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
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|
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
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