Acme Solar Likely To Generate Double Revenue From NHPC Project Than Conventional Ones

The firm-and-dispatchable-renewable-energy order from NHPC Ltd. will help Acme Solar Holdings Ltd. generate almost double the revenue that it typically gets from traditional solar power projects, according to Chief Executive Officer Nikhil Dhingra.

Acme Solar bagged the 250-megawatt FDRE order from NHPC at a tariff of Rs 4.56 per unit. This project includes a green-shoe option that could potentially expand the total capacity from the initial 250 MW to 500 MW.

The FDRE is a power source that provides a constant supply of electricity from renewable sources to consumers. The NHPC project will deliver four hours of peak supply, requiring a blend of solar, wind and battery technologies, Acme Solar said in a release. 

Dhingra said the FDRE order had a stronger revenue generation potential than traditional solar energy projects. "In this, typically, the revenue is almost double what you do in solar. In solar, you typically do a revenue of around Rs 70 lakh per megawatt. In this, the revenue will be close to around Rs 1.8 crore per megawatt," he told NDTV Profit.

However, with the much-higher revenue, a much-higher capital expenditure will also follow, according to Dhingra. "Of course, the capex is typically around three times that of solar (power projects)."

The high revenue potential will also increase the return on capital slightly, he added.

"The project is slightly more complex because you need to put up all three capacities, be it solar, wind, and battery. And these are all done on the national grid. So the integration is not an issue," Dhingra explained.

But in terms of the sheer complexity, these are complicated projects as compared to a conventional renewable and that is why the tariff is slightly higher than renewable, according to the CEO.

All the three sources of capex — solar, wind, and battery — have a higher Ebitda margin, typically in the range of 85% to 90%, Dhingra said. "So, in this business, the key thing is capex, how you can manage your capex cost. Because other than interest and a very small operation and maintenance cost, there is no cost."

"The margins are fairly high and it will be high in these projects also. So the margin will be similar to how the solar business margins are," he added.