Sterling & Wilson Renewable Energy Ltd Management Discussions

ECONOMIC REVIEW

Global Economy

Global economic activity is experiencing a broad-based and sharper-than-expected slowdown, with inflation higher than seen in several decades. The cost-of-living crisis, tightening financial conditions in most regions, Russias invasion of Ukraine, and the lingering COVID-19 pandemic continue to weigh heavily on the outlook.

Russias invasion of Ukraine stoked inflationary concerns as supply chain disruptions remained a threat. Food and energy prices are likely to be volatile even as interest rates in most parts of the world are on the rise. Structural reforms across economies can further support the fight against inflation by improving productivity and easing supply constraints, while multi-lateral cooperation is necessary for fast-tracking the green energy transition and preventing fragmentation. The International Monetary Fund believes the worst of the economic pain is yet to come.

 

https://www.imf.org/en/Publications/WEO/Issues/2022/10/11/ world-economic-outlook-october-2022

https://www.forbesindia.com/article/take-one-big-story-of-the-day/dawn-of-2023-a-cautious-world-economy/82093/1

Outlook

Global growth is expected to fall to 2.9% in 2023, but will rise to 3.1% in 2024. The forecast of January 2023 World Economic Outlook Update is 0.2% higher than that predicted in the October 2022 World Economic Outlook, but below the historical average of 3.8%. Chinas recent reopening has paved the way for a faster-than-expected recovery. Global headline inflation is set to fall from 8.7% in 2022 to 7.0% in 2023 on the back of lower commodity prices.

 

https://www.imf.org/en/Publications/WEO/Issues/2022/10/11/ world-economic-outlook-october-2022

Monetary policy should stay the course to restore price stability, and fiscal policy should aim to alleviate the cost-of-living pressures, while maintaining a sufficiently tight stance aligned with monetary policy.

The 10-year economic outlook signals a prolonged period of disruptions and uncertainties for businesses, but there are also opportunities. Global growth will return to its slowing trajectory once the 2022-2023 regional recessions end, with mature markets making smaller contributions to global GDP over the next decade. Keys to ensuring growth over the longer term include developing new lines of business; strengthening corporate culture; embracing digital transformation and automation; recruiting for talent with new skills not currently represented in the company; and maximising the hybrid work model.

 

https://www.conference-board.org/topics/global-economic-outlook

Indian Economy

India is expected to grow between 6.5% and 6.9% in FY 2022-23, which is relatively stronger in comparison to other large economies and its emerging market peers. In its credit policy meeting in December, Indias central bank reduced its growth forecast for FY2023 to 6.8% from its earlier estimate of 7.8%. India is already the fastest-growing economy in the world, having clocked 5.5% average GDP growth over the past decade. Now, three megatrends – global offshoring, digitalisation and energy transition – are setting the scene for unprecedented economic growth in the country of more than 1 billion people.

Outlook

Despite the challenges, India is gaining power in the world order and is on track to become the worlds third largest economy by 2027, surpassing Japan and Germany, and have the third largest stock market by 2030, thanks to global trends and key investments the country has made in technology and energy. Indias GDP is likely to more than double from US$ 3.5 trillion today to surpass US$ 7.5 trillion by 2031. A Morgan Stanley report predicts that India will be one of the only three economies in the world that can generate more than US$ 400 billion annual economic output growth from 2023 onwards, and this will rise to more than US$ 500 billion after 2028.

 

https://www.morganstanley.com/ideas/investment-opportunities-i n - i n d i a # : ~ : t e x t = I n d i a % 2 0 i s % 2 0 a l r e a d y % 2 0 t h e % 2 0 fastest,more%20than%201%20billion%20people.

Full achievement of all climate pledges would move the world towards safer ground, but there is still a large gap between todays pledges and a stabilisation of the rise in global temperatures around 1.5?C.

INDUSTRY OVERVIEW

Global Energy Review

The global energy crisis triggered by Russias invasion of Ukraine is causing profound and long-lasting changes that have the potential to hasten the transition to a more sustainable and secure energy system. "Energy markets and policies have changed, not just for the time being, but for decades to come," said IEA Executive Director Fatih Birol. Even with todays policy settings, the energy world is shifting dramatically before our eyes. Government responses around the world promise to make this a historic and definitive turning point towards a cleaner, more affordable and more secure energy system.

Global fossil fuel use has grown alongside GDP since the start of the Industrial Revolution in the 18th century: putting this rise into reverse will be a pivotal moment in energy history. The share of fossil fuels in the global energy mix in the Stated Policies Scenario falls from around 80% to just above 60% by 2050. Global CO2 emissions fall back slowly from a high point of 37 billion tonnes per year to 32 billion tonnes by 2050. This would be associated with a rise of around 2.5?C in global average temperatures by 2100, far from enough to avoid severe climate change impacts. Full achievement of all climate pledges would move the world towards safer ground, but there is still a large gap between todays pledges and a stabilisation of the rise in global temperatures around 1.5?C.

 

https://www.iea.org/news/world-energy-outlook-2022-shows-the-global-energy-crisis-can-be-a-historic-turning-point-towards-a-cleaner-and-more-secure-future

Global Renewable Energy Industry

Amid the major changes taking place, a new energy security paradigm is needed to ensure reliability and affordability while reducing emissions. The declining fossil fuel and expanding clean energy systems co-exist, since both systems are required to function well during energy transitions in order to deliver the energy services needed by consumers. And as the world moves on from todays energy crisis, it needs to avoid new vulnerabilities arising from high and volatile critical mineral prices or highly concentrated clean energy supply chains.

