“International Initiatives Such As CBAM And Carbon Trading Will Support RE Adoption”, Akshay Hiranandani, Serentica Renewables

Highlights :

Established in 2022, Serentica Renewables (India) describes itself as a decarbonization platform that looks to provide round-the-clock clean energy solutions enabling the transition of large-scale, energy-intensive industries to clean energy. Serentica aims to provide assured renewable energy through a combination of solar, wind, energy storage and balancing solutions. Serentica’s medium term goal is to supply over 40 billion units of clean energy annually and displace 37 million tonnes of CO2 emissions. The company has already secured investments worth $650 million from leading global investor KKR. CEO Akshay Hiranandani has overseen solid progress on these targets, sewing up vital financing and supply deals during his tenure so far. In this interaction with SaurEnergy, he delves deeper into the firm’s experience and future plans. 

“International Initiatives Such As CBAM And Carbon Trading Will Support RE Adoption”, Akshay Hiranandani, Serentica Renewables Mr. Akshay Hiranandani, CEO Serentica Renewables

Has Serentica’s launch plan changed since its inception, or is it following the original plan to achieve the fastest renewable expansion? Can you provide the current status of the firm’s plans, including specific timelines for capacity additions?

Serentica remains committed to industrial decarbonization and providing 24/7 green power for hard-to-abate industries. Our current focus centers on installing 4,000 megawatts of wind and solar renewable energy, across multiple sites in the country. In the medium term, Serentica’s vision is to supply over 50 billion units of clean energy annually by 2028 thereby displacing 47 million tonnes of CO2 emissions. We expect this capacity to come up by mid calendar year 2025.

As a leading sustainable energy platform, our commitment extends beyond mere numbers, with ready-to-build project sites aggregating over 2.5 GW and the capability to deliver power within 12 months of contract closure. Additionally, our access to long-duration and short-duration chemical and pumped hydro storage ensures the satisfaction of any demand profile from our customers. We’re committed to our pursuit of a greener, more sustainable future.

With its deep engagement in industries where carbon abatement is tougher, what are your thoughts on net zero targets in sectors like steel, other metals, cement, and oil and gas? Are the current targets ambitious enough, or can more be done faster?

Some companies are actively pursuing carbon reduction targets, a positive trend. Though addressing this in vital industries was once deemed difficult and costly, the landscape has changed. Now, financial resources and technology support cleaner practices. Despite commendable progress, considering the current planetary crisis, we advocate for even more aggressive sustainability goals. Our focus on the C&I and energy-intensive sectors drives our efforts to help them achieve their goals.

The commercial and industrial sector in India uses a huge amount of power, about 750 billion units annually, we should encourage them more to replace most of these units with renewable energy. It’s not just about doing good – it’s good for business. The government is doing a great job in encouraging this trend by introducing policies such as transmission cost waiver and recently has announced the delicensing of customer side transmission buildout. On the demand side, international initiatives such as CBAM and carbon trading will encourage more companies to adopt RE. Fortunately, technologically, RE is seeing more efficiency and reduced cost.

Financing is marked as one of the most critical enablers for a faster energy transition. What is your view on the financing environment for the next 2-5 years, leading up to 2030? Will it improve, remain business as usual, or become tougher to raise funds?

Globally the focus on financing, especially climate financing, has heightened, with significant growth in private sector commitments to decarbonization targets. Instruments like green, blue, and sustainability-linked bonds have surged, witnessing a substantial mobilization of $57 billion at COP28, with expectations for more. Innovative financing mechanisms like debt-for-climate swaps are gaining traction. The business case for investing in adaptation and resilience against climate risks is evident, fostering global cooperation.

As for the financing environment in India, the next 2-5 years leading up to 2030, I expect positive momentum. In global climate financing we are witnessing similar behavior. REC, PFC, SBI are financing under construction RE projects. Post commissioning, the capital market in both domestic and foreign has seen deeper liquidity. However, platforms with clear visions and focused plans will likely find it easier to raise funds compared to others, given the competitive landscape in the decarbonization and net-zero space.

