Interview: Vineet Mittal
Chairman at Avaada Group
Our decade-end goal is to sell green molecules, not green energy
January 27, 2023. By Manu Tayal

Que: Kindly shed some light on Avaada's consistent growth journey and extensive expansion plans.
Ans: Avaada as a group has transitioned from a pure-play renewable energy company to a diversified enterprise that has a presence across the value chain of the clean energy transition. If I have to describe to you in a single sentence, we are going to be a sand-to-molecule company. We will convert sand into silica, silica into wafer, wafer into cell, cell into module, module into electricity, and electricity into green ammonia, green methanol, and sustainable aviation fuel. Our decade-end goal is to sell green molecules, not green energy. Currently, we have ~4 gigawatts of operating assets. We are looking to add around ~3 gigawatts plus every year for the next decade to become a ~30,000-megawatt company by 2030. In terms of our renewable energy portfolio, we are targeting 1 gigawatt of electrolyzer manufacturing and almost 10 gigawatts of silica to module manufacturing. We see tremendous opportunity in this area. Avaada currently has ~4 GW and plans to become an 11 GW renewable energy company by 2025. Getting aligned with Hon'ble Prime Minister Narendra Modi's vision to make India 'Aatmanirbhar' or an energy-secure country, we are adding strength to our solar module manufacturing arm with backward integration.
Que: In the coming years, what are the plans of Avaada Group to become a 'sand to molecule' company to tap domestic and global markets?
Ans: The green energy transition is vital to the country's Atmanirbharta (self-reliance) mission, which will pave the way toward the net-zero goal. Aligning with the nation's vision of self-reliance, Avaada aims to make India energy independent by focusing on green energy security. Both hydrogen and ammonia are considered future fuels that will replace fossil fuels, ensuring environmentally sustainable energy security for India.
As far as the renewable energy business is concerned, we will continue to grow on the back of the increased demand for sustainable energy. Besides bids from Central and State power procurement agencies, there will be an increased focus on C&I Market. We are also investing in new solutions involving solar, wind, pumped hydro storage plants, electrolyzers, etc. With solar power and other renewable energy sources and our collective efforts, I believe we can build a transition to a renewable energy future and offer affordable renewable power to markets that have historically been underserved.
We are working on integrating our supply chain to transition from a cell to a molecule company. We have an integrated energy model. We are doing equipment manufacturing, solar panel and electrolyzer manufacturing, solar generation, wind generation, and storage. Along with this, we are also exploring pumped hydro under the renewable energy vertical.
In the future, with a phase-II plan, we will scale it up further and enter into polysilicon and ingot wafers later. Eventually, we are looking forward to becoming a sand-to-molecule company, an integrated business working on energy transition for decarbonization.
As it gets future-ready, Avaada Group will be diversified into green hydrogen and green ammonia, targeting a significant capacity in the space, which will meet demand in domestic and foreign markets. The group is also poised for a new business segment involving electrolyzer manufacturing.
We have commenced execution of a one-million-tonne plant in collaboration with the Government of Rajasthan, which will be commissioned by 2025-26. Taking all these elements into account, we firmly believe both green hydrogen and green ammonia have the potential to lower the overall carbon trail of many industries, which will help safeguard humanity and, in turn, our precious planet.
The next few years will focus on green energy and carbon net zero. This decade presents us with the opportunity to contribute to achieving net zero significantly.
Que: How do you plan for sourcing funds for different verticals?
Ans: Funding has never been a problem for us, given our good relationships with lenders and investors and our record of delivering quality work on time. We are a high-growth company, and capital is abundant in the private market.
Que: Cabinet approves initial outlay of Rs 19,744 crore under the National Green Hydrogen Mission. What are your views on this development?
Ans: Approving Rs. 19,744 Cr for the National Green Hydrogen Mission by Cabinet provided a much-needed boost to encourage the Green Hydrogen industry. This intervention is even more significant because it came at that time when India has the G20 presidency, clearly showcasing India's commitment to lead the global energy transition. Under the visionary leadership of Hon'ble Prime Minister Narendra Modi, India is targeting to become a global Green Hydrogen manufacturing hub. I'm certain this landmark decision will act as a launchpad for achieving the ambition.
Indian hydrogen demand is anticipated to see a five-fold jump to 28 MT by 2050, along with tremendous opportunities that exist for exports. The impetus will translate into increased cooperation between government, players, and innovators to make the green hydrogen fuel of the future and India a leader in the green energy space. This intervention will help Indian developers cater to the requirement and augment the ongoing efforts to reach the target of 500 GW of renewable energy by 2030 and net zero emissions by 2070.
The government has also shown the foresight to encourage investment in the upstream value chain of Green Hydrogen by allocating Rs. 4,500 crores for electrolyzer manufacturing and associated eco-system.
Overall, it's an encouraging and positive development, and we welcome it wholeheartedly.
Que: Recently, the government has launched a transmission system development plan to integrate 500 GW of renewable energy (RE) by 2030. Being a RE industry stakeholder, how do you see the impact of this move?