Stronger policies will be essential to drive the huge increase in energy investment that is needed to reduce the risks of future price spikes and volatility, according to this years WEO. Subdued investment due to lower prices in the 2015-2020 period made the energy sector much more vulnerable to the sort of disruptions we have seen in 2022. While clean energy investment rises above US$ 2 trillion by 2030 in the States Policies Scenario, it would need to be above US$ 4 trillion by the same date in the Net Zero Emissions by 2050 Scenario, highlighting the need to attract new investors to the energy sector. Major international efforts are still urgently required to narrow the worrying divide in clean energy investment levels between advanced economies and emerging and developing economies.

The environmental case for clean energy needed no reinforcement, but the economic arguments in favour of cost-competitive and affordable clean technologies are now stronger and so is the energy security case. Todays alignment of economic, climate and security priorities has already started to move the dial towards a better outcome for the worlds people and for the planet.

 

https://www.iea.org/news/world-energy-outlook-2022-shows-the-global-energy-crisis-can-be-a-historic-turning-point-towards-a-cleaner-and-more-secure-future

Projected Growth in Global Renewable Energy Market

Powering a Safer Future with Renewable Energy

Fossil fuels, such as coal, oil and gas, are by far the largest contributor to global climate change, accounting for over 75% of global greenhouse gas emissions and nearly 90% of all carbon dioxide emissions. The science is clear: to avoid the worst impacts of climate change, emissions need to be reduced by almost half by 2030 and reach Net Zero by 2050. To achieve this, we need to end our reliance on fossil fuels and invest in alternative sources of energy that are clean, accessible, affordable, sustainable, and reliable. Renewable energy sources – which are available in abundance all around us, provided by the sun, wind, water, waste, and heat from the Earth – are replenished by nature and emit little to no greenhouse gases or pollutants into the air. Fossil fuels still account for more than 80% of global energy production, but cleaner sources of energy are gaining ground. Globally, the share of renewables in global electricity generation has jumped to 29% in 2020, up from 27% in 2019, and since then, renewable electricity generation is set to expand further.

 

https://www.un.org/en/climatechange/raisin g-ambition/ renewable-energy#:~:text=Cheap%20electricity%20from%20 renewable%20sources,helping%20to%20mitigate%20climate%20 change.

The New Era of Renewable Energy – Key Challenges

Renewable energy developers have to navigate an increasingly complex and competitive landscape. Specifically, they need to focus on and address four emerging challenges. Developers need to act decisively to prepare for these upcoming challenges.

1. Scarcity of top-quality land

Developers are in a constant scramble to identify new sites with increasing speed. An analysis of Germany, a country aiming to nearly double its share of electricity coming from renewables by 2030, offers a glimpse into the constraints. Of the 51% land potentially suitable for onshore wind farms, regulatory, environmental, and technical constraints eliminate all but 9%. Meeting capacity targets will mean adding wind turbines to 4% to 6% of the country, giving developers little room for error.

2. A blue-collar and white-collar labour shortage

A cross economies, the "Great Attrition" is making difficult for companies to find and keep employees. Since April 2021, 20 million to 25 million US workers have quit their jobs, and 40% of employees globally say they are at least somewhat likely to leave their current position in the next three to six months. This environment presents a particularly acute challenge for industries such as renewable energy, where specific technical expertise and experience are crucial elements of success. For instance, analysis suggests that between now and 2030, the global renewables industry will need an additional 1.1 million blue-collar workers to develop and construct wind and solar plants, and another 1.7 million to operate and maintain them. This includes construction labourers, electricians, truck and semitrailer drivers, and operating engineers.

3. Supply chain pressures

The soaring cost of steel, manufacturing disruptions caused by extended lockdowns in China, and transportation backlogs at ports are already making it difficult for wind and solar developers to complete projects in their pipeline on time and on budget. Some of these pressures will abate as others move to the forefront. For example, many of the raw materials needed to manufacture solar panels and wind turbines are projected to be in short supply. This includes nickel, copper, and rare earth metals such as neodymium and praseodymium, which are indispensable for the creation of magnets used in wind turbine generators.

4. Pressure on profits and volatility of returns in short term it The increasing number of players moving into the renewable-development space, combined with reduced levels of government support and higher costs of materials, technology, and financing, is putting pressure on returns. At the same time, an all-time-high price volatility creates uncertainty and market risk.

 

https://www. mckinsey.com/industries/electri c-power-a nd - n a t u r a l - g a s / o ur - i n s i g h t s / r e n e w a b le - e n e r g y-development-in-a-net-zero-world

Global Renewable Energy Targets

According to the IEA, almost two-thirds of electricity generation needs to be renewable by 2030 to set the world up to achieve the 2050 Paris Agreement target. This means adding 12% more renewable generating capacity each year over the next eight years – double the current rate. Much faster deployment of all renewable technologies will be needed to put the world on track with the Net Zero Emissions by 2050 Scenario.

 

Renewable Energy – Market Size in 2021 vs Forecast for 2030

India scripts its Renewable Energy Future

Home to about 1.4 billion people and one of the fastest growing economies in the world, India has solidified its position as a leader in renewable energy. As of 2021, Indias 147 GW of installed renewable energy capacity makes it the fourth-leading nation in renewable power capacity worldwide. Moreover, the Asian countrys electricity production from renewable sources nearly doubled between 2011 and 2021. Despite these developments, Indias overall energy mix is still dominated by thermal energy from coal and oil. However, the energy sector will see a shift towards renewables in the future. At the 2021 COP26 climate summit in Glasgow, Prime Minister Narendra Modi laid out Indias plans for an additional 500 GW of renewable energy capacity by 2030. This goal is to be met mainly by significant increases in nationwide wind and solar installations.

