ReNew: Aiming for net zero across the energy ecosystem

One of India’s largest independent po­­­wer producers in the renewable energy domain, ReNew (previously ReNew Power) has grown rapidly with the backing of key international inves­tors since it was established in 2011. As per ReNew’s earnings review for the third qu­ar­ter of financial year 2023-24, released on February 17, 2023, the economic sha­reholding of the company is split among the Canada Pension Plan In­vestment Bo­ard (CPPIB) (37.3 per cent), the Abu Dhabi Investment Autho­rity (14.4 per cent), Goldman Sachs (13.8 per cent), JERA (7 per cent), founding entities (3.9 per cent) and public shareholders (23.6 per cent). Over the years, Goldman Sachs has sold its shares in ReNew. As of Au­gust 2021 (listing date), Goldman Sachs held 35.57 per cent of the shares. Rece­ntly, in March 2023, CPPIB bought $268.6 million worth of shares at a price of $4.8 per share from Goldman Sachs, becoming ReNew’s ma­jority owner with over 51 per cent sta­ke. According to media reports, the reason for Goldman Sachs’ stake sale is to comply with laws in the US that do not allow financial institutions to own securities in any company beyond 10 years.


As per ReNew’s third-quarter earnings re­view for financial year 2023, the company has a portfolio of 13.4 GW, showing a 30.2 per cent increase year on year. The total portfolio includes solar (6.9 GW), wind (6.4 GW) and hydro (0.1 GW). Of the total portfolio, 7.8 GW has been commissioned (3.7 GW for solar, 3.9 GW for wind and 0.1 GW for hydro) and 5.6 GW has been committed (3.2 GW for solar and 2.5 GW for wind). Only about 1 per cent of the total portfolio is still aw­ai­ting power purchase agreements (PPAs). The total portfolio comprises 11.5 GW of projects that have PPAs with central and state counterparties, with the remaining 1.9 GW being tied up in PPAs with corporate counterparties. Of the corporate PPA portfolio, around 660 MW has been commissioned, with the rest to be completed over the next 18 months. In the third qu­arter of financial year 2023, ReNew signed new corporate PPAs for approximately 282 MW of capacity. The company’s target is to reach a 4-5 GW corporate PPA portfolio by 2025-26. Its key corporate cu­s­tomers include Amazon, Toyota, Suzuki and Mahindra.

In December 2022, ReNew signed a re­newable energy agreement for 150 MW of capacity with Microsoft India. As part of the arrangement, ReNew will produce 150 MW of clean energy from a recently commissioned solar site near Bikaner. In the same month, ReNew signed a cont­ract with Jindal Stainless to develop a uti­lity-scale captive renewable energy pro­ject for the supply of power to Jin­dal’s facility in Jajpur, Odisha. In August 2022, DCM Sh­ri­r­am agreed to source 50 MW of re­newable energy from ReNew for its manufacturing facility in Bhar­u­ch, Gujarat.

Onus on sustainability

ReNew has committed to becoming a net-zero carbon emitter by 2040 and has pledged to meet a broader range of environmental, social and governance goals including achieving carbon-neutral status with respect to Scope 1 and Scope 2 gr­een­house gas (GHG) emissions every year till 2025, developing science-based targets (for scope 1, 2 and 3 GHG emissions) that are validated by SBTi, achieving water positivity by 2030, procuring re­newable energy for operations and ac­hie­ving zero waste to landfill. Further, it aims to impact 2.5 million lives through corporate social responsibility initiatives, train 1,000 salt pan workers under Project Sur­ya as solar panel/pump technicians by 2024, and ensure 30 per cent representation of women in the workforce. As of the end of the third quarter of the current financial year, it had achieved 12 per cent representation of women in the workforce.

As per the company’s sustainability re­port 2021-22, ReNew generated 14,263 GWh of clean electricity that year – enough to power approximately 4 million Indian ho­useholds – and helped eli­minate 11 million tonnes of carbon emi­ssions through its op­erations (0.5 per cent of India’s total emissions). The re­port states that the carbon intensity of Re­New’s electricity generation is 95 per cent lower than the Indian power sector’s average. The company also disclo­sed Scope 3 GHG emissions for the first time, and achieved carbon-neutral status for the second consecutive year for Scope 1 and 2 GHG emissions.