How can domestic policies impact financing challenges in India, and are there any financing innovations that could be launched?

While India has made notable progress on NDCs, urgent measures are still needed to transition away from fossil fuels which currently meet 74% of electricity demand, mostly from coal. Further investments into zero-carbon renewables must continue and intensify. Additionally, India should swiftly retire existing high-carbon coal capacity and replace it with clean alternatives. A timeline for coal phase-out should be charted.

Along with encouraging renewable power investments, increased funding needs to flow into modernizing vital enabling infrastructure – transmission networks, grid balancing technology, energy storage solutions and smart grids. These will help integrate higher share of renewables into the electricity system. Emerging green technologies like green hydrogen should also receive focused backing through dedicated funding programs that employ financial engineering tools – blended finance, credit enhancements and guarantees – to share risks and attract private capital.

Establishing clear targets for various user segments, such as manufacturing, rooftop solar, solar agricultural pumps, and renewable energy companies, is essential to drive the widespread adoption of energy-efficient technology and clean power. Tailored targets that include new infrastructure and retrofits of existing assets across India’s key sectors can accelerate the transition. Therefore, India’s focus should not only be on reinforcing its achievements in renewable energy but also on coal phase-out, supporting critical infrastructure, backing green technologies, and implementing adoption targets across industries to successfully complete its shift to clean power.

What are the current economics of RTC renewable power compared to three years ago? Where do you see it by 2025 and beyond? How significant a role can it play in speeding up or slowing down India’s green energy goals?

Over the past three years, the renewable energy market in India has undergone a significant transformation, particularly concerning Round the Clock (RTC) projects.

The latest RTC tenders have the potential to replace firm, dispatchable capacities such as thermal plants for Discoms, contributing significantly to India’s green targets. RTC renewables offer consumers the prospect of fixed-rate power pricing for extended periods, devoid of the volatility associated with coal pricing fluctuations. Additionally, with support from the central government and state authorities, numerous pumped hydro storage projects are in the planning stages across India. Along with global declines in battery storage costs, these developments will help in achieving true round the clock renewable energy. Given these factors, RTC renewable project demands are expected to heighten not just from Discoms but also commercial and industrial consumers with sustainability commitments. Renewables coupled with storage may increasingly displace conventional firm capacity additions.

As per the recent CRISIL report, the outlook for RTC renewable energy in India, is optimistic that RTC will grow from virtually 0% today to represent over 5% of the total renewable capacity by 2025. A key driver is continued price declines for vital storage solutions like lithium-ion batteries, which have already reduced to about Rs15,000-16,667/kWh now from Rs 20,833/ kWh 5 years ago. With battery prices likely to reach around Rs12,500/kWh over the next two years, RTC tariffs can potentially dip by 10-12%.

Round-the-clock renewables are critical for India to achieve its 500GW renewable energy target by 2030. As storage drives RTC cost declines, reliable 24×7 renewable power can scale affordably. This would accelerate sustainability, enabling faster wind and solar buildout while maintaining grid reliability. Maturating RTC tech and economics can thus, supercharge India’s green transition.

What storage technologies are you optimistic about, and is there any technology that could prove to be a dark horse in the field?

The demand for energy storage varies significantly depending on the application and usage. Both utilities and consumers stand to benefit substantially by adopting tailored portfolios of storage solutions that align with specific requirements. On grid-scale deployments, India’s central government has adopted a technology-neutral stance, facilitating the procurement of different storage types through tenders. Several tenders for large storage projects have already been awarded or announced. Additionally, India holds tremendous potential for pumped hydro storage owing to ideal geography and natural resources. Current policy measures are also promoting pumped hydro development making it an attractive prospect.

At Serentica, we are actively assessing all promising technologies for a given customer’s needs – from lithium-ion batteries behind the meter to grid-scale pumped hydro plants to longer duration solutions like compressed air and gravity storage. However, it is also vital to note that alongside storage, cross-border electricity trade and transmission links enabling wider connectivity will greatly aid variable renewable integration across geographies. Thus, power ties must be strengthened in tandem to unlock the full potential of both storage and renewables for sustainable energy transition.

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