 

https://www.statista.com/topics/9608/renewabl e-energy-in-india/#topicOverview

Making India Net Zero by 2070

During the year, India submitted its long-term climate action strategy to the United Nations Framework Convention on Climate Change (UNFCCC) at UN Climate Conference (COP27), joining a select list of countries that have articulated how they will achieve their net zero emissions goal in the long term. India updated its nationally determined contribution (NDC) under the Paris Agreement to the United Nations apex body in August 2022, with two broad quantifiable goals – that India will reduce the emissions intensity of its GDP by 45% from 2005 levels by the year 2030; and achieve about 50% cumulative electric power installed capacity from non-fossil fuel-based energy resources by 2030. The overall climate finance requirement by 2050 to achieve net zero emissions by 2070 will be in the order of tens of billions of dollars and around 85.6 trillion by 2030 for Indias adaptation needs.

 

https://www.hindustantimes.com/india-news/cop27-india-unveils-strategy-for-net-zero-goal-by-2070-takes-moral-high-ground-101668447611871.html

Hybrid Energy Systems – A Game Changer in Indias Renewable Energy Space

Renewable hybrids can play a key role in helping India accelerate the decarbonisation of power generation and lowering the cost of electricity in the medium term. Indias ministry of new and renewable energy released a solar-wind hybrid policy in 2018, which provides a framework to promote grid-connected hybrid energy through set-ups that can use land and transmission infrastructure optimally and also manage the variability of renewable resources.

The industry expects an annual capacity addition of 10-15 GW for Wind and Solar in the next three years, facilitating India to reach its ambitious target of generating 500 GW by 2030 and meet 50% of energy requirement from Renewable Energy. Renewable hybrids can be a viable solution to meet future baseload power requirements at zero carbon emissions. It can combine wind and solar, with an additional resource of generation or storage. Hybrid is backed by grid and storage capacities and enables round-the-clock availability of renewable power, ease in scheduling hybrid projects and optimal utilisation of common infrastructure.

 

(https://www.mckinsey.com/capabilities/sustainability/ our-insights /sustainability-blog/renewable-hybrid-energy-systems-as-a-game-changer-in-india)

Global Solar Power Industry – An Overview

Solar Energy – Energy of the Future

The global solar power market size, which was valued at US$ 197.23 billion in 2021, is expected to hit around US$ 368.63 billion by 2030, and is poised to grow at a compound annual growth rate (CAGR) of 7.2% during the forecast period 2021 to 2030. Rising energy needs, falling costs, persistent energy deficit, heavy subsidies from the government, preference for eco-friendly technology are some of the key reasons for the rising demand for solar energy.

One of the prominent factors contributing towards the growth of the global solar power market is the growing prices of fossil fuels. The growing environmental concerns regarding greenhouse gases and carbon emissions. In addition, the increasing government initiatives and favourable policies in order to curb the adverse effects of the toxic gas emissions is driving the growth of the global solar power market during the forecast period.

Favourable government policies and increasing adoption of solar PV systems, with declining prices of solar panels and installation cost, are likely to support the global solar energy market. Other factors such as rising adoption of alternate clean power sources, like gas-fired power plants, onshore and offshore wind projects are likely to hinder market growth. Nevertheless, an increase in off-grid solar utilisation due to the decreasing cost of solar PV equipment and supportive global initiatives to eliminate carbon emissions are expected to create several market opportunities in the future. Due to its increasing solar installations, the Asia-Pacific region has dominated the solar energy market in the past few years and is expected to be the largest and fastest-growing region in the solar energy market during the forecast period.

 

https://www.mordorintelligence.com/industry-reports/solar-energy-market

Emerging economies have significantly increased the production of solar technologies owing to governmental tariffs, and merger and acquisition of local manufacturers. Moreover, North America and Europe have largely focussed on research to maximise the solar potential. Middle East and Africa have also gained traction owing to increase in applications of solar energy for power generation, agriculture, and architecture.

Key challenges during the year

One of the significant challenges that the solar industry faces is that solar panels can convert a tiny percentage of sunlight into energy. The reliability of the solar panels is also an issue, especially in those geographical areas where sunlight is not available in abundance. Challenges that the solar sector faces are in the form of: high manufacturing costs, diverse supply across states, need for increase in government cooperation, inefficient financing infrastructure, lack of consumer awareness, and an overall lack of uniform standards.

Some of the key challenges:

High manufacturing cost

Due to the high cost of solar power generation, a lot of the premium equipment used in a solar power plant had to be imported. The high module prices, along with other teething problems such as central and state policies and land issues contributed to the slow growth of the solar industry. It was from the year 2014 that there was a noticeable growth in the solar industry, thanks to the reducing cost of equipment owing to equipment used by Indian manufacturers. However, trying to compete with Chinas strong manufacturing base still poses a huge challenge.

Waste management

Any growing industry will produce waste and solar is no exception. Even though solar modules and other equipment have a life of about 25 odd years, the modules do get damaged and need to be disposed of. This contributes to the solar waste in the country. Currently, India does not have a solar waste disposal policy and needs one on the lines of e-waste, where the guidelines are set for proper disposal or recycling of waste generated by the solar industry.

