Thermax Plans Foray Into Renewable Power, Electrolyser Production
The company plans to increase its renewable portfolio to 1,000 MW in the next three years.
Thermax Ltd. has planned for a full-fledged green energy foray into renewable power generation, electrolyser manufacturing, and green hydrogen generation projects over the coming years, as it seeks to meet the needs of customers transitioning to cleaner fuels.
The energy heating and cooling solutions provider has set up open access-based renewable energy projects for commercial and industrial corporates in Gujarat, Tamil Nadu and Maharashtra. It has around 250 MW of renewable projects at various stages of development.
The conventional boiler manufacturer plans to increase its renewable portfolio to 1,000 MW in the next three years.
“We have invested close to Rs 2,000 crore on renewable capacities so far,” Ashish Bhandari, managing director and chief executive officer of Thermax, told BQ Prime.
The company has set up three green-focused subsidiaries to execute renewable energy projects. First Energy Pvt. will provide customised off-grid captive wind-powered solutions. Thermax Onsite Energy Solutions—which the company has been operating for the last 10 years—will own and operate green utilities and has executed 30 projects in the last three years. Thermax Bioenergy Solutions will focus on biomass-based biogas and CNG projects.
Each of these arms are expected to be a Rs 1,000-1,500 crore business by 2026, Bhandari said.
In all these projects, the company will follow an operating expenditure, or opex model, instead of the capex model. In opex, the company invests in the projects of the customers, while they pay as they buy, which turns out to be an annuity model for the company.
“As the businesses stabilise at a later date, the company may bring in an external partner,” Bhandari said.
In First Energy Private, Thermax invests 75% and customers bring in the rest, while Thermax Onsite Energy Solutions has been generating cash and is now going international. The company has funded a significant portion of the equity from its own cash reserves and earnings, he said.
The company plans to invest around Rs 500-600 crore over the next two years in the equity of these businesses, and around Rs 1,500-2,000 crore on the debt side at the project level in these entities, Bhandari said. “The debt will be at the specific project-based SPV level and not at the corporate level.”
Thermax plans to get into electrolyser manufacturing, biomass-to-hydrogen generation, end-to-end EPC of hydrogen projects and build-own-operate hydrogen projects for industrial customers.
For exploring possibilities in the hydrogen foray, Thermax is working with Fortescue Future Industries Pty Ltd., an Australian green energy company.
“We are still few quarters away from announcing something concrete on the hydrogen business,” Bhandari said.
