Tata Power, already among the largest renewable energy players, is stepping up its investments in this space, picking up a 40 per cent stake in a hydro power project in Bhutan, while also keen to explore opportunities to develop small modular nuclear reactors.
In the Union Budget last month, Finance Minister Nirmala Sitharaman had announced that nuclear energy was likely to form a very significant part of the energy mix for a developed India and towards that pursuit, the government would partner with private sector for setting up Bharat small reactors and research and development of newer technologies for nuclear energy.
"The government's announcement is that they will be coming with the policy, which will support public-private-partnership. That means, there would be a government entity along with the private sector who can develop these small modular reactors, which I am told are typically of 200-300 MW capacity. We are trying to work out the technical details and what type of opportunity will be there, once we get more details. From our side, we will definitely examine the opportunity, to seize the opportunity, so we can add to our clean energy capacity," said Praveer Sinha, CEO and MD of Tata Power.
The company has an installed capacity of 6.1 GW of clean energy as of the June quarter and another 5.3 GW is under execution.
Tata Power has now partnered with Druk Green Power Corporation Ltd to develop 600 MW Khorlochhu hydro power project in Bhutan with 40 per cent equity investment. The estimated project cost is Rs 6,900 crore. The company will be paying around Rs 830 crore for the 40 per cent stake in Khorlochhu Hydro Power Ltd.
"This project will be set up over five years and it has obtained all the approvals. We should be in a position to start work in the later part of this year. Part of the power that will be produced will be used in Bhutan only and part of it will be sold in India," Sinha said explaining the contours of the project.
This will be Tata Power's second hydro project in Bhutan. The company already has 126 MW Dagachhu hydro project in the Himalayan kingdom. Unit one of that project was commissioned back in 2015. The Khorlochhu project will give it a larger footprint in Bhutan, noted Sinha.
Tata Power aims to increase its clean and green energy portfolio to over 11 GW, accounting for 56 per cent of the total capacity in the next 12-24 months. The company has earlier announced that by 2030, two-thirds of its capacity will be renewable and Sinha said that the company was on the way to that.
Tata Power on Tuesday reported a consolidated net profit of Rs 1,189 crore in the April-June quarter, up 4 per cent from a year ago profit of Rs 1,141 crore. Barring exceptional gains in the year ago quarter, the company's profit in the first quarter was up 31 per cent.
Revenue from operations for the quarter rose nearly 14 per cent to Rs 17,294 crore, from Rs 15,213 crore.
Tata Power incurred capital expenditure of Rs 4,000 crore in the June quarter and plans to invest Rs 20,000 crore this financial year. In the next 2-3 years, it will be looking at similar investments of around Rs 20,000-25,000 crore, said Sinha.
While, the company is boosting its renewable energy capacity, in thermal energy, it will keep on examining from time to time opportunities more from an "energy security perspective" and depending on what sort of returns it offered, Sinha noted.
At the same time, Tata Power continues to look for opportunities to strengthen its power transmission footprint. It won a 384 CKm (circuit kilometers) Paradeep-Angul 765 kV sub-station bid worth Rs 2,300 crore, taking the total transmission pipeline to over 2,000 CKm. Sinha said the company is confident it will be able to complete the project in 24 months.
"We continue to regularly bid and any good project where we are able to identify opportunities, we would be doing that. This (transmission) is an area of growth as is our renewable business and we will continue to focus on them," he added.