Land availability

One of biggest challenges in the solar sector is the availability of land. Solar PV plants require a large amount of contiguous land to set up. This is particularly challenging in a country like India, given the land ownership issues, local politics, and terrains.

India Solar Energy Market

The world is rapidly switching to renewable energy. As climate change is causing huge shifts in the industry, countries are trying to decarbonise the energy sector by 2050. In India, with about 300 sunny days a year, the solar incidence can reach up to 5 EWh/year. It is also estimated that the solar energy available in a single year exceeds the possible energy output of all of the fossil fuel energy reserves in India.

India is well positioned to take climate leadership as a prime example on the possibilities of enabling clean power generation by unleashing solar power. Solar energy dominated Indias power generation capacity growth in 2022. The country added 13.9 GW of solar capacity in 2022, which is as much solar capacity as UKs entire solar fleet in 2021. With this, the total solar capacity in India stood at ~62 GW. Rajasthan and Gujarat, the top two states in solar deployments, together added 8.6 GW in 2022, slightly more than Turkeys entire solar fleet in 2021. Installations in all other states combined were also sizable at 5.3 GW, larger than Chiles entire solar fleet.

 

(https://ember-climate.org/insights/research/india-data-story-2023/)

As per the recent Union Budget for FY 2023-24, India has massive plans to boost its green energy production through solar projects and reduce its dependence on fossil fuels. Owing to a strong commitment from the Indian government, Indias future in solar energy is looking much brighter.

Despite India receiving an abundance of sunlight, the potential of this energy was not tapped into for a very long time. The shift came about when the concerned authorities looked at the demand for electricity across India and the shortfalls from conventional sources. Policies to ensure optimum utilisation of this natural resource were put into place and it has been on onward journey ever since. To give context to the energy shortfall – the demand supply gap of electricity is around 12% of the overall energy demand.

Rising demand and growth in Indian solar market

Indias solar energy sector has experienced incredible growth during the last few years. After having installed 60 GW of solar energy over the past few years, India still has a pipeline of about 58 GW utility-scale projects. This demonstrates the solar industrys rapid expansion and steady development, making it a competitive alternative for the country.

According to studies, by 2040, Indias portion of the worlds total primary energy demand is expected to approximately quadruple to 11%. In order to fulfil this enormous increase in demand while also keeping its promise to cut its carbon footprint by 35% from 2005 levels, India will need to treble its power generation by 2030. The demand for energy will soar as the countrys economy expands quickly and turns into a global industrial powerhouse.

Indias rising demand for solar energy

Factors influencing the future of Solar Energy in India

Foreign Direct Investment

Inhibiting foreign direct investment (FDI) is one of the most significant and essential measures in boosting the industry and speeding up the expansion of Indian enterprises investing in solar energy. Making the nation more conducive to manufacturing, providing tax breaks, and subsidies can aid in the countrys solar energy sectors rapid expansion. This will not only benefit the businesses, but also demonstrate how Indias overall solar energy industry can flourish. The sector needs to be integrated backward, and the government should promote companies in remaining innovative and achieving greater results.

Role of private sector in promoting renewable energy

As India witnessed a coal crisis in 2021, resulting in high pricing at the power exchange, the large corporations changed course and focussed on more affordable, reliable, and clean renewable energy sources. This demonstrates that in addition to the fact that renewable energy projects have a far greater return on investment, economics drives these decisions. The growth of the solar sector is largely driven by private players. Private businesses are preparing to engage in the renewable energy sector since it promises a faster return on investment than fossil fuel-based energy does.

Geographical advantage

India benefits greatly from its position as it is in a tropical area, which is advantageous for the solar energy sector. It receives a tremendous amount of solar energy all-year long, which equates to almost 3,000 long hours of sunshine per year. India is thus able to help other nations in addition to meeting its own energy needs, owing to its extensive solar energy potential. Additionally, some states in the country also have the capacity to produce a significant amount of energy even on cloudy days.

Sector to promote Indias AtmaNirbhar mission

For the import of several solar applications, such as solar inverters and solar batteries, among others, India is heavily reliant on China. The governments policies are intended to make India less dependent and more self-reliant. In 2021, the Finance Ministry imposed a customs duty hike on solar inverters from 5% to 20% and solar lanterns from 5% to 15% to encourage domestic production of the solar inverters, increase the independence of manufacturers, combat the high cost of solar equipment and develop a strong local solar manufacturing ecosystem. India also needs prompt action to become self-sufficient by motivating and assisting domestic manufacturers to abandon reliance on imports and turn truly AtmaNirbhar. In order to promote growth and get India closer to meeting these goals, suitable government policies in favour of the renewable energy sector need to be implemented swiftly and efficiently.

Declining cost of solar energy sources – A key trend

In the past, high cost and intermittency affected the adoption of renewable sources of energy in India. The intermittent nature of solar energy can be overcome by integrating energy storage with the system, which increases the adoption of renewable energy in hybrid systems. Renewable energy prices in India have been reducing gradually. The Government of India is also providing tax incentives to users, which reduces the installation costs and results in the reduction of the final cost of solar energy. As a result, solar power has been giving tough competition to fossil fuels such as coal-based power in the country. India imports solar panels from China at significantly low prices, which is expected to spur the demand for solar power systems, and also for solar energy among all other renewable sources. Hence, declining costs of solar energy will drive the growth of the solar power market in India.

