French multinational energy giant Engie is bullish about growth prospects in India with the government’s increased focus on clean energy deployment. The company is working on its plan to invest $1 billion here and is open to explore a partnership for India solar business to co-invest in projects, Malcolm Wrigley, Country Manager, Engie-India told ETEnergyWorld in an interview. He also shares his views on the proposed safeguards duty on solar imports. Edited excerpts..
A recent media report said Engie plans to sell stake in its Solairedirect unit that has been bidding for projects in India. What is the larger plan?
Engie has business operations in around 60 countries in the world and I am responsible for India development and operations. We bought Solairedirect 3-4 years ago and all of our utility-scale solar power activity in India is carried out through it. Solairedirect has been renamed Engie Solar and, as of now, we own 100 per cent of Engie Solar and all the solar power plant assets it has built. If you look at how Engie does business for large industrial investments around the world, we generally work with partners in one form or the other. We prefer to work with partners, local and international, who can also be the fellow developers and financers and we are open to having a partner for our solar business here to co-invest with us in our existing assets and future assets too. We are open to that but no decision is taken and no detailed negotiation has happened.
What according to you are the business opportunities and risks currently in the Indian energy space?
India is aiming to have 175 GW of non-hydro renewables capacity by 2022 including 100 GW from solar power, 60 GW from wind power and 15 GW from other sources. Beside onshore wind and solar, the New & Renewable Energy Minister R K Singhsaid the government plans to auction 5 GW of offshore wind. With many years of experience in offshore wind, Engie has a lot to offer to support the country in this great announcement.
How would the proposed imposition of safeguard duty impact developers?
Personally, I do not think safeguard duty is a sensible thing to do in the long run as it will only raise the price of electricity to the end-user. However, from a business perspective if the government wants to do that they should ensure it is a level playing field for everybody, then developers would deal with it. I was pleased to see that the MNRE recently announced that PPA’s signed following upcoming auctions would have protection in them for the increased costs arising from any imposed Safeguard duty. This is a very positive step and allows developers to focus upon being competitive on the issues within their control without having to worry about project economics being destroyed by sudden imposition of Safeguard Duty. However, it took a long time for this to be forthcoming and created uncertainty in the market for developers for several months. I would recommend a much faster response to such issues in future. That way, the Government will always get the most competitive pricing for auctioned projects.
Engie is a French company. What is the level of competition you witness in India from developers based in China, Taiwan, and Malaysia?
In India, the developers from Singapore and Malaysia are quite aggressive. We do not see Chinese developers here in a big way as they are making their appearance outside China for the first time. Chinese developers are a long way down the curve for genuine project development. So, we do not see them as competitors at the moment. The real competition for us is French developers and the domestic homegrown developers who have local knowledge.
What is Engie’s larger investment and expansion plan in India?
About a year ago, we talked about investing $1 billion over the next five years in India and how we would like to grow our portfolio to 1 GW of wind and an additional 1 GW of solar. That still remains our target in this market and in the long-term we plan to stay in India and grow our business in the solar and other areas. Our business model is based on a long-term hold and operate strategy and we intend to continue to grow in the country.