The FY21 Union budget extended the concessional corporate tax rate of 15%, earmarked for manufacturing companies, to new domestic electricity generation firms, effectively reducing their tax incidence by 10 percentage points.
State-run NTPC is considering spinning off its recently formed renewable energy subsidiary to raise funds for solar and wind power projects.
“We will soon go public with NTPC Renewables,” the power generation behemoth’s chairman and managing director Gurdeep Singh said on Tuesday at the Bloomberg New Energy Finance (BNEF) Summit in New Delhi.
NTPC, earlier known as the National Thermal Power Corporation, is predominantly a coal-based player. In October 2020, it incorporated its wholly-owned subsidiary NTPC Renewable Energy to focus on its green energy business. The company has doubled its renewable energy target and now wants to have 60,000 megawatt (MW) of wind and solar capacity by the end of 2032.
Currently, the installed renewable energy capacity of the company is 1,365 MW and by FY24, it intends to add about 13,000 MW of green power generation base. NTPC is in talks with the governments of Gujarat, Rajasthan, Maharashtra and Andhra Pradesh for allocation of land parcels for 17,000 MW of renewable energy projects under the Ultra Mega Renewable Energy Power Parks scheme.
It quoted the lowest tariffs of Rs 1.99/ unit and Rs 2/ unit in the recent solar auctions as it enjoys relatively lower costs of debt owing to its government backing and positive ratings. It has also gained from a lower tax rate since the projects will be set up under NTPC Renewable Energy. The FY21 Union budget extended the concessional corporate tax rate of 15%, earmarked for manufacturing companies, to new domestic electricity generation firms, effectively reducing their tax incidence by 10 percentage points.
India has set a target to raise renewable energy capacity to 4,50,000 MW by 2030 from 95,000 MW at present. Reliance Industries (RIL) has recently unveiled a mega plan for green energy and pledged initial investments of Rs 75,000 crore out of its internal resources over the next three years. Speaking at the BNEF summit, Union power minister RK Singh said RIL’s announcement was “music to my ears”.
RIL’s plan include setting up manufacturing units for solar cells and modules, a battery unit for energy storage, a fuel cell-making factory and an electrolyser plant to produce green hydrogen, which are typically the ingredient needed to support the growth of renewable energy and currently these items are not abundantly made in India.
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