Global Solar EPC Industry

The global solar EPC market size, which exceeded US$ 133 billion in 2019, is estimated to reach US$ 158 billion by 2026, expanding at a CAGR of 2.5% during the forecast period. It is anticipated to surpass an annual installation of 100 GW by 2025

 

https://dataintelo.com/report/solar-engineering-procurement-and-construction-epc-market/

Favourable government initiatives including subsidies, FiT, leveraging schemes, investment tax credits and tax rebates have instituted a favourable business scenario. In addition, the restructuring of trade policies and investment flow across developing regions will augment the overall market growth. A significant decline in the cost of plant components has positively influenced the technological deployment.

 

https://www.gminsights.com/industry-analysis/solar-epc-market

Geography-wise Outlook

United States

The solar EPC market in the United States is predicted to grow over US$ 14 billion by 2025. Government mandates to reduce dependence on fossil fuels, coupled with positive financial mechanism to encourage installation of sustainable energy technologies will complement the product demand. Growing fund flow to replace existing plants with clean energy technologies will further enhance the business portfolio. In US, labour cost increased due to shortage of labour supply and had led to a decline in margins.

 

https://www.gminsights.com/industry-analysis/solar-epc-market

Europe

The solar EPC market in Europe is projected to grow on account of favourable government inclination towards the adoption of sustainable technologies across the regions net energy mix. Positive government measures with plans to reduce GHG emissions coupled with strict energy efficiency norms will further escalate business growth.

 

https://www.gminsights.com/industry-analysis/solar-epc-market

Asia Pacific

The solar EPC market in Asia Pacific region has witnessed growth owing to favourable regulatory reforms and rising renewable investments across the region. Favourable government support programs, renewable integration targets, self-consumption schemes, investment subsidies and similar regulatory reforms have significantly strengthened the industrial peripheral. Rapid economic growth across the developing nations, and growing energy demand across emerging electricity markets has further fostered the business outlook.

 

https://www.gminsights.com/industry-analysis/solar-epc-market

Middle East and North Africa (MENA)

MENA region has one of the worlds highest solar irradiances. The region is expected to have added 5.6 GW of installed capacity from renewables in 2022, nearly double the 3 GW which came online in 2021. By 2026, the region is expected to add 33 GW by installed capacity of renewables, with around

26 GW as utility and distributed solar PV, according to a report published by Arab Petroleum Investments Corporation (APICORP). According to APICORP, MENA countries must rapidly scale up and integrate variable renewable energy targets in the medium term.

The region is planning over 73 GW of new utility scale solar and wind power projects, a five-fold increase in its current capacity. The central drivers behind the size of the regions utility-scale solar projects are trifold. First, the region is looking to capitalise on the demand for energy storage. Second, it is looking to become a transcontinental node for renewable energy exports, especially given the increasing urgency with which European countries seek alternatives to gas imports. Third, the region is poised to reap the benefits of its favourable conditions for building renewable projects.

Investment in MENAs power sector is seen exceeding US$ 250 billion, the highest of all energy sectors. Of these, nearly US$ 60 billion worth of power projects are being developed in Saudi Arabia, followed by Egypt were US$ 37 billion worth of power projects.

 

h t t p s : / / m e r c o m i n d i a . c o m / m e n a - r e g i o n - g r o w - u t i l i t y -wind-solar-2030/

https://www.pv-magazine.com/2023/01/17/menas-leading-solar-pv-markets/

Australia

Australia is leading the world in the uptake of solar with photovoltaic installations generating over 12% of the nations electricity in 2021. The share of solar and wind in Australias energy market has increased from 13% earlier to 22% in 2021, driven by the rising number of residential and commercial rooftop solar installations. The government aims to have 82% renewables in the national electricity market by 2030.

 

https://www.energymatters.com.au/renewable-news/2022-a-year-in-review-solar-in-australia/

The recent election in Australia has been a game changer in terms of policy support for renewable energy. The new Labour governments target is of 82% renewables and a number of multi gigawatt project proposals. The government is expected to unlock renewables investment, upgrade the grid and bring federal policies more in line with states and territories with ambitious climate goals.

Solar is clearly going to be a big part of Australias renewable energy future. The country is already installing 4 GW of solar photovoltaic capacity a year, and annual installation is predicted to triple by 2050. With the country having a sizeable solar EPC market, it has a golden opportunity to expand solar manufacturing products as the industry booms and the countries scramble to cut their over-dependence on China. The COVID-19 pandemic helped spur demand for more local manufacturing capability, giving an impetus to domestic production capability.

 

https://www.theguardian.com/environment/2022/sep/25/australia-has-a-golden-opportunity-to-expand-solar-energy-manufacturing

As Australia shifts away from fossil fuels towards renewable power, skilled labour shortage has been an issue the country faces for many years, with the COVID-19 pandemic having exacerbated the problem. The surge in size and scope of proposed large-scale solar projects has added an extra element to the equation. Today, securing skilled labour is one of the key challenges confronting the solar EPC industry in Australia, and this is putting development of new large-scale solar farms under strain. Solar EPC players are struggling to find resources to service the solar projects. The growing skills shortage in the country is described as a "public infrastructure workforce crisis".

 

https://www.pv-magazine.com/2022/04/01/epc-giant-says-australian-large-scale-solar-faces-workforce-shortage/

India

The Indian solar EPC market reported good growth during the year as several EPC projects, both government and private, took off. Enabling policies, incentives and subsidies backed by the government further accelerated and facilitated these projects. The Green Open Access Policy, 2022, was a huge victory for the solar EPC market. Several new players jumped in, indicating a thriving solar market with numerous opportunities. The Union Budget FY 2022-23 providing a budgetary allocation of

3,365 crore for the solar power sector entailed off-grid solar projects.

