L&T is going in for a major change in its energy business focus. The country’s largest engineering company, which is mainly identified with large, thermal-fired power is going green by venturing into wind and hydro power generation. It has prepared a road map for building wind power projects in Gujarat, Maharashtra and Tamil Nadu for captive use. In addition, it is also investing around Rs 8,000 crore for setting up 700-800 MW of hydro power projects in Himachal Pradesh, Uttarakhand and Arunachal Pradesh. The projects would go on stream in the next four-five years.
Such initiatives will provide tariff relief and carbon credit. According to the government norms, it will get tariff relief on the equal amount of the energy being generated through renewable resources for captive use. For example, if L&T sets up 10 MW through wind or any other renewable energy plant, it will get tariff relief on an additional 10 MW being sourced from the state grid. In addition, L&T would also receive carbon credits under the United Nations Framework Convention on Climate Change. Once approved, these units are termed as Certified Emission Reductions, or CERs. This implies a value is assigned to the company, which contributes toward reduction of greenhouse gas emissions.
L&T is also looking to invest in about 5,000 MW thermal power capacity based on super-critical technology, which has higher fuel-efficiency with low emissions. The engineering conglomerate is also in the process of bidding several hydro power projects in the hill states of the country and in neighbouring countries such as Nepal and Bhutan. It has opted for wind energy for compensating its captive usage in the country. For its facilities in southern region of the country, L&T has placed its first wind energy order of over Rs 52 crore to the country’s largest wind turbine manufacturer Suzlon Energy, earlier this week. Suzlon will set up a 8.7-MW wind energy project in Tamil Nadu. The project is scheduled to be completed and commissioned before the end of the current fiscal, and the power generated will be wheeled for the group’s facilities in the region. Similarly, the group will also build other wind projects in Maharashtra and Gujarat, where most of the group facilities are located.