We Are Becoming a Solutions Company, But Will Remain Wind-First: Girish Tanti, Co-founder, Suzlon

The simple answer is my customers. Market demand is pushing us towards a solution-oriented approach.

Today, the biggest challenge with any renewable energy source is the firmness of power. With current technology, a combination of wind, solar and storage can deliver firm power. In fact, we recently participated in a bid that mimicked thermal generation, and the prices discovered effectively demonstrate that we now have the ability to provide firm power equivalent to fossil-fuel sources, with a similar load profile.

Wind has a natural advantage, and with batteries becoming more cost-efficient, the combination of wind, solar and storage is going to be the way forward. If you look at recent bids, most are some form of hybrid, RTC or extended RTC offering. The market has clearly moved beyond relying on a single renewable source.

You still see a significant number of pure-wind bids because wind is on a catch-up journey in terms of its contribution. Its uniqueness is that it can support peak demand, which solar cannot do. Wind is able to generate during the morning and evening peaks, while solar produces energy during the day at a more competitive price point.

When wind and solar are combined, they become complementary and can generate a least-cost solution.

From the customer's perspective, in terms of affordability, reliability and firmness of power, the combination of wind, solar and storage is the future. The timing couldn't be better for us to move into this space and become a solutions company, although it will remain wind-first.

We are looking at an asset-light model for non-wind areas. In solar, we don't intend to get into full-fledged manufacturing.

The idea is to work with partners that already have a strong manufacturing base. There is more than enough solar manufacturing capacity in the country, so we want to leverage that capacity and focus more on solutioning for customers.

Our objective is to integrate wind, solar and storage into a single solution and deliver value to the customer.

As far as BESS is concerned, there is an important technology opportunity. Today, relatively standardised BESS solutions are being planned, whereas we believe there is an opportunity to develop tailor-made solutions for specific use cases that can deliver greater value to customers.

It is therefore important to design the battery storage system correctly at the plant level. There is a significant technology opportunity in battery storage.

There is another important focus for us, which we're calling DevCo. Largely, we are decoupling project execution and project development.

With our large customers, we want to work with them over a period of three, four or five years to build out their assets, rather than working on a project-by-project basis. That's another important decoupling that is happening.

If you look at our first review period, which is 2030, we need to bring together the required capacity to meet our targets. We have already achieved 300 GW, so around 200 GW is pending.

Of that 200 GW, approximately 150 GW is already at some stage of execution. Bids have been awarded, development is happening, or construction may be underway. So, effectively, there is visibility of around 450 GW today.

That leaves only around 50–60 GW where bidding still needs to happen, and we have four and a half years to get that capacity installed and operational.

So, from the targets that we need to achieve, we are reasonably on track in terms of what has already been bid and what needs to be built.

The other area that gets missed is the entire C&I segment. Bidding is only one element of the demand side.

Another major demand-side element is the C&I segment. Today, Indian industry is switching very rapidly to green energy. Every year, around 11–12 GW of capacity is being added directly by consumers themselves, whether industrial or residential consumers, where energy generation is being undertaken by the consumers themselves.

By 2030, this is expected to grow to almost 17–18 GW of annual capacity additions.

A new market trajectory has therefore developed due to the deregulation of the market. This is also a significant chunk of demand where bidding is not required. It is based on self-consumption, with consumers building capacity to meet their own requirements.

The other big chunk is the decarbonisation of PSUs.

All the PSUs are now moving more aggressively towards decarbonisation. They will come out with their own bids, independent of SECI and others. That is another significant source of demand.

So, I don't think we are in a situation where the trajectory of what we want to achieve by 2030 is constrained from a market-demand point of view.

Now, if we talk purely about the bids that have come in and the price discoveries that have happened, the market has moved significantly.

We still have a good portion of pure-wind bids. In fact, if you look at the wind segment, the first quarter saw the largest amount of wind bids coming out. System planners and state utilities are now getting a better understanding of the value of wind in the system, especially because, as I mentioned, it helps meet peak demand in the morning and evening.

Therefore, wind has greater value to the system. Because of its higher PLF, it can also deliver greater utilisation and better payback for the transmission system.

From the end consumer's perspective, wind delivers greater value because it helps meet peak demand. It also contributes to system stability. When you have a combination of wind and solar in the grid, it helps stabilise the system.

Otherwise, when the sun is up, the grid is well utilised, but after sundown, utilisation drops significantly. In a 24-hour period, the grid may effectively be utilised for only around 27–28% of the time for solar generation. If you have wind and solar together, grid utilisation can almost double.