During the first half of CY 2022, India installed approximately 7.2 GW of solar projects, that is more than 50% increase year-on-year, indicating a thriving solar market with numerous opportunities. And by the end of the year, India ranked 4th in the world for solar deployment by adding a total installed capacity of 61.97 GW. Around 85% of this was achieved by utility-scale projects, indicating tremendous growth as leading EPC players line up projects. Enabling policies, incentives and subsidies backed by the government further accelerated and facilitated these projects.

This is remarkable as India targets renewable energy installation of 500 GW by 2030. Rooftop solar is also being revamped to help India achieve the 2030 target. The country also witnessed the establishment of several floating solar power projects during the year.

Going forward, in FY2024, all the segments in the EPC market are estimated to grow, be it residential, commercial or industrial. The emergence of a new technological trend expected in the EPC sector will be the use of innovation that can increase efficiency in EPC. For example, blockchain technology can provide a more secure and fast-moving workflow that allows all the involved parties to improve productivity.

Further, there is a need for state regulators to work on easy adoption, awareness programs and take various policy measures to attract more residential, C&I segments to adopt RTS and central simplified subsidy scheme launched. Other foreseeable key trends are Open Access Solar Parks, Agrivoltaics, Floating Solar Power Plant and Off-grid Solar Systems.

 

https://www.saurenergy.com/solar-energy-news/solar-epc-after-strong-2022-industry-looks-ahead-to-continuity-in-2023#:~:text=The%20EPC%20market%20reported%20 good,50%25%20increase%20year%20on%20year.

Global Solar O&M Industry

The global non-residential solar operations & maintenance (O&M) business is predicted to more than double to US$ 9 billion by 2025 from being a US$ 4 billion market in 2019, according to global research & analytics firm Wood Mackenzie. A steady growth in the global solar power industry has led to an unprecedented and rising demand for O&M services. As the solar O&M story continues to be on a growth path, cutting-edge technologies have the potential to optimise critical components, stay competitive and revolutionise the solar O&M industry.

Total global solar installed capacity is expected to reach 2.2 terawatts by 2030. That means rapid growth for the solar O&M sector over the next decade. The global energy consultancy Wood Mackenzie estimates a total 2030 market opportunity of US$15 billion, which is nearly a four-fold increase on 2020 figures. According to the market research company, in the Asia Pacific (APAC) region, the market will reach US$ 4.1 billion, in Europe, the Middle East and Africa (EMEA) US$ 3.5 billion, and in the Americas US$ 1.8 billion.

To further develop the O&M market, performance indicators and standard O&M operator services, the International Energy Agency Photovoltaic Power System Programme (IEA-PVPS) has published new guidelines. This is aimed at helping PV asset owners with climate-specific O&M programmes for four climatic zones – moderate, hot and dry, hot and humid, and deserts at high elevation areas. The report also presents guidelines for monitoring and forecasting, as well as technical toolstoanalysePVplantperformanceandsafety.Acombination of well-designed O&M specifications, proactive monitoring systems and a flexible and tailored O&M regime that considers both possible weather impacts on systems, as well as possible changes to grid requirements are good practices to ensure that PV systems perform according to or even beyond expected lifespans.

 

https://www.pv-magazine.com/2022/11/03/new-standardized-guidelines-for-solar-om/

India Solar O&M market

With solar energy playing a noteworthy role in Indias energy transition too, an ever-appealing opportunity transcends the solar O&M industry. Indias solar footprint has matured from 3.7 GW in 2015 to ~62 GW in FY2022. With this, domestic solar O&M has emerged as a separate market with its own landscape and dynamics. As more and more solar plants get stable, an increasing number of O&M contracts are getting re-tendered, presenting a growing opportunity for O&M providers.

A typical Solar PV plant has lifespan of over 20 years. With lowering tariffs in India, the O&M of the plant has become more critical to ensure overall profitability of the plant and can impact the project IRRs significantly. The O&M market in India has matured significantly over the last few years. While the plant sizes are increasing, the developers are also expecting better performance levels. There is an increased requirement of higher performance guarantee and plant availability numbers. This, coupled with reducing price expectations, is making the market highly competitive. Best-in-class service offerings, aligned with customer expectations, at competitive pricing are becoming the order of the day.

Key Challenges

Grid issues is one of the major challenges affecting O&M in India, resulting from grid throttling, grid variations and instability, which eventually results in equipment under performance and increased downtime. With reducing prices, there is an increasing pressure to optimise processes to in-turn optimise costs. Security is the biggest contributor to the cost, followed by site manpower and module cleaning cost. Therefore, increased dependence on technological alternatives for plant surveillance, module cleaning and remote monitoring for plant performance will be critical to optimise critical cost components and stay competitive in the market.

COMPANY OVERVIEW

Sterling and Wilson Renewable Energy Limited (SWREL/ the Company) is a global pure-play, end-to-end renewable engineering, procurement and construction (EPC) solutions provider. Its key focus is to provide project design and engineering and to manage all aspects of project execution – from conceptualising to commissioning. It also provides Operations & Maintenance (O&M) services for own projects and those constructed by third parties.

With its presence spanning 29 countries and a pipeline of more than 5 GWp solar under development, SWREL will benefit from its partnership with RIL, which acquired 40% stake in SWREL during FY 2021-22 to take forward its renewable energy vision. While SWREL will benefit from Reliance Groups integrated new energy vision, its own engineering talent, deep domain knowledge, global presence and experience of executing some of the most complex projects on a global scale are making it of paramount importance for the Reliance solar value chain.

