The availability of land, readiness of the power purchase agreement (PPA), and completion of the balance of plant (BoP) contracts ensure that there will be no delays in executing the project, according to the CEO’s comments to BusinessLine following the order announcement.
This order is a significant achievement for Suzlon as it brings in a new customer segment—public sector undertakings (PSUs)—in addition to their existing clients, which include utilities, commercial and industrial customers (C&I), and retail clients such as textile mills.
For several years, Suzlon was unable to participate in PSU tenders due to eligibility requirements like net worth.
Highlighting that the current order is from the country’s largest power utility to its largest wind turbine manufacturer, Chalasani expressed optimism about the future. He noted that while future contracts will be secured through a bidding process, this order marks the beginning of a promising long-term relationship with NTPC. Additionally, NTPC Green has issued a new tender for 6 GW as part of its goal to achieve a total renewable energy capacity of 60 GW by 2032.
Chalasani emphasized that for India to meet its 500 GW renewable energy target by 2030, it is crucial to engage in planning. This ensures that land, infrastructure, and balance of plant (BoP) arrangements are in place, helping to avoid the common issues of delays in the power purchase agreement (PPA) signings and project setbacks due to BoP slippage.
Chalasani detailed that the order comprises three distinct contracts: (1) supply and transportation, (2) civil foundation, erection, and commissioning, and (3) operations and maintenance (O&M) for ten years.
Although Suzlon has not disclosed the order’s total value, the market rate for wind turbines is approximately ₹6 crore per MW, excluding erection, commissioning, and O&M services.
Unlike other market orders where O&M starts after the warranty period, the O&M contract for this NTPC order begins immediately. O&M is a high-margin sector. Suzlon Energy is merging its O&M division, Suzlon Global, with itself and recently acquired a 51% stake in Renom, an independent O&M firm, with plans to increase this stake. Suzlon Global will handle maintenance for Suzlon’s turbines, while Renom will manage non-Suzlon machines.
With this order, Suzlon’s order book now totals nearly 5 GW, which should keep the factory operational through this year and next. The NTPC Green project must be completed within 16-18 months, requiring machine delivery within the next 12 months.
