Brookfield aiming to build 12-16 GW of renewable power in India over the next 10 years
Brookfield is looking to multiply it’s current 4 GW renewable portfolio by 3 to four times in India within the next decade in generation as well as help corporates make the transition to decarbonise and invest in building large scale supply chain in the country, said a top executive.
The renewables current assets under management is approximately $1 billion.
Earlier this year, Brookfield Asset Management announced that it raised a record $15 billion for its inaugural Global Transition Fund. This marks the world’s largest private fund dedicated to the net zero transition, signaling that investors are still committed to establishing cleaner portfolios. Brookfield is the single largest sponsor of the fund having deployed $2 billion itself.
“For over four decades, we have been large owners, developers, builders of renewable energy assets. It was predicated on buying operating assets,” said Connor Teskey, Managing Partner, CEO Renewable Power & Transition at Brookfield. ” Now we are focusing also on greenfield and leverage our knowledge and operating teams along with differentiated capital to become a solutions provider. “Every government and corporation around the world is under pressure to decarbonize either due to stakeholder, economic or regulatory pressure or penalties in some markets. And there are some great businesses out there, great counterparties out there that need either an operating partner or a capital provider to help them reach those goals. And we are increasingly being reached out to be that counterparty, having a pool of capital to support those initiatives.”
Some blame the trend toward ESG-investing for high energy inflation. And at a time when commodity prices for clean tech are inching up in tandem with interest rates, coal or fossil fuel options is once dominating the narrative in the backdrop of an energy crisis fuelled by the Ukraine war. Critics say the focus on clean energy has curbed investment in fossil fuels, which may have otherwise helped boost supply.
Calling them short term reactions, Teskey told ET during an exclusive interaction that renewable energy is the cheapest source of bulk electricity in most markets. “The global trend towards decarbonisation far outweighs any government or Central Bank actions.”
“It’s a marathon, not a sprint. So one needs to pick up the spots and build scale,” added Nawal Saini, Managing Director, Renewable Power & Transition.
Brookfield deals with state utilities but sees incremental green power demand coming from corporates who are increasingly becoming bulk consumers. For example, as part of its road map to achieve 100 per cent dependence on renewable energy by 2025. Amazon on Wednesday announced its first utility-scale projects in India — three solar farms located in Rajasthan. These include a 210-megawatt (Mw) project to be developed by India-based developer ReNew Power, a 100 Mw project to be developed by local developer Amp Energy India, and a 110 Mw project to be developed by Brookfield Renewable Partners.
In June, Brookfield Renewable had commissioned its first greenfield project in India, a 445 MW solar plant, near Jodhpur, Rajasthan. NTPC will offtake this power under a 25-year PPA (power purchase agreement) for onward sale to Madhya Pradesh Power Management Company and Puducherry Electricity Department. With full commissioning of the plant, Brookfield’s operational renewable energy portfolio in India will be 4 GW.
The Canadian asset manager has large pump storage projects in UK, US. It’s hydro power plants operate across North and South America. In UK, they also operate a utility scale battery storage company called Cambridge Power.
“The long term power purchase agreements may be 1.2-1.5x more expensive than grid power but still cheaper than merchant rates,” says Teskey. “Input costs for thermal power has skyrocketed but not in similar fashion for renewable. The government support and the overall efforts of corporations to bring down their carbon emissions are additional tailwinds.” “At the core it’s economic logic and commercial logic that is driving the pivot towards clean energy. ”
By looking to be a decarbonising partner of scale, Brookfield is looking at several ways to engage with corporates in metals and mining, auto, chemicals, manufacturing — large emitters of carbon.
The first step is through procurement of green power that either cost equivalent or cost saving. Additionally, Brookfield is also looking at helping companies to become energy efficient. It can be through introduction of green hydrogen in their energy mix or carbon capture in their facilities or EV charging stations for auto companies. We can be a capital provider or be an operator of those or even help in the construction as our operating teams have the necessary expertise. The plan is to be joint venture partners.
“We are also being helpful decarbonisation partners to large-scale corporate customers looking to make that energy transition over the next couple of decades. We want to bring all of our global expertise as well as our local knowledge to be that decarbonisation partner of choice so that those groups can focus on their core businesses, and we can focus on helping decarbonize them. And I think that in itself is going to be a massive opportunity over the coming decades,” said Saini, Managing Director, Renewable Power & Transition.
For example, Brookfield has a 50:50 alliance with California Resources Corporation for carbon capture and storage. Overall Brookfield has $22 billion AUM in the country across its focus sectors.
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