Mytrah Energy eyes 1000MW additional capacity
Check out how CEO Vikram Kailas plans to make this happen.
CEO Vikram Kailas shares that in just six years, the firm has commissioned over 1,000MW of generation capacity across 18 wind power projects, and is planning to commission another 1,000MW of wind and solar next year.
Renewable energy is at its prime in India, given its government’s strong support for sustainability efforts. According to Prime Minister Modi, the country eyes buildling 175GW of generation capacity by 2022 and achieve 40% capacity from non-fossil fuel-based sources by 2030. Mytrah Energy is amongst the companies at the helm of this energy shift in India, as it aims to own and operate 3,500MW of renewable power in the country. Its wind portfolio energy capacity is currently at 1,000MW and places the firm as the group with the largest wind data bank, being the only IPP that has over 200 masts across the country. It has also recently popped the champagne on higher profits on back of completed construction of wind turbines. Asian Power caught up with Mytrah Energy’s CEO Vikram Kailas as he shares the firm’s plans of dominating the renewable energy sector.
Please tell us about yourself. How long have you been in the industry and how long have you been with Mytrah Energy?
I co-founded Mytrah Energy in 2009. My association with the industry dates back to 2006 when I started working in New York as an investment banker serving energy companies. When we started Mytrah Energy, wind power in India was primarily driven by tax breaks and was not considered a viable sector to set up a business in. We saw things differently. Here was a sector with no reliance on subsidies, no fuel risk, and lower project risk due to shorter construction periods compared to thermal or gas projects.
So, despite having no prior operational experience, we were confident that we could build a scalable business in this space as long as we worked to a plan. My experience at these institutions has helped shape my outlook towards business and leadership. I learned the value of an empowered team that respects opinion. As a leader, I strongly believe that open debates on divergent positions lead to sharper, better-thought-out business decisions. I also believe in empowering people and delegating responsibility to them.
What are your business philosophies?
Mytrah’s success has been predicated on an imaginative, entrepreneurial business model that’s been turned into reality through focused execution. Mytrah is India’s first utility-scale renewable independent power producer, indeed the first start-up utilities company. Building such a firm required quite a leap of faith from all stakeholders – our investors, our early employees, our business partners, our lenders since such a model was unprecedented in the industry. That’s why it took four months and 300 investor meetings to raise our initial equity capital of US$80m.
At Mytrah, we also encourage a multiplicity of voices. Building engaged and empowered teams is critical for a firm to succeed and I try to do my best to facilitate the process. I am conscious that my opinion shouldn’t be an overbearing part of processes I am involved in. You could say that I have learned to appreciate the power of the leader’s silence as a tool of empowerment.
What are the biggest challenges Mytrah Energy is currently facing?
The first challenge is maintaining consistently high standards across all business activities. In case of project execution, for example, this means timely completion of construction activities whilst staying within budget and adhering to global quality standards. In case of plant operations, this translates into maintaining our generation assets optimally thereby ensuring high machine availability levels, and so on. Second, the firm needs to consistently take a long-term view of things. We supply energy under power purchase agreements that can run up to 25 years. To be able to deliver on its commitments consistently over such long periods, such an approach is not only recommended, it is a necessity. Third, the firm must stay abreast of the industry’s ever-evolving conditions. A couple of points can help explain this issue. One is the recent change in the mechanism used in India to award new wind power projects from a feed-in tariff to a reverse auction method. Another is the ongoing changes in project costs due to fluctuating input prices, changes in technology, and other factors.
One needs to understand the impact of such changes to take appropriate business decisions, e.g., in an auction, the firm needs to have answers to questions like – does it involve assets in specific geographies? If yes, should one have different plans for different assets? Likewise, on the issue of project economics, it may seem like the current period is one of secular decline in costs. So, one could argue that continuing decline in tariffs is in order. But does this analysis stack up if one takes a long-term view of things? These questions can’t be taken on the fly, they require thoughtful review.
What is Mytrah Energy’s biggest plan to date? What should the industry be excited about?
Mytrah Energy commissioned over 1,000MW of generation capacity across 18 wind power projects in eight states within six years of its inception. The firm is currently constructing nearly 1,000MW of wind and solar projects and plans to commission them over the next year. The pathway for the secular growth of the Indian renewable power sector has become clearer with time. Whilst the target of 175GW by 2022 is a challenging one, the momentum gained by the industry is undeniable.
The unmet renewable purchase obligation of close to 40GW and the supply gap expected to emerge from retiring old, polluting thermal assets should help sustain the momentum.
Auction-based award of wind and solar power generation capacities is becoming the norm now. The recent auctions for wind and solar power generation capacities have seen wide ranging participation. With continued support from the Central government, we could see 15GW of capacity being auctioned out on a year-on-year basis. All of this shows that we are on the cusp of a very exciting phase of growth for the industry.
What are the newest projects that you have as of the moment and what projects are in the pipeline?
In the wind power space, Mytrah currently has 320MW of projects under construction, whose details are available in the firm’s Annual Report. The firm recently participated in the auction of interstate wind power projects conducted by the Solar Energy Corporation of India (“SECI”) and won the right to construct 250MW of projects. The project will be constructed at Maniyachi in the Thoothukudi district of the south Indian state of Tamil Nadu.
It will supply power to the Power Trading Corporation (“PTC”) under a 25-year Power Purchase Agreement. The power will be injected into the Central Grid for distribution utilities with whom PTC will execute Power Sale Agreements. Mytrah has recently received the Letter of Award for the project from SECI and is working towards completing it within the stipulated 18-month construction period. The other project under construction project is the 70MW Aspari Extension project in Andhra Pradesh, another southern Indian state.
In solar power, the firm is working on 500MW of projects across three Indian states – Telangana, Punjab and Karnataka. All these projects are currently under construction and are expected to become operational over the next few months. Apart from these, we have several other projects under various stages of development.