Amp Energy India: Growing on the back of a diversified portfolio

Amp Energy, headquartered in Canada, is a renewable energy company playing the role of infrastructure manager, developer and owner. Established in 2009, the company has taken rapid strides to increase its footprint across geographies, spreading its operations across the US, Canada, India, Japan, Spain and Australia. Amp Energy entered the Indian renewable energy market in 2016 and for the first three years, it primarily focused on commercial and industrial (C&I) customers. The renewable energy independent power producer has a total portfolio of over 2 GW spread across 15 states. It has a balanced portfolio of C&I and utility customers, which allows it to provide clean and green energy solutions to more than 60 customers across 10 diverse sectors such as pharmaceuticals, automobiles, cement, steel, heavy engineering, infrastructure, FMCG, educational institutions, IT and data centres, utilities and government bodies.

Key recent projects

Diversification of its portfolio is among the most impressive works carried out by Amp Energy India through the years, which has also helped the company stay financially strong in the C&I space of the renewables segment. Although the company initially functioned in the solar energy segment to meet the end-to-end energy needs of its customers, it has now evolved into a diversified renewable energy solutions provider, also working in the fields of wind, solar, hybrids, storage and energy management. It has the ability to meet the short-term, medium-term and long-term requirements of its customers.

Recently, in October 2022, Amp Energy India collaborated with Ohmium International, a green hydrogen company that designs, manufactures and deploys polymer electrolyte membrane (PEM) electrolysers. The deployments, aimed at mid-sized C&I projects of 25 MW or smaller, are planned to be installed over the next three years. This collaboration will help Amp Energy to extend its business offerings to customers, thereby providing them with a one-stop shop for green energy and hydrogen in India.

Further, in September 2022, Amp Energy India announced its plans to manufacture 1.2 GW of solar cells and modules through a joint venture (JV) partnership with Websol Energy Systems Limited. Websol will hold 51 per cent share in the JV company and Amp Energy will hold 49 per cent. Notably, the companies have already entered into a term sheet for the establishment of a JV for production of monocrystalline passivated emitter and rear contact solar cells and modules in two phases of 600 MW each at Websol’s existing unit at Falta in West Bengal.

In September 2022, Amp Energy India signed a power purchase agreement (PPA) to sell renewable energy to Amazon from a 100 MW solar power plant in Bhadla, Rajasthan. The plant will be fully operational by the end of 2023. Earlier, in August 2022, Amp Energy India signed a PPA for a 100 MW/140 MWp floating solar park with Rewa Ultra Mega Solar Limited (RUMSL). The company was awarded the project at a quoted tariff of Rs 3.21 per kWh. RUMSL intends to build a 600 MW floating solar park at the Omkareshwar Reservoir. The project will be executed in two phases, with 300 MW to be developed in each phase at pre-identified locations over the reservoir. It will be implemented on a build-own-operate-transfer basis at a fixed tariff for 25 years. It will generate nearly 198 MUs of electricity per year. RUMSL has identified space for the project’s development on the reservoir and will lease land from NHDC for the development of this project. Additionally, in May 2022, Amp Energy won 120 MW at a tariff of Rs 2.53 per kWh in the Solar Energy Corporation of India’s (SECI) 1,200 MW interstate transmission system connected wind-solar hybrid projects (Tranche V).

Another milestone was achieved by Amp Energy India in May 2022, as it commissioned a 45 MW open access solar project in Maharashtra, which has long-term PPAs with Cipla, Eternis Fine Chemicals and Jubilant Ingrevia. The company reported that with the commissioning of this project, Amp Energy now has five operational open access solar projects in Maharashtra.

In January 2022, in Karnataka, Bosch Limited partnered with Amp Energy India for the supply of 30 MW of solar energy from its open access facility in Mallat village. As per media reports, this was Amp Energy India’s third open access project in Karnataka. The two companies signed a PPA for the procurement of solar power for 25 years.

In December 2021, Amp Energy India commissioned a 13.5 MW solar power project for Orient Cement. The project supplies solar power to Orient Cement’s manufacturing facility in Maharashtra from Amp’s open access facility in Gourgaon village, located in Osmanabad district in the state. A 25-year PPA was signed for this project.

In September 2021, the company installed a 2.4 MW solar power plant at Pondicherry University. The project is spread across 15 buildings, two parking lots and two land parcels on the university campus. It has been developed under the 97.5 MW rooftop scheme by SECI. Pondicherry University and Amp Energy India signed a 25-year PPA. Apart from this, the company has commissioned solar projects for other institutes such as the School of Planning and Architecture Delhi; National Law University, Bhopal; and the Atal Bihari Vajpayee Indian Institute of Information Technology and Management, Gwalior.

Key financings for captive projects

In the Indian C&I renewable energy space, the captive and group captive models have seen tremendous uptake. In the group captive model, multiple consuming entities are being allowed to buy power from a single project. In this model, 26 per cent of equity – which should be no less than 30 per cent of the capital structure – must be held by the recipient in order for a project to be able to transmit power without being charged cross-subsidy surcharges and additional surcharges. In addition, the consuming entities should use 51 per cent of the power generated. Amp Energy India has also tapped the potential of this model like other C&I players in the sector. The following are some select financing agreements for captive projects undertaken by the company.

In March 2022, Zydus Lifesciences entered into a share purchase, subscription and shareholders’ agreement to acquire up to 11.86 per cent stake on a fully diluted basis in Amp Energy Green Nine, for setting up a captive wind-solar hybrid power project in Gujarat.
In February 2022, Cipla signed an agreement to acquire nearly a third of Amp Energy Green Eleven. The move aimed to establish a solar power facility in Maharashtra that would be entirely self-contained.
In October 2021, Jubilant Ingrevia signed an agreement with Amp Energy C&I Private Limited, a wholly owned subsidiary of Amp Energy, to acquire 26.6 per cent stake in Amp Green Energy Fifteen Private Limited. The acquisition was made in order to set up a 15.5 MW solar project in Maharashtra for captive power generation.

The way forward

Going forward, Amp Energy India plans to scale up its portfolio to 5 GW in the next five years. The portfolio will include both C&I and utility-scale projects. To this end, the company will require an investment of over Rs 150 billion. Each year, the company plans to install 300 MW-500 MW of projects, with an outlay of Rs 15 billion per annum.

While C&I players in India have had a good run, benefiting from the corporate demand for renewable energy and high grid tariffs, they continue to face several challenges in the Indian market. The key challenges are policy uncertainties and flip-flops, and high and regularly changing open access charges. In addition, players have faced burdens due to the Approved List of Models and Manufacturers pointing out quality concerns in domestic solar modules, their higher prices vis-à-vis imports and insufficient domestic capacity to meet the demand; implementation of basic customs duties; and GST. Most of these challenges remain as pain points for developers.

Despite these acute challenges, C&I players continue to grow with the help of global and domestic investors who still have faith in the Indian C&I and utility-scale renewable energy market. Further, players continue to find marquee clients who are eager to reduce their electricity bills and meet their climate commitments. The dynamics of the sector are now changing quite rapidly with C&I clients demanding round-the-clock supply of renewables. To this end, Amp Energy India is well placed, given its diversification into wind-solar hybrids and energy storage while also entering the green hydrogen space. The company’s calculated risks in the utility-scale segment by foraying into the floating solar space are also a healthy sign, given the segment has huge potential with many such tenders expected, going forward.