Wind turbine manufacturer Suzlon Energy Ltd has earmarked capital expenditure (capex) of Rs 300 crore for financial year (FY) 2025 in a bid to enhance capacity amid growing demand for renewable power in India, the company's Chief Financial Officer (CFO), Himanshu Mody, told Moneycontrol in an interview. The wind energy player has a total capacity of 3.1 gigs watts (GW). Now, plans are afoot to scale up its capacity to 4.5 GW by the end of FY25.

The company has embarked upon its ambitious plan amid India's bid to substantially increase its wind energy capacity to mitigate the climate change challenges. The nation is set to boost wind energy capacity to 25 GW by 2028, which will entail an estimated Rs 2 lakh crore in investment.

Suzlon, which has managed to shake off its heavy debt burden, is looking at meeting the nation's growing demand for wind energy, one of the major sources of clean energy. The firm is not only providing its wind turbines, but also offering a range of operational and maintenance (O&M) services. It recently acquired Renom Energy Services to establish market leadership in the O&M service business.

Mody said,  “A majority of capex will be allocated towards wind turbine generators (WTG) in a bid to enhance capacity expansion. The company is augmenting capacity to close to 4.5 GW by the end of this financial year.”

At present, Suzlon's order book stands at 5.1 GW, with the state-run National Thermal Power Corporation (NTPC) and Jindal Renewables among its key customers.

Mody listed challenges pertaining to timely execution of projects and logistical issues such as availability of land as some of the primary reasons that have impacted the company's bottomline in recent times.

Suzlon's revenue source is based on the delivery of wind turbines or allied components to its customers. Any delay in project execution can directly impact its revenue.

On October 28, the  company's Chief Executive Officer (CEO),  Jayarama Prasad Chalasani, flagged in the analysts' call that there is a significant gap in the industry between the supply versus commercial operation date (COD).  He cited that of the 770 megawatt (MW) commissioned in the first quarter, nearly 600 MW came from turbines, which were originally supplied in 2021 and 2022.

"Going forward, quarter-to-quarter, the supplies will increase, only if projects are able to off take. We are looking at a capacity of 4.5 GW by March, 2025.  Supply has never been a constraint. However, it's a question of projects' off taking,"  he  added.

Suzlon Energy has reported a 96 per cent jump in net profit at Rs 201 crore for the second quarter, ended September, 30 due to higher deliveries as compared to the corresponding period last year. Net volumes rose to 256 MW — up from  132 MW in the second quarter in FY24. However, deliveries declined 6.5 per cent, as compared to the last quarter.

The company flagged availability of manpower as the biggest challenge in the renewable energy sector.

"We are not getting the right kind of human resources," Chalasani said. He emphasised that as the company expands its manufacturing capabilities, project sites, and OMS locations, it is crucial to attract skilled manpower, invest in their training, and ensure their retention in key roles. "This has become our primary focus," he added.

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Published on - Oct 29, 2024 03:50 pm