Indian Corporates Are Poised for a Leap in Renewable Transition Trajectory

Favorable regulations and better risk management are vital to address rising demand for green energy


The industrial sector continues to be one of the most significant contributors to India’s renewable energy transition journey, driven by a host of factors, including lower cost of power, ESG goals, increasing demand for green supply chains, and net-zero targets.

At the Mercom India Renewables Summit 2023,’ an exclusive event on April 26-27 in New Delhi, industry experts gathered to discuss critical issues, opportunities, and emerging trends related to the use of renewables by industries.

The ‘Corporates and Industries Leading Decarbonization and Renewables Adoption’ session on Day 1 dealt with ways to accelerate clean energy adoption and the business models for making green energy adoption financially attractive.

The panel featured Ravi Seth, AVP – Business Development at Indian Energy Exchange; Ashish Agarwal, Head Solar, BluPine Energy; Raghunath T, Vice President & Head Credit at Vivriti Asset Management; and Akhil Agarwal, Director-Renewable Energy & Power Management at ST Telemedia Global Data Centres.

Priya Sanjay, Managing Director at Mercom India, moderated the session.

The Rising Demand

Progressive regulatory changes over the past few years have brought down the cost of renewable energy and compliance, paving the way for the rapid adoption of renewable power among corporates.

“The regulatory framework and other factors are helping meet the rising demand in the C&I segment. We have seen a rise in demand followed by investments in many power-sensitive sectors. For example, the Tamil Nadu textile industry was responsible for driving the renewable transition. For hard-to-abate sectors and large-scale power consumers like steel, the transactions of that size haven’t happened yet, but we do expect those also to follow soon.”

Seth noted there has been a considerable rise in the number of voluntary consumers now at the power exchange seeking green power to help meet their net zero and carbon emission goals.

He said, “At the exchange, we all these consumers with multiple options to optimize their power costs and meet their net-zero targets. The ESCert and REC mechanisms have also attracted many consumers. Many large corporates are not only looking to meet their RPO targets but also to meet their sustainability targets.”

Akhil Agarwal said his company has ramped up its renewable share of the power mix to 36% of the total demand, up from 20% when the transition started.

“We have tied up for 100-150 MU annually and aim to be carbon neutral by 2030. We are looking to shift to round-the-clock renewable energy soon, too, with the help of energy storage, but that transition can be expected only after 2025 when we feel storage might become more affordable,” he added.

Raghunath said his company focuses on all renewables segments, from open access to rooftop.

“The C&I renewable ecosystem should not depend on offshore capital, which will help the sector grow. The government has also introduced the green bonds mechanism to help the corporates meet their net zero goals.”

Steps in the Right Direction

Ashish Agarwal felt it is very important that the renewable transition of the C&I segment especially must make business sense for everybody, which includes the DISCOMs, consumers, and renewable energy generators.

“Consumers often opt for group captive if they can afford the upfront capital, fearing the cross-subsidy charges might shoot up their bills. But it is important to know that in most states, switching to renewables will still make business sense even with the cross-subsidy charges,” he added.

Seth said introducing green open access rules has been the biggest step in the right direction, making it easy for consumers, even with a low power demand to switch to open access.

“We are seeing a rise in merchant capacities, which depend on the demand and prices. Major developers are now able to sell excess power at exchanges at higher prices as the demand continues to be there. We are also helping build more capacities with developers and lenders together to help accelerate growth. At the exchange, we have introduced multiple platforms like GDAM, GTAM, and now HP-DAM to encourage power trading.”

Akhil Agarwal noted the waiver of ISTS charges and the introduction of the green energy open access rules has helped boost the installations over time as that has helped manage the contract load limit challenges and also got more consumers with low power demand on board for open access.

Raghunath felt people are now aware of the various risks involved and have started analyzing them beforehand. “It is important to have full visibility of the power purchase agreements for the projects. Other than just profit, it is important to look at faster returns from a developer’s perspective. If you sign a 25-year PPA with a bigger company, your finances are sorted, but with an MSE, there are doubts if the business would even exist a few years down the line. These risk factors are now being analyzed and managed to avoid risking the entire investment.”