Welspun Energy to set up solar parks

Katya B Naidu | Mumbai July 09, 2013

Welspun group's energy business is extending its clean energy focus beyond power generation. It has plans to set up solar parks across four states.

The company has already started work on a 100 megawatt solar park in Rajasthan, for which it is currently acquiring land. It would need around 500 acres for the park for which they are looking for land in Rajasthan. The average investment in a park would be around Rs 100 crore for land development and evacuation infrastructure like setting up sub-stations. It is also looking around for investors into the parks.

"We are currently in talks with people who would want to set-up solar capacity in the parks. It would be a one-stop shop where we will set up, generate, and evacuate power, along with operation and maintenance of the park," said Vineet Mittal, managing director of Welspun Energy.

Mittal hopes that they could see demand from various areas like global investors as well as power procurers like IT parks, hotels, malls and other. He forsees such demand in Maharashtra where power sold by utilities to such commercial establishments is very high. Hence, they are also planning to set up their second solar park in the state in the next 24 months.

While he is tight-lipped on the other states, Mittal believes that power starved states like Andhra Pradesh, Karnataka and Tamil Nadu could have potential locations. "Industrial demand would is picking up in Madhya Pradesh as well," he said.

The company already provides engineering, procurement and construction (EPC) services to those who wish to set-up solar capacity. Their solar EPC orderbook is around Rs 1,500 crore.

Apart from services, Welspun has its own generating capacity of 111 megawatts across solar and wind energy. Its long-term plan is to take it to 1,700 megawatts by 2015-16. By the end of the current financial year, they plan to set-up over 400 megawatts. In the next six months, the company is expected to raise Rs 1,500 crore in debt for four projects accounting to 220 megawatts, across solar and wind.

Welspun, which is already generating cash from its projects, will rely only on internal funding for its equity requirements. "We will put in all the money we earn, back into the business for the next five years," said Mittal.

Mittal expects the costs of clean energy and conventional power sources, will homogenise by around 2016. The stage for it has already been set, after the government decided to double the prices of natural gas.

"Costs of coal-generated power too will continue to increase with the size of imports and it could even be indexed to international prices like oil. In solar and wind, costs are frozen with a predictable operation and maintenance costs," he said.