 1,000 Mw and above can be built, with capacity utilisation of 45-50 per cent. We foresee an offshore wind energy revolution in our country, given India’s very long coast line.
Suzlon has access to the most mature offshore wind energy technology. We're currently conducting a techno-commercial feasibility study in Gujarat, which has 1,600 km of coastline. Suzlon has already identified more than 1,000 Mw offshore wind energy potential in the Kutch coast. Offshore will open new avenues for Suzlon's growth.
What would be the role of solar in Suzlon's overall strategy? And, what is the Tamil Nadu project about?
This financial year will mark our foray into solar, with plans to offer wind-solar integrated solutions. Solar is very complementary with wind. Suzlon has strong capability in projects, services and best practices to leverage our capabilities in land, utility relations, private equity, projects and services.
Our intention is to add capacity of 2,000 Mw clean energy projects over the next five years across Tamil Nadu. These are expected to attract investments of Rs 15,500 crore from various investors, with a potential to create 1,800 direct jobs. The agreements express our interest to install 500 Mw of onshore wind energy, 500 Mw of offshore wind, and 1,000 Mw of solar and solar-wind hybrid.
How much Mw is currently operational for Suzlon, in India?
Suzlon has 8,600 Mw of cumulative installations in India, largest in any country. In Tamil Nadu, Suzlon has 2,050 Mw of wind energy installation and has been present in the state for at least 15 years. Suzlon has its highest installations (over 2 Gw) in Tamil Nadu & Maharashtra.
What is the current debt and how much has it been reduced from FY15? To what level do you want to bring it down?
The first quarter of this financial year saw significant reduction in our debt and interest costs. Our consolidated net debt (excluding foreign currency convertible bonds or FCCBs) as on June 30 was Rs 7,010 crore, down from Rs 14,821 crore, quarter on quarter. As regards conversion of FCCBs into equity, $270 million have been converted.
Part of the cash will be utilised for debt reduction. No specific numbers at this point. We have planned the requirement in such a manner that there are no repayment obligations till March 2018. This will give room for the business to grow.
Our profitability and performance reflects the improvement in our operational efficiency by addressing our liquidity concerns through capital infusion and the Senvion sale, which has translated into sizable debt and interest cost reduction, accelerated our growth plans and increased stakeholder confidence. The equity infusion of Rs 1,800 crore by Dilip Shanghvi & Associates has further strengthened our balance sheet. Building on this momentum, we are now focused on executing our order book of 1,100 Mw and many orders in the pipeline for FY16.
Any new manufacturing facilities on the cards?
We aim to establish three rotor blade manufacturing units in Andhra Pradesh, Madhya Pradesh & Rajasthan in FY16, while looking at expansion in other states, too.
