CESC Ltd, the flagship company of the RP-Sanjiv Goenka Group, is going to invest ₹4,500 crore in Odisha to set up a solar cell and solar module manufacturing facility, supplementing the conglomerate’s foray into the renewable energy segment.
The project will come up in Dhenkanal district of the state, where a 3-gigawatt (GW) solar cell, a 3 GW solar module, an advanced chemistry battery cell pack of 5 GW and advanced solar components, along with a 60-megawatt captive power plant, will come up in phases.
The project will be carried out by CESC Green Power Ltd, a subsidiary of Calcutta-headquartered CESC, which has received the in-principle approval of the high-level clearance authority of the Odisha government earlier this month.
The Odisha project marks yet another investment commitment from the RPSG Group to spread its business activities outside Bengal, the home-base of the conglomerate. The upcoming renewable power generation sites of CESC of 3.2 GW capacity are spread across southern and western states of India. However, the company earns more than half of its net profit at the consolidated level from its Calcutta operation.
The announcement of the Odisha project comes close on the heels of RPSG Solvanta, the solar manufacturing wing of the group, announcing the commissioning of a 1 GW solar module manufacturing site in Jaipur in October.
In September, the RPSG Group received a letter of intent from Yamuna Expressway Industrial Development Authority (YEIDA) in Uttar Pradesh for a 3 GW solar cell manufacturing unit.
The rapid push from CESC, which has for decades been dependent on coal-based thermal power, comes at a time when industry experts have warned of overcapacity in the sector. While India’s module production capacity is expected to increase to 165 GW, the country’s solar project installations are likely to be around 45-50 GW, leading to a potential overcapacity.
The overcapacity may lead to consolidation, which maybenefit a financially stable group such as RPSG.