Tata powers up wind energy market with mega order; seeks bids for supply of turbines with capacity of 3 GW

Renewable energy company Tata Power is seeking bids for the supply of wind turbines with a capacity of over 3 gigawatts (GW) to be installed at its wind-solar hybrid renewable energy facilities across the country over the next three to five years, said people aware of the development. The value could exceed ₹21,000 crore and is among the largest wind turbine orders ever, the people said. Currently, the cost of setting up 1MW of wind energy is around ₹7 crore.

“Four large original equipment manufacturers for wind turbines, including Siemens Gamesa, Senvion India, Envision Energy and Suzlon Energy, are in the race to bid and supply the turbines to Tata Power,” one of the persons said.

The bids will be broken into multiple contracts, sources said, adding that the final requirement could be nearly 5GW over five years, adding up to a contract value of ₹35,000 crore. Tata Power plans to invest about $9 billion to expand renewable energy capacity in the next five to six years.

Tata Power and Siemens Gamesa declined to comment. Senvion India and Suzlon Energy did not reply to queries. Envision Energy could not be reached for comment.

Green Plans

“Tata Power is targeting to set up over 1GW of wind capacity a year and they have sought bids for long-term supply of wind turbines,” said another industry official, adding that there's no deadline on the bid. These will also be installed at renewable energy facilities for group companies like Tata Steel, etc.

This fiscal year Tata Power is planning to spend ₹20,000 crore on capex, half of which will go toward renewable energy and the rest on distribution, transmission and coal-based plants.

Part of the salt-to-software Tata Group, Tata Power has decided to achieve 100% clean power generation by FY45. Currently, it has a renewable energy capacity of 10.5 GW with 5.7 GW of projects at various stages of implementation. Its operational capacity has reached 4.8 GW, comprising 3.8GW of solar and 1GW of wind energy projects. It plans to reach 20 GW capacity by 2030.

It’s setting up a 966 MW solar-wind hybrid plant to deliver round-the-clock renewable power to Tata Steel. Additionally, it has signed an agreement with state-owned SJVN Ltd to set up a 1.3 GW firm and dispatchable renewable energy project, the company said in its annual report for FY24.

The company also operates over 8.8 GW of thermal power generation but has decided not to expand in this segment. “Tata Power has a well-planned strategy to shift towards clean energy and targets for two-fold rise in its profit after tax by FY27 over FY23,” said Sharekhan by BNP Paribas in a September 26 research report.

In India, while solar power additions are in full swing, the government’s focus is also on boosting wind power capacity addition, aiming for 25 GW by 2028. Between 2020 till the first half of 2024, India added 9GW capacity.

According to an October 3 Fitch Ratings report, India has seen a jump in new project auctions to about 70GW in the fiscal year ended March. This should boost renewable energy projects in the next two to three years.

“This is more than triple the 20 GW auctioned in FY23. Solar contributed 48% of the auctioned capacity, wind 9%, and wind-solar hybrids 20%, with the remainder firm and dispatchable renewable energy and hybrid with storage,” said Fitch, adding that it expects the economy, including stable interest rates, and lower equipment prices to remain supportive of the capacity additions in the next two-three years.

Tata Power’s move to seek bids for 3 GW will be welcomed as the demand for standalone wind project tenders in India has been relatively weak over the last three to four years.