We plan to be a 30 GW company by 2030: Vineet Mittal

Avaada Group, which last month signed an MoU with the Rajasthan government to set up a green hydrogen and ammonia plant for Rs 40,000 crore is planning to begin work on the project as early as next year. Avada Group chairperson Vineet Mittal tells ET the company is at the cusp of an exponential growth coming in from the global as well as domestic demand for green hydrogen, and sustainability fuels. Edited excerpts:

Have you revised your targets for the future?
Yes. We are looking to be a 30 GW of installed renewable energy capacity company by 2030. We have 10GW plus power purchase agreements in place. We have multiple projects which we are developing currently, for our own ammonia business plus for different commercial and industrial (C&I) customers, as well as provincial and federal governments. As of today, over 25% of our business is in the C & I segment where we work with a lot of marquee clients. However, our business plan will keep revising if we have good quality customers who are willing to give us commercially viable power purchase agreements. We are also in the process of setting up a 5GW cell-to-module factory that we intend to commission fully by 2024.

You plan to set up a green ammonia facility in Kota, Rajasthan. Any update on that?

Our detailed project report is ready. Our feed (Front End Engineering Design) will be ready by November and we are expecting to call for EPC (engineering, procurement and construction) tenders by December this year. We believe we are at the cusp. So far we were growing at some pace, which was satisfactory to us, but now, we will be able to see the exponential growth coming in this sector primarily to do with huge demand worldwide as well as in domestic market for green hydrogen, methanol, sustainability and aviation fuel, which are all market segments, where we want to become a large enough player.

How will you finance the project?
We are yet to achieve financial closure for the project. Currently, across our projects, we have a commitment of Rs 50,000 crore. For the ammonia project, we would look at financial closure after the detailed feed document and EPC tender. Currently I am not authorised to discuss the financing details of the project but we are moving at a good pace.

Many new players are entering the wind turbine manufacturing segment. Are you looking at it too?
No. But I've never seen so much excitement to invest into this sector. We believe wind has tremendous potential for India. The reason it could not be developed as significantly as solar, is because of several challenges including its dependance on metal prices. Also the tariffs which were offered by governments were literally unviable in the past two years, but now, the government has corrected its bidding methodology and has come to the single stage bidding against the reverse auction. So, I see huge demand coming up for the wind and the price correction will also happen in line with the commodity price. Also, the government is coming out with a policy of viability gap funding as they have done some industry consultation. So, this would be very interesting and make it more attractive for the hydrogen and green ammonia sector also. I think if India has to grow towards the net zero target, solar wind, offshore wind and pumped hydro and storage, all five will have to work together.

How do you see the solar module manufacturing segment shaping up specially with Adani and Reliance Industries announcing their giga factories for the same?
I think there is a huge opportunity and the cake is really very big. It is so big that whoever brings in the capacity, the global market has the ability to absorb it. Due to supply chain disruption after 2020, people have trust in any single country as a best source for the cheapest solar panel and wind machines. So every country is building some capacity in their own country and I think the market is big and interest from various entrepreneurs is even bigger. Already in the last eight-nine months, India has added almost 10 gigawatts of capacity in manufacturing. And I see in the next two to three years at least 30,000 megawatt of more capacity coming on stream.

The rooftop solar segment has not picked up as desired. How has it performed for you?
We ourselves have a mandate internally to do some percentage of roof top. But there are some fundamental flaws in the power sector structure, which needs to be addressed if you want rooftop to pick up. The challenge is that the tendering agencies don't do estimation correctly. Plus states are reluctant to do net metering. So this again, goes back to the basic topic of power being on the concurrent list.

So you think electricity should not be on the concurrent list?
As long as power is on the concurrent list, almost two-thirds of utilities are not rated appropriately because they don't get paid on time by various government departments. So I think someday the government will have to take up the sector like the telecom sector and reform it or let it be totally privatized. I have been advocating that NTPC be made a national utility, if you're finding it difficult to privatize discoms. Let loss making discoms be acquired by NTPC and the states which have delayed payments for months should be the first ones to give their discoms to NTPC. I personally believe that when the country is looking to cut emissions, the power sector centre should take charge of the power sector and power should be under a GST-like structure with a power council in place which will define the policies.

But the states are not happy with the idea of taking electricity off the concurrent list.
I think there is some myth around the fact that state governments are not aligned with the larger goal of making electricity sector robust again. If you ask most of the Chief Ministers and power ministers of state, they realize that it is time to fix the bleeding energy sector. They don't want their units to be loss making. If their utilities perform better, the chances of them getting elected are higher.