PTC India looking to exit wind power business

PTC India may sell majority stake and transfer full ownership on its wind power business. Photo: Mint

New Delhi: The country’s largest electricity trader, PTC India Ltd, is exploring the possibility of exiting its wind power business and is scouting for investors for this, said two people aware of the development. This comes against the backdrop of India’s renewable energy tariffs hitting a record low. The country’s wind power tariffs plummeted to ₹ 2.43 per kilowatt-hour (kWh) at an auction conducted by state-run Gujarat Urja Vikas Nigam Ltd last December.

PTC India’s subsidiary, PTC Energy Ltd, has around 290 megawatts of wind assets across Madhya Pradesh, Karnataka and Andhra Pradesh.

“PTC India Ltd is considering various options for funding growth of its subsidiary PTC Energy Ltd through getting a suitable strategic investor on board. There is no deal that is under discussion in this regard,” the company said in response to Mint’s queries.

India’s wind sector has transitioned from a feed-in tariff regime, which ensures a fixed price for wind power producers, to tariff-based competitive auctions. In such a scenario, obtaining finance at the lowest cost has become key.

“There has been a change in the environment with the sector moving from feed-in tariffs regime. PTC doesn’t want to put further money in the asset generation business. It is now looking for investors and is also ready to sell a majority stake and transfer full ownership. PTC is waiting for the responses to come,” said one of the two persons mentioned above requesting anonymity.

“The idea is to either find an investor to scale-up or exit the business,” said the other person aware of the development who also did not want to be named.

The problems faced by the Indian wind energy industry include removing squatters from good wind potential sites, inordinate delays in signing of power purchase agreements, timely payments and distribution firms shying away from procuring electricity generated through wind energy.

Proper scheduling and forecasting of wind energy and availability of transmission facilities are also areas of concern.

There is a growing consolidation in India’s emerging green economy.

The renewable energy deals in the works, as reported by Mint, include Fotowatio Renewable Ventures, which plans to exit its only investment in the Indian solar power space, and Edelweiss Infrastructure Yield Plus Fund, which is in talks with Engie SA to pick up a significant stake in the French energy firm’s Indian solar business.

Besides, Ayana Renewable Power, a renewable energy firm operating in India and neighbouring countries, is scouting for acquisitions here.

India, which is the third-largest energy consumer after the US and China, plans to achieve 175 gigawatts (GW) of renewable energy capacity by 2022 as part of its climate commitments, wherein it has promised to achieve 40% of its electricity generation capacity from non-fossil fuel based energy resources by 2030.

This includes 60GW from wind power, 100GW from solar power, 10GW from biomass and 5GW from small hydro projects.

India also has a long-term target of adding 30GW of offshore wind energy projects by 2030 by harnessing the enormous wind power potential along its 7,600km coastline.