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Sprng Energy is a renewable energy platform set-up in early 2017 with an objective of build 2GW+ renewable energy assets

Interviews & Talks
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In Conversation with Mr. Gaurav Sood ,CEO ,SPRNG

· Let’s start with the recent developments at your SPRNG Energy in last one year.

Sprng Energy is a renewable energy platform set-up in early 2017 with an objective of build 2GW+ renewable energy assets to deliver competitive solar and wind energy. In our first year of operation, we have won two prestigious projects –

1. 250MW Rewa Solar Project at levelized tariff of INR 3.3/kWh. The project achieved financial closure (lead by IFC and L&T Finance) and is under construction with L&T Limited providing EPC services.

2. 197.5MW Gujarat Wind project at flat tariff of INR 2.43/kWh for which PPA was signed in January and project execution would start this year with commissioning due by June 2019.

· As a developer, what key challenges do you face today?

The solar industry is facing some serious headwinds:
1. There is a wrong classification of modules under HS Code – Most of the port authorities currently are considering the panels being imported under ‘8501’ instead of earlier classification ‘8541’, resulting in custom authorities to ask for a BG/ Provisional Duty (PD) Bond to tune of 7.5% of the import value.

2. Further, there is an ongoing anti-dumping investigation initiated by DGAD to evaluate whether dumping is happening for cells and modules from specific countries. One of the challenges the industry faces is that the domestic manufacturing industry is not equipped to deliver good quality solar cells to tune of more than 1GW whereas the government targets to install at least 10 GW of solar capacity every year for next couple of years to meet the committed target of 100 GW of solar by 2022. This has resulted in paradox, as, any dumping duty if levied, would translate in higher cost of electricity for end user and also it would become challenging to install the required capacities in line with expectations of government.

3. In first week of January, Directorate General of Safeguards recommended an imposition of provisional safeguard duty at rate of 70% ad valorem for imports of “Solar Cells whether or not assembled in modules or panels” from China and Malaysia.
All these create high uncertainties for developers in execution of existing projects and for bidding of future projects.

· Which states do you believe lead see maximum solar energy investments this year?

This year Rajasthan, MP, Karnataka, AP and Gujarat should be the leading states for solar investments.

· As the assets become older, will aggressive bidding today become a pain point for the industry a few years down the line?

Solar power assets have all along been allocated through transparent competitive bidding route. The tariffs over the years have come down on account of lower capital costs, operating costs, financing costs and technical advancements in terms of higher efficiency modules, bigger inverters, trackers, robotic cleaning, 1500V system etc. So, there cannot be a comparison between .

· At what price do you see solar tariffs stabilising in future tenders?

Currently there are lot of uncertainties in the solar industry. In case these don’t play out, tariffs should generally be around INR 3/kWh, with states having higher irradiation and lower land costs seeing lower tariffs and vice-versa.currently prevailing tariffs and tariffs of earlier PPA’s. Hence don’t see this becoming an issue in future

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