End-to-End solutions provider for Solar requirements

The Company is well placed to be the preferred EPC solutions provider globally, with its unparalleled global reach and presence, strong relationship with customers and lenders, and a well-established project execution experience.

Key Market Differentiators

Understanding of customers needs and excellent execution track record, coupled with world-class technology and O&M proficiency, differentiates us from other EPC players in the market.

Complete control over the project lifecycle

Market evaluation	• Precursor to bidding for new projects
	• Market research
	• Advance verbal deals with local suppliers and sub-contractors
Bidding evaluation, report preparation and bid submission	• Use of risk assessment matrix
	• Growth accretive projects approved
	• Bidding for viable projects for business continuity
Selection of suppliers and sub-contractors	• Good quality
	• Financial strength
	• Established market reputation
	• Background checks
Approval and finalisation of design	• Secure regulatory approval and permit
	• Design finalisation based on contractually agreed performance ratio
	• Improves performance, reduces potential risk factor, optimises costs
Procurement	• Approval based on 3-step quality management process
	• Use of good quality components
Construction, inspection and commissioning	• Standardised construction processes followed
	• Cost effective and efficient construction
	• Supervision of WIP
	• Adherence to safety protocols
	• Final inspection to agreed performance objectives are met
	• Handing over of plant post testing by commissioning team

Business Segments

The two primary business segments of the Company are Engineering Procurement and Construction (EPC) and Operations and Maintenance (O&M).

EPC Business

The Company provides a complete range of EPC solutions and end-to-end services and has a current EPC portfolio of 14.7 GWp. It is one of the leading solar EPC players across India, Africa, the Middle East, Australia and Latin America, and further consolidating its foothold in Europe and United States. With a focus on project design and engineering, it is capable of managing all aspects of project execution – from conceptualising to commissioning.

• Utility-Scale Solar

SWREL has wide experience in offering a range of comprehensive customised solutions including Turnkey, Balance of Systems (BoS) and packaged BoS. With successful execution of several landmark projects across the globe, it has demonstrated superior EPC capabilities.

• Floating Solar

SWREL is one of the first movers in the floating solar segment. It is ready to execute larger projects, having developed ample technological expertise in this segment.

Capabilities in Floating Solar

Anchoring and mooring	Project management and planning	Module and equipment floating structure installation
Maintenance manual	Design book issuance	Bathymetric and geotechnical assessment studies

• Hybrid and Energy Storage

SWREL is in a gainful position to leverage on the growth opportunity presented by the renewable energy industry. Given the rise in solar installations, it has developed a capable, technically sound and dedicated BESS team with vast experience in Storage Solutions. In collaboration with leading battery manufacturers and energy storage solution providers, it has developed in-house expertise in designing energy storage solutions and offering the right technology to cater to customers requirements and solutions efficiently and optimally.

O&M Business

SWREL is a global leader in O&M and asset management solutions, providing superior quality services to existing EPC projects and third-party customers. The O&M vertical is witnessing strong traction with a portfolio of 6.4 GWp with differentiated technologies. The portfolio has nearly doubled in the last four years. It contributes 9.5% to the Companys Total Revenue. The O&M projects deliver plant ROI by consistently surpassing performance guaranteed to its customers.

The segment provides a steady source of income to the Company, given its annuity-based contracts during the O&M service contract tenure, and an opportunity to earn better gross and net profit margins. With its strong EPC portfolio and client engagement, the Company leverages insurance and warranty in the O&M segment.

About 57% of the O&M portfolio of SWREL is from third-party contracts. The Company is gaining third-party O&M contracts for new-energy businesses too. It is already working on a hybrid solar and wind (battery and generation) project. In addition, it is also doing 140 MW Solar Floating Reservoir, which is one of the largest floating solar awarded for Tower Bridge.

R&D proficiencies

Yet another key advantage of SWRELs O&M vertical is one of its best technical teams with inhouse R&D, well supported by the Design Engineering team. It helps the Company maintain excellent relationships with all global IPPs and has over 146 solar plants under O&M, spread over multiple locations across time zones. It has an opportunity to further scale up the O&M business in these markets, when Defect Liability Period (DLP) ends in plants with existing EPCs. SWREL keeps track of such contracts in order to monetise the anti-incumbency sentiment.

Scaling higher

At SWREL, the O&M segment is scaling higher year-on-year, given its strong presence in the emerging markets and also in markets with historically built solar plants. It is working on scaling the O&M portfolio higher by adding at least 2 GW by FY2024, projecting good revenue visibility. Most of this 2 GW will be achieved by increasing third-party share in total O&M portfolio, which is 50%+ currently. The Company is further working on increasing its capacity by 35%. It is focussing on increasing its market share by identifying profitable opportunities in international markets through global customer mapping and also by leveraging strong partnerships with global IPPs.

Value-added services

The O&M team offers key market differentiators including drone thermography, strong analytics and predictions, underground cable fault finder. It also offers solutions for maximising and optimising plant generation performance. And it is continuously targeting customer expectation on generation – trying to achieve higher than target.

The Company also capitalises on the growing opportunities in the O&M market given its strong team of expert engineers, managers and data analytics with in-house R&D team and centralised monitoring platform and computerised maintenance management system. It provides flexibility to the developers by signing both short-term and long-term O&M contracts.