Therefore, the new bids we are seeing are largely combinations of wind, solar and storage in some form or another. The market is recalibrating itself to determine the right way to structure the bidding process and move towards a new design. Overall, however, I don't think there is any slowdown in the trajectory.

First of all, we need to understand how the problem is working and what we are doing differently now. If we take the first part, when we talk about curtailment, it is largely a solar issue rather than a wind issue.

Solar development has moved much faster than anyone would have expected, partly because of the multiple schemes we have implemented to expand solar power in the country.

The challenge is that solar has a fixed window of generation during the daytime. At the same time, our peak demand occurs before sunrise and after sunset.

Therefore, whatever solar is generated can only be consumed to the extent that there is demand during the day.

There have also been concentrated pockets of solar development, with some states having much higher solar capacity than others. This creates situations where there is excess solar energy at times when it is not required, particularly during the afternoon.

There are essentially two things that can happen. Either you don't generate that energy—in other words, you curtail it—or you use battery storage to shift that excess energy to the morning or evening. You store the excess energy and then bring it back into the system when it is needed.

The short-term solution is battery storage, but that cannot be the long-term solution because battery storage is a cost item; it is not generated. Effectively, it increases the cost of solar. When you add battery storage to solar and try to shift that power to the morning or evening, solar falls down the order of priority as the least-cost option.

From a consumer point of view, the least-cost option is actually wind and not solar because wind generation is more aligned with when the consumer needs electricity. This requires balancing.

So, what is the solution? The temporary solution is to add battery storage because you have to put storage in place to move the excess power to a more useful period.

More importantly, going forward—and this is already happening—new bids should be designed for a specific purpose. They should not simply be designed around megawatts. They have to be designed to meet a specific load case or a low-demand situation in a state or region, depending on the business case we are trying to solve.

I think the new bids are already moving in that direction. If you look at the last six months, many of them are linked to a specific demand curve that they need to meet.

The moment you design projects that way and link them to demand, price discovery will be much better because the project is meeting a particular consumer demand curve. Therefore, you will not have the same curtailment issues.

That is the future. The market will increasingly move towards firm and dispatchable renewable energy (FDRE) situations that are linked to a demand curve. Over time, this should help avoid the issues we are seeing today.

I think this whole idea of comparing wind and solar is flawed in the first place. There is no competition between wind and solar, and we should not be comparing them because it is unfair.

Wind has its own advantages and solar has its own advantages. Neither can completely replace the other.

Solar is modular and can be installed in small fragments almost anywhere in the country. It has a fast time to market, and the price points are attractive.

But when you look at wind, it has higher plant load factors. You are able to generate significantly more electricity from the same megawatt capacity that you install compared with solar. Wind projects also have a longer operating life.

While the time to market for wind may be longer than for solar, wind is effectively able to generate electricity when it is needed to meet peak demand. Therefore, the value delivered by the two technologies is very different.

I think the conversation should be reframed around how we can use the complementary strengths of wind and solar.

To deliver value to the end consumer, that is the right way to look at it. The volume of how much solar gets built and how much wind gets built should be decided by the affordability of the combined solution for the end consumer, rather than looking at them as standalone systems.

You could build out solar, but if you then want to install batteries and shift the power, you have separated the price discovery of solar from the price discovery of batteries. Nobody is combining the two and looking at the total price that the consumer ultimately has to pay.

That is why the new bids we have seen over the last six months are being designed around consumers and tied to their demand curves in different states. We are already seeing the wind component increase in these bids. Naturally, this is because wind is able to generate when the consumer needs it, so the value of wind is significantly higher in the overall system.

I think it is a journey, and the market is now adjusting to this new future. As we go along, you will see this shift continue.

Having said that, wind projects are complex and take time to build. A 100 MW solar project could probably be built in 12 to 18 months, whereas a wind project could take 24 months or even 30 months. So, there is a time lag, which is an advantage for one technology and a disadvantage for the other.

Therefore, what we are doing as part of our DevCo is decoupling the development side of the project from the EPC side of the business.

Once we decouple these two activities, we can work on several gigawatts of projects for execution over the next 24 months, while simultaneously working on several gigawatts of projects for development in years three, four and five with our customers.

The moment we start working ahead of the curve, that 30-month cycle for wind development and execution—from development to execution—will start shrinking.

We will gradually reduce that cycle, which will allow us to develop wind at a much larger scale.

You are already seeing this. Every year, we are adding around 2–3 GW of capacity. Last year, we did about 6.5 GW, this year it will be around 8.5 GW, and next year we will cross 10 GW. So, we are adding 2–3 GW every year. By 2030, we should be in excess of 15 GW of annual capacity.