Round-the-clock renewables: a pioneering ‘always on’ power generation in India

As India forges ahead with decarbonisation, it faces a challenge: the rapid addition of renewables capacity – with over 100 Gigawatts (GW) already installed – has the potential to make its electricity grid less stable due to the inherent intermittency of all that solar and wind power. 

The solution is to couple renewables with affordable energy storage in order to provide uninterrupted supplies of electricity and reduce the country’s reliance on coal and other fossil fuels.

It is against this background that ReNew is putting together the first project in India that will do exactly this: combine renewables and storage to produce continuous power and solve the problem of intermittency. Societe Generale is one of the mandated lead arrangers on this deal.

ReNew is the country’s largest pure-play renewable energy company, with more than 13 GW of commissioned and committed capacity across 120 wind, solar and hydro facilities, putting it into the top 10 globally. It was founded in 2011 by Sumant Sinha, who has worked in finance, for some of India’s largest conglomerates and in the wind industry.

With a vertically integrated business model, long-term contracts that guarantee stable cash flows and an impressive shareholder list, including CPPIB, Goldman Sachs, Japan’s JERA and the Abu Dhabi Investment Authority, ReNew has scaled up rapidly over the past decade, allowing it to take on ever larger projects.

This ‘round-the-clock’ (RTC) project certainly fits the bill. It will cost $1.2 billion to build 900 Megawatts (MW) of wind capacity, 400 MW of solar and a battery facility capable of storing 100 MW hours of electricity. The assets are spread across three states, with the more than 250 wind turbines in Maharashtra and Karnataka in the south and the solar farm (and co-located battery storage) in sunny Rajasthan. By combining their output, ReNew will be able to guarantee the provision of 400 MW of electricity whether it is day or night.

And that is the key. Customers, in this case the central-government owned Solar Energy Corporation of India (SECI), which is taking all of the output under a long-term Power Purchasing Agreement (PPA), demand stable and reliable baseload power. Traditional renewables simply cannot promise this, since solar farms typically produce energy only 20-25% of the time while wind turbines turn 30-35% of the year, but less predictably.

Hence the idea of combining them. The solar panels obviously only work during the day, while wind speeds vary but are generally higher at night. The battery facility is a back-up, but one that can be charged in just four hours in the Rajasthani desert. It adds to the cost of the project but should allow ReNew to meet the RTC requirements that the customer has imposed via the PPA.

“By combining wind and solar generation with battery storage, this ‘round-the-clock’ project turns intermittent renewable energy into dispatchable baseload power for the electricity grid. This new model plus the size of the project make it a game changer for India as it works toward achieving its ambitious net zero goals and Societe Generale was a crucial support in leading the financing package,” says Kailash Vaswani, President Corporate Finance, ReNew. 

India has the land, wind and irradiation to allow such a large and ambitious project to be conceived and constructed. It also has relatively sophisticated inter- and intra-state grid transmission infrastructure, allowing SECI to resell the electricity to state grid companies across the country. And while the RTC project’s output will command a premium to standard renewable electricity, electricity distribution companies are willing to pay more to receive ‘green’ electrons on a guaranteed basis.

Another noteworthy aspect of this historic project is how quickly it has come together. From conception in late 2021, it achieved its financial close before the end of 2022 and is expected to generate its first electricity in 2024. The Societe Generale team, based in both Singapore and India, has been involved almost from the start. It has both engaged the management at ReNew, bringing to bear its experience from dozens of renewables deals both in India and globally; it contributed its understanding of the battery storage element, which was new for Indian renewable financing market; and it is part of the lending consortium. 

“We have the experience and expertise to support both international clients and local champions. We understand the technology and leverage our global experience with advising and lending on complex and trend setting projects”, says Sophea Seng, Head of Energy Finance & Advisory for South-East Asia.