The Indian government is working towards realising the goal of 175 GW of renewable energy by 2022, but it has its forecast ready for 2027 too. In a blueprint that was made for the 10-year energy requirement last year, it was specified that by 2027, the country will fulfil 57% of its total electricity capacity from non-fossil or renewable fuel sources.
The government is working diligently towards realising these goals and Singapore-based Sembcorp Industries won the bid when the government invited various companies for national wind power auction. This project that is 250 MW in capacity will be located in the state of Tamil Nadu. It will help Sembcorp to strengthen its market share in the Indian power market. With this new project in its kitty, the total power capacity that is both operational and under development stands at 3,800 Megawatts for the company in India. It includes both the thermal and renewable energy assets.
The managing director and chief executive of Sembcorp Green Infra, Sunil Gupta, said, “The company is pleased with the successful bid and plans to work closely with suppliers and contractors to deliver the project successfully.”
The entire output from this project will be sold to Power Trading Corporation for which Sembcorp has done a 25-year long-term power purchase agreement with it. Thus, the company will not only develop this project, but also operate it after completion. The total cost of the project is expected to come around 19 billion in Indian currency and this will be met by internal funding as well as by taking debts. The project will be completed in phases with the final commissioning happening in the second half of financial year ending on March 31, 2019.
The brokerage firm CIMB said, “SCI is working closely with the equipment supplier to maximise utilisation of the assets. The key to ensuring higher returns is for the project to be stationed at high-wind areas. Wind power is dominant in Tamil Nadu, with above 30% share in overall wind capacity installed in India.”
It further predicted that with this project in place the net profit of SGI will increase by $3m-4m. In FY16, the company had the operating capacity of 788 MW and it succeeded in adding $13m of net profit. Thus, with the total operating capacity moving to 970MW by the end of 2017, the net profit is expected to increase by another $6m to $19m.