Hero Group enters renewable power generation

Hero Group yesterday unveiled plans for its entry into renewable power generation, targeting a capacity of 1,000 MW investing over Rs6,000 crore by 2016-17.

The move would see the company invest in greenfield and brownfield opportunities in wind, solar and small hydro projects.

The new subsidiary, Hero Future Energies would further expand the group's diversified activities.

The group already has a significant presence in manufacturing and services sectors like automobile (two-wheelers), IT and financial services and education and training besides real estate.

The company would be helped with funding by its parent over next three, four years on its way to emerging a self-sufficient entity.

Rahul Munjal, managing director, Hero Future Energies, said the group was making a strategic move into the renewable energy sector in the wake of the significant power shortages being witnessed in the country.

He added, the group would operate across various verticals of renewable energy that is, wind, solar and small hydro - of which wind and solar would be the initial focus areas.

The company had already commissioned a 37.5 MW pilot wind power project in Rajasthan, which would supply electricity to 70,000 households in the state.

''In the current year 2013-14, we have targeted to develop 100 MW of generation capacity based on wind and solar. Besides, we will also build a1 MW roof-top plant this year,'' Munjal told a press conference. The group is targeting a total investment in 2013-14 around Rs750 crore.

In an interview with Limvemint, Munjal said the group would like to be in businesses which were the need of the economy, be it bicycles when the group started, or motorcycles.

He added, India imported 10 per cent of the coal it needed and imports were expected to rise to 23 per cent in the next five years. He said, in view of the power deficit, India could afford not to encourage the sector.

Munjal said there was already around 8-9 per cent deficit and these deficits were alarming and since development needed energy the answer was renewables.

He said, India had enough of sun and wind resources which amounted to around 172GW, of which 30GW had been tapped. 

He said the general mindset was that renewables were expensive but that was not the case any more. He pointed out that in the last three years, the cost of solar had more than halved.

To a question about renewables being dependent on subsidies he countered, that was not the case. He said if the subsidies given to coal today were withdrawn, renewable would work out cheaper.

He said if one were to take out subsidies from all energy and put everything on a level playing field, renewables were cheaper.