New Delhi: Spain’s Zelestra plans to invest $5 billion in India to build 10 GW of wind and solar power capacity by the end of the decade, a top executive said, doubling its earlier target of achieving 5 GW by 2026. The company, backed by private equity firm EQT, may also enter India’s lucrative commercial and industrial sector as part of the expanded plan, Chief Executive Officer Leo Moreno said in an interview.
Typically, renewable energy projects generate 30% equity and 70% project financing, but given EQT’s strong backing, Zelestra won’t need to raise external capital, Moreno said. “We put in our own capital to do all the development, and we invest our own capital when we build the projects. So that creates an advantage for us in terms of the cycle and how much we can spend up front to build,” he said.
Zelestra will aim to achieve a balanced mix of solar and wind projects in India over the long term, Moreno said. If solar and wind are combined, the installed cost of these projects would be $550,000 per megawatt.
The company is dreaming big for India at a time when the country is aiming to achieve 500 GW renewable energy capacity by 2030. The green transition is also aided by several schemes and regulations such as green open access norms, schemes for solar parks and rooftop solar, and production-linked incentive schemes for solar modules and viability gap financing for battery energy storage systems.
Moreno said that projects of 5 GW capacity are already in the pipeline. This includes an operational capacity of 140 MW and another 450 MW under construction in Rajasthan, while power purchase agreements (PPAs) for another 450 MW have been signed and construction of that capacity will begin soon. Recently, it signed a 25-year PPA for the 450 MW solar project in Rajasthan with NTPC.
Building battery power
Zelestra is also said to be considering building battery energy storage facilities for its customers. Globally, its battery project portfolio is around 4 GW and construction is expected to begin soon.
“What we are seeing is that in the future, most of our new projects will have batteries connected, because it is much better to have a 16-hour supply. In the future, I would say that a very high percentage may be 80%, while in historical projects it may represent 15% of the total,” he said.
Energy storage in the form of grid-scale batteries or pumped hydro projects is critical for renewable energy, which is intermittent due to changing patterns of wind and sunlight. Several Indian companies, including Tata Power, Adani Group, Reliance Industries and JSW Energy, are already planning such storage projects.
Zelestra, which operates in countries including the US, Germany, Colombia, Chile and Peru, believes India’s renewable energy market has potential. “We are talking about reaching 10 GW by 2030. And (India) is a market that can support this kind of ambitious and bold growth and the combination of multiple technologies. We have already signed power purchase agreements on a winning combination of wind, solar and storage. So it really represents the company’s strategy.”
Zelestra is not alone in seizing the Indian opportunity. Some of the leading global clean energy companies and investors currently operating in India include Sembcorp, Gentari, Brookfield Renewables, BlackRock and Mubadala.
Global growth in focus
Moreno stressed that at a global level, Zelestra plans to increase its installed capacity to 45GW by 2026, with countries such as India and the United States playing a key role. He said that in addition to India and the United States, it will focus on Latin America, Southern Europe and Germany.
Speaking about global regulatory concerns about diversifying the solar module supply chain to limit China’s dominance, he said such measures may have a short-term impact but would be beneficial in the long run.
Moreno said India has passed certain laws to support the domestic solar industry, at a time when Chinese companies control 95% of the world’s wafer manufacturing capacity. The US had also done the same as India, he said, adding that the supply chain will normalise as local entities build capacity over time. Such measures are a path to more security of supply, Moreno said, calling it “a period of instability leading to a future of greater prosperity.”
The combination of huge demand, government objectives, ease and speed of growth and investor appetite make India an attractive place to invest, Moreno said. “International investors today have a fairly positive view of India and expect future market stability. That’s why it’s attractive,” he said.
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