April 2015 | Cynthia Rodrigues

'We were getting marginalised'

Tata Power had to think beyond Mumbai to stay relevant in a rapidly changing industry, and that’s what it did, writes Prasad Menon

Prasad Menon I have very happy memories of Tata Power; it was hard work but extremely satisfying. When I took over as the company’s managing director, it was largely Mumbai-based, with generation and distribution interests in the city, and one unit in Jojobera.

It was in such a scenario that we took the decision of expanding and getting into generation away from the Mumbai region regulatory area. We felt then that we were becoming marginalised because our work was limited to Mumbai. Many private players were getting into the business and we would have been sidelined if we had not taken the decision to grow. We needed to move into different kinds of business models or risk being left behind.

The first large venture that we got into was the joint venture with the Damodar Valley Corporation for Maithon. We also won the Mundra project. Getting into these large projects helped us hone our ability to run massive greenfield ventures.

It was also around this time that we began moving into renewable energy. We already had a stake in solar power through a joint venture with BP. So we started looking at setting up solar plants and wind farms. We invested in a geothermal project in Australia and bid for another project with an Australian firm in Indonesia. With these projects, we began to make inroads into various areas of renewable energy.

At that time, the group too was discussing issues of clean power and sustainability. In many ways Tata Power, driven by its sense of responsibility, was leading that effort. Around the world, activists were beginning to target power companies, particularly those in the developing world that were dependent on coal.

We decided that we must transform ourselves, moving in a very deliberate and structured manner from coal energy to clean energy, even though initially the cost of generation was higher. So we set ourselves certain targets about what percentage of energy generation would come from renewables. We had a development wing to look into these areas.

This was a major period of expansion for us. Geographically and business wise, we got into newer areas. It was a challenge to get the right people to run those new projects, as well as to inculcate the kind of thinking that we needed then. Tata Power also proved itself successful in managing public-private partnerships in generation, distribution and transmission. We became an integrated energy player.

The Bhivpuri generating station near Mumbai
In Mumbai, our attempts to expand our distribution area faced some challenges, but we met them successfully and got closer to our customer. We have begun to understand what it means for a power company to be connected to the customer. Tata Power has gone through a huge transformation from the early part of that first decade to where it is now. Our people have been able to make that transformation happen, thereby ensuring the stability of the organisation. The fact that Tata Power has always been quick to adapt new technologies and that we have had good engineering talent have enabled us to grow.

Looking ahead, I believe that there will be far more distributed power in the future than what we see today. The consumer will have a choice about which provider to buy from. We will see a lot more private-public partnerships in distribution and transmission and more renewable power. I hope India will be in a situation where we will genuinely have a surplus of power capacity.

Prasad Menon was Tata Power's managing director from October 2006 to January 2011.

Know more about Tata Power's fascinating journey:
Overview: 100 years of high-wattage performance
A century ago, Tata Power ran a single hydroelectric project in India. Today it has grown to a $5.6-billion global enterprise, with coal mines in Indonesia, wind farms in South Africa, energy projects in Turkey and Zambia and technology partnerships in Australia. It is India's largest integrated private power producer, spanning power generation, transmission, distribution and trading
'We will continue to bring new technologies to India'
The path that Tata Power has chosen for itself is global and clean, as the company’s chief executive, Anil  Sardana, explains in this interview
'The consumer will reign'
Tata Power’s chief operating officer, Ashok Sethi, who has clocked 39 years with the company, shares his views on the organisation’s evolution
'We have to slog our assets'
There are challenges as well as opportunities on the path that Tata Power has chosen to take, says chief financial officer Ramesh Subramanyam
'A climate of respect is vital'
Chief culture officer and head of business excellence and transformation, Vivek Talwar, on what makes Tata Power a sustainable organisation
'People policies are linked to the company's strategy'
Employee engagement is critical to improve staff morale and the sense of belonging in the company, says human resources head Chetan Tolia
The going is green
A presence across hydro, wind, solar and geothermal makes it easier for Tata Power to target a cleaner energy portfolio
Chain of excellence
From renewable power to consumer friendliness, Tata Power’s associate entities have set the standard for the industry
For country and community, in the spirit of giving back
The corporate social responsibility initiatives of Tata Power have made a tremendous difference, in a wide variety of ways, to the lives of the countless people they have touched
From dependable to adaptable
Tata Power has grown spectacularly in scale and spread thanks to its ability to reinvent itself, says Adi Engineer
When 'farmers' became 'hunters'
Where once reliability and continuity were prized, Tata Power has moved on to find its balance and to flourish in a business arena rendered volatile, writes Firdose Vandrevala
'It was easier to run back then'
KM Gherda remembers the days of Tata Electric Companies, of ‘reasonable returns’ and a business where the big complexity was accounting for three rather than one
A pioneer all the way through
FC Kohli on the company where he made his mark as an information technology whiz, at a time when government permission was needed to get computers installed