Better policies needed to tap wind potential in nine states: Tulsi Tanti

Tulsi Tanti, chairman and managing director of Suzlon.
Suzlon completed a fresh round of restructuring for its debt in July, which allows the company a huge interest breather. Tulsi Tanti, chairman and managing director for the company, speaks to Jyoti Mukul and Amritha Pillay, on the road ahead, Covid challenges and how India’s wind energy potential can be tapped. Excerpts

What have been the main Covid related challenges for the company?

We are fortunate the debt restructuring process is now complete. More than 70 per cent of interest burden has been reduced. The three areas of focus were - one to restart activity smoothly, second focus is on continuing the service business well, we have not seen any shutdown of assets even during the lockdown. The third is to start production, which has been catching up since July. We are not much worried on the financial commitment side, it is now a very well sustainable model, with Covid how do we grow is what we have to determine. Of the 14 plants for which we had orders, we have started manufacturing four during the Covid-19 phase and we will start supply.

Have there been any job cuts at Suzlon?

We have executed salary cuts at the senior management level. We have brought a 30 to 40 per cent reduction at the senior level staff cost. The team has been very supportive.

What are the challenges due to Covid for the sector?

Execution is an important challenge in the Covid scenario. We cannot deliver full capacity, with healthy safety and other concerns. Utility payments is another issue, as revenue has reduced for utilities, while fixed costs remain same for them. This creates payment backlogs for our customers though customers are paying us on time but it is not easy for them to invest further in projects soon as there is a liquidity concern in the sector due to COVID. We expect this to continue for some months, but starting January, the momentum will pick up.

India's wind capacity additions have been falling for the last few years. Do you expect it to change?

Suzlon was not in the market for the last two years, We will be back this year but more strongly in 2021. Industry was also in a transition phase, investors are now becoming more responsible bidding wise and the bidding regime is maturing but FY21 forecast due to Covid will be difficult. Assuming Covid impact will not remain in the next FY, India should go back to 3000 MW addition annually and higher.

What is the policy push required for the sector?

The government has given a very high priority to Atmanirbhar Bharat; the whole world is looking at renewables on priority, which is a new opportunity that has emerged very well. All the manufacturing units coming up in India, still face a higher interest cost burden. A 2 per cent interest subvention for solar and wind will be helpful. We are also requesting for a reduction in interest cost at the project level. 

The current bidding process gives priority to price, which means the bids go to the high wind states- Tamil Nadu and Gujarat, when India has nine windy states, the rest are not getting the opportunity because they have lower wind sites. The All India bid model should be changed to state-specific, where prices can be different and bundle it together at the central level and then sell at an average price. 

A captive policy for wheeling and banking for each state will allow better opportunities for MSME manufacturers and states to unlock their wind sites. Policies around GST is also needed, where we have not been able to pass on the GST cost to our clients.

What kind of hybrid tenders do you expect from the government?

There should be wind-solar-gas or wind-solar-hydro hybrid tenders and we need to move to renewable-battery storage hybrid tenders. We need to set up manufacturing facilities for storage in India.

Would you be interested in branching out to battery storage manufacturing?

We can put up storage also if our clients want but at the moment we are not thinking of any manufacturing in that space. We want to concentrate on wind equipment manufacturing and feeding the domestic and export markets. We can offer power plant solutions with wind-solar-battery hybrid systems if needed.

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