Recent financial performance

For the third quarter of financial year 2023, ReNew reported a total income (or total revenue) of Rs 16,077 million – an in­c­rease of 19.4 per cent over the third quarter of financial year 2022. The ad­justed EBITDA for the third quarter of financial year 2023 was Rs 11,628 million – an inc­rease of 10.2 per cent over the previous year’s third quarter. Mean­while, the net loss for the current financial year’s third quarter was Rs 4,013 million, compared to a net loss of Rs 6,384 million for the same quarter in the previous year. The cash flow to equity for the current quarter was Rs 2,682 million – a decrease of 47.3 per cent over the preview year.

ReNew has also released the financials for the first nine months of financial year 2023. According to these, the company’s total income (or total revenue) was Rs 63,493 million, an increase of 23.1 per cent over the corresponding nine months of the previous financial year. The adjusted EBITDA was Rs 49,995 million, an increase of 17.8 per cent over the same period of previous fi­nancial year. Mea­n­while, the net lo­ss was Rs 5,103 million, compared to Rs 12,573 million in the previous year. The cash flow to equity was Rs 19,810 million, an inc­re­ase of 10.6 per cent over the previous year.

In January 2023, the new Norwegian Cli­mate Investment Fund, managed by Norfund in collaboration with KLP, Nor­way’s largest pension company, anno­un­­c­ed that it will make its first investment of Rs 900 million in a ReNew transmission pro­ject in India. Norfund and KLP will in­vest approximately Rs 900 million in ReNew for a 49 per cent ownership stake in ReNew’s transmission project in Kop­pal district of Karnataka, with plans for additional joint investments.

In November 2022, ReNew Energy Glo­bal Plc signed an agreement to acquire 3E, a renewable energy asset perfor­man­ce management platform, from KLP Ka­pitalforvaltning AS and Norfund. In Au­gust 2022, ReNew en­tered into an external commercial borrowing project fi­n­an­ce loan agreement with 12 international lenders, led by Rabobank. In June 2022, ReNew signed definitive ag­ree­men­ts to acquire over 500 MW of operating wind and solar assets.

In January 2022, ReNew sold 138 MWp of its distributed rooftop solar portfolio to Fourth Partner Energy, a rooftop solar en­ergy company, for Rs 6.72 billion. Fur­thermore, ReNew Energy Global Plc an­no­un­ced that India Clean Energy Hol­d­ings, a Mauritian entity, and its wholly ow­­ned subsidiary ReNew Energy Global Plc, had raised $400 million at 4.5 per ce­nt by issuing senior secured dollar notes.

The way forward

The way forward for ReNew is the diversification of its business into the green hy­drogen, energy storage, hybrid proje­cts and solar manufacturing verticals. In Nov­ember 2022, ReNew announced the signing of a framework agreement with Egypt for building a green hydrogen plant in the Suez Canal Economic Zone at an investment of $8 billion. In May 2022, the Maha­rashtra energy depart­me­nt and ReNew signed a Rs 500 billion agreement for setting up renewable energy projects in the state over the next six to seven ye­ars. In January 2022, Flu­ence and ReNew announced a partnership to form a new company to address the country’s rapidly growing energy storage market.

Going forward, in a bid to ensure security of supply for solar components, app­roximately 60 per cent of ReNew’s solar projects that are under development will be self-supplied. To this end, the company is currently setting up two module pla­nts of 2.1 GWAC and 1.2 GWAC capacity, which have achieved 67 per cent and 19 per cent completion respectively. It is also constructing a cell plant of 1.1 GWAC capacity, which is 39 per cent complete. The company committed Rs 8 billion and Rs 20 billion in capex for manufacturing in 2023-24 and 2024-25 respectively.

All in all, taking risks and exploring new business avenues is expected from a company like ReNew. It will be interesting to see how it navigates key challen­ges re­lating to land acquisition, pending dues from distribution companies, and power curtailment.

Sarthak Takyar