Ans: It is a good move, by the government which comes at the right time. The plan calls for an investment of Rs 2.44 trillion in transmission projects to connect mega solar parks and wind power zones to the national grid as India strategizes to identify forthcoming fossil fuel-based generation centers across the nation, which also solves our transmission losses to an extent.
It is well noted that the gestation period of wind and solar-based generation projects is much less than that of the associated transmission system. Hence, the transmission system has to be planned well in advance. As India plans to integrate 500 GW of renewable energy by 2030, we need to plan our steps accordingly and ensure that those steps are efficient enough to make our set target a success.
Overall, this plan will help us in generating potential sites and increase the scale of investment opportunities.
Que: In the government's PLI scheme, MSMEs feel they have been side-lined. What is your take on this?
Ans: India's renewable energy sector is heavily dependent on China for capital equipment. Despite having a large market, domestic industry lagged due to a lack of ecosystem and insufficient subsidies. However, the PLI scheme, which originated from the Hon'ble Indian Prime Minister's ambitious program of 'Atmanirbhar Bharat', will have a transformational impact. The Scheme is expected to generate direct investment of around Rs. 94,000 crores.
The solar manufacturing sector is highly capital incentive, and MSMEs cannot be expected to invest in setting up the facilities. MSMEs will benefit from the PLI scheme because large facilities will need raw materials and ancillary products, which can be catered through a complete MSME ecosystem. We expect MSMEs to benefit significantly.
Que: What are your expectations from Finance Minister Nirmala Sitharaman in the Union Budget 2023?
Ans: With India's agenda for climate action with a larger focus on energy transition and pushing for renewable energy, we would want long-term financing support, a reduction in duties on key components for electrolyzers, and GST on Solar Modules. Some fundamental challenges plague India's manufacturing sector, which also applies to RE manufacturing. Some of the key challenges include:
- Cost of Funding: Funding remains challenging for RE generators, which is the case for new manufacturing facilities. Concrete measures like dollar-denominated tariffs, DFI lines, and credit enhancement facilities can be introduced to address the issue.
- Definition of Infrastructure: Green Hydrogen and its variants, like Green Ammonia, etc., are emerging as a strong alternative to fossil fuels for decarbonizing industrial sectors like fertilizers, steel, etc. The requirement for debt and equity capital is enormous. While the capital is available, one of the constraints to financing is the non-inclusion of Green Hydrogen and its variants as infrastructure. Govt. can relax the same and include them in the list.
- Taxation: GST on solar modules continues to be 12% which is significantly high. It directly impacts the electricity tariffs. With increased module prices, the solar power tariff has increased substantially. To encourage wider solar power adoption, GST is requested to be reduced to 5%.
- R&D: India spends about 0.7% of its GDP on research and development, a considerably small amount compared to other developed nations. It prevents the sector from evolving, innovating, and growing. In addition, Government’s R&D institutions like CSIR, BARC, and IITs are extremely reluctant to share technologies for commercialization. The bureaucracy and procedural maze are so difficult that the technologies that could get commercialized remain confined to the closets of these institutions. Govt. can consider the formation of institutional mechanisms to facilitate better collaboration between industry, research, and academia to advance India's agenda of becoming a technology leader.
Que: What do you think of India taking to solar waste manufacturing to recycling rare earth metals?
Ans: Recycling solar waste is expected to become increasingly important in the foreseeable future. Recycling rare earth minerals is most challenging since these are difficult to remove once embedded in devices. The world has witnessed a rapid increase in solar photovoltaic (PV) capacity installed over the past few years. As the demand for solar panels increases, raw materials will become scarce.
The Government of India is aware of the solar waste issue and may be addressing this in the coming years. At present, the government is working on a comprehensive and effective policy to retrieve and manage solar panel waste from its manufacturing process. The government and industry are working together to ensure that India takes concrete steps in this direction which would help the country shift faster towards a circular economy.
The introduction of the disposal industry is vital for solving the complex global problems of demand outstripping sustainable supply chains, geopolitics, and recycling. Looking at it as an opportunity, we must work to establish a circular economy for disposal and a solar energy economy, which can also encourage the 3R initiative i.e., the principle of reducing waste, reusing, and recycling solar PV materials. This strategy will help transition and power a low-carbon future globally for life. The government should plan good recovery guidelines to boost the economy with the disposal industry. Along with this, we should focus more on alternatives to reduce the chances of supply chain issues with alternative metals and technology transfer from developed nations.
Que: What else India can do to ramp up the manufacturing of electrolyzers?
Ans: On the back of Govt.’s Green Hydrogen policy, many corporates have already announced massive plans to enter the Green Hydrogen and Ammonia business, creating a huge demand for electrolyzers.
With India's new hydrogen policy making it easy to establish a hydrogen plant, this is slated to offer a fillip to the hydrogen economy. Govt. has also shown the foresight to encourage investment in the upstream value chain of Green Hydrogen by allocating Rs. 4,500 crores for electrolyzer manufacturing and associated eco-system.
India must also develop supply chains and create an ecosystem to establish a marketplace that can regulate the demand and supply of electrolyzers and aid the manufacturers as well instead of depending on imports for components and technology. At the same time, Govt. must encourage research and development institutions and provide them with adequate funding to research in the area and help India become the technology leader in space.
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