Rahul Munjal, managing director, told ET’s
Kaavya Chandrasekaran in an interview. Edited excerpts:
What are your goals for HFE? You have a new CEO now, Srivatsan Iyer, who took over from Sunil Jain two months ago. Will there be any change in HFE’s trajectory or strategy?
When I consider our competition in India, Goldman Sachs-backed ReNew Power, and other companies backed by entities like GIC, Softbank, CPPIB and CDPQ come to mind. They are all global companies with global mindsets. We too want to have a global mindset. Sri was last with Brazilian company Braskem and his role was to make it global. Given the juncture at which HFE is right now, we want to take our Indian company global. We needed somebody who had already done this before.
HFE has been conservative in bidding for solar and wind projects in India. Will that continue to be the case?
If it is a plain vanilla solar project, the competition is immense. Developers are competing on cost of capital. We would rather compete on projects where there is (innovative) engineering involved, (fresh) design involved – where the USP is complexity rather than cost. I don’t think we’ll be able to compete on cost, considering the money the big guys in the industry have. And we don’t want to.
The renewable energy ministry has been gradually moving away from conducting auctions for plain solar and wind projects towards complex, hybrid ones. What is your take on the transition?
It differentiates the people focusing on technology from those playing on low cost capital. We would like to play on technology.
Solar module prices have been on the rise since mid-2020. Do you still continue to import from China?
We don’t have a choice. We continue to import from China. The cost will stay up for the next couple of quarters and then come down again. The pandemic was bound to create some disruption. The world is topsy-turvy right now, and the dust hasn’t settled yet. Modules prices will stabilise over the next two to three quarters.
As many as 15 companies have committed to setting up solar manufacturing in India, following the government’s “Make In India” campaign. They intend to manufacture 40GW of solar cells and modules, according to reports. Does HFE have plans to get into solar manufacturing?
We don’t have any plans to enter solar manufacturing as of now.
The power ministry recently issued a notification directing states to henceforth allow net metering only for solar rooftop projects with capacity lower than 10KW. What do you make of the move?
It is a very adverse move for the industry. Globally, renewable energy use in the Commercial & Industrial (C&I) segment is booming. This segment wants to become carbon neutral. In India too, this segment is keen to move into renewables. These companies have global aspirations. India needs to look deep and hard at such policies before implementing them. I understand the point of view of the government – it feels that developers (by bypassing the distribution companies and supplying direct to consumers) are taking away good paying customers from distribution companies. Let’s find a way to address that. But let’s not create three problems in an attempt to solve one.
The Indian wind industry has been going through a lull of late. Will it see a revival this year?
The only way to revive wind is to have tenders for round-the-clock power and peak power (which will require bundling wind with other kinds of power, storage or other innovations). Pure wind is too expensive. If you mix it with solar, the average cost becomes less than that of wind (and thereby competitive). The government should push wind energy, there’s no question about it. But pure-play wind is difficult. It has to be mixed so that it serves a bigger purpose for the energy sector.