The NABL-certified mobile module testing lab in India and cutting-edge technological knowledge enables SWREL to leverage the O&M opportunity. The lab tests modules at the plant location and saves time and transportation costs. Its performance and due diligence team analyses and suggests measures for optimum plant performance.

Technology-driven and state-of-the-art systems

To gain a competitive edge in the market, the Company focusses on technology automation with an expert team and in-house resources to provide different type of services, without having to depend on the external resources. It works on different technologies to strengthen its predictive and preventive maintenance capabilities with different devices for sensing external faults. It replaces manual module installation with robots for large scale projects and automated cable laying. Technology driven O&M is a prerequisite to maximise Levelised Cost of Energy (LCOE).

AI/ML is the key differentiator for us – can predict target of generation on first day. AI will pick up data from SCADA, and with ML will predict downtime for maintenance.

Technological Innovations in FY 2022-23

• Central Monitoring System – Inhouse CMS and CMM Systems – plant can be monitored from anywhere; track plant performance through mobile phones o Conducting demo for visual monitoring of solar plants on Mobile/Laptop at Rajasthan o Thermo Graphic Camera installed for visual monitoring – can take 360-degree view for thermo signature of human beings

• A fter Dry Cleaning Robots, also adding Wet Cleaning Robots

• R obot on Trekker – to ensure better efficiency

• Automation in grass cutting with 5-times better efficiency – trial conducted on project site

• Planning to set up company to design Robots

Key Operational Highlights in FY 2022-23

• Bagged two orders worth over 4,000 crore from NTPC REL for solar PV projects at Khavda RE Power Park, Rann of Kutch, Gujarat. Scope of work for projects of 1,568 MWdc and 1,500 MWdc includes design, engineering, supply, construction, erection, testing, and commissioning along with a 3-year operation & maintenance contract.

• Signed MoU with government of Nigeria to develop and construct a portfolio of PV and battery energy storage system projects. With consortium partner Sun Africa, it will develop 961 MWp of solar at five locations with BESS with total installed capacity of 455 MWh.

• W on two utility-scale solar projects of 121.2 MWp each from Amplus Solar, worth 350 crore (including taxes and duties). This is the companys sixth consecutive project with Amplus Solar.

• W on a project of 60 MWp from Ampyr Renewable Energy, a new client. Scope of work comprises supply of complete BOS with 33/110 kV switch yard and robotic cleaning solutions.

• Bagged a new project of 260 MWdc from Serentica Renewables in Bikaner, Rajasthan. Scope of work for the project includes BOS with 33/110 kV switch yard including 2x120/150 MVA power transformer, trackers as per specifications and robotic cleaning solutions. Interestingly, use of higher Wp modules on trackers will be done for the first time in India.

• W on an order of 60 MWp from Sembcorp. Scope of work includes supply of BOS with Single Axis Tracker, Robotic Cleaning and free modules at site.

• Bagged an order for the O&M of 140 MWp floating solar project. This is SWRELs first large-scale floating solar O&M project and will add value to the companys operations credentials.

Business Review

During FY 2022-23, Total Revenue from Operations stood at 2,015.0 crore, compared with 5,198.9 crore in FY 2021-22, indicating a reduction of 61.2%. The EPC business contributed 90.5% to SWRELs overall revenue, while the remaining 9.5% was contributed by the O&M business. The Company continues to take efforts to minimise and optimise the overheads (fixed cost structure) and further improve its efficiencies. As on March 31, 2023, its unexecuted order book stood at 4,913 crore, while the total order inflow was 4,387 crore, compared to 719 crore in FY 2021-22. Customer concentration, in terms of contribution to total revenue, increased 44.34% in FY 2022-23, up from 38.49% in FY 2021-22.

The decrease in total revenue was primarily on account of certain cost provisions made, which impacted the percentage of completion and led to a revenue reversal in ongoing EPC projects, and lower contribution from the ongoing EPC projects. Gross margins remained suppressed primarily on account of international EPC projects.

Profitability was impacted as the industry witnessed high cost of solar modules, driven by increasing input cost primarily on account of silicon and supply chain issues such as shortage of shipping containers. Steel, which constitutes 5-10% of total cost of solar projects, witnessed an increase of 25% in cost during the period. Total expenses on construction material, stores and spare parts increased, and freight cost to India also increased, adversely impacting anticipated returns of solar power projects.

Particulars ( Crore)	FY 2022-23	FY 2021-22
Revenue from Operations	2,015.0	5,198.9
Other Income	110.9	94.7
Total Income	2,125.9	5,293.6
EBITDA	(1,023.5)	(859.3)
EBITDA Margin (%)	(50.8)	(16.5)
EBIT	(1,038.2)	(874)
EBIT Margin (%)	(51.5)	(16.8)
Net Profit	(1,174.9)	(915.8)
Net Profit Margin (%)	(58.3)	(17.6)
Cash generated from	(1,829.2)	(1,689.8)
operating activities
Earnings Per Share ()	(61.7)	(54.2)

EPC Business

Revenue of SWRELs EPC business decreased to 1,823.5 crore in FY 2022-23 from 4,974.5 crore in FY 2021-22. Demand for solar energy worldwide will continue to be driven by stronger policy support from the government, favourable policies for renewable sectors, and ambitious climate targets announced for COP26.

O&M Business

O&M business constituted 9.5% of total revenue at 189.9 crore, compared to 4.3% at 222.9 crore in FY 2021-22. EBIT margin stood at 4.8% in FY 2022-23, as compared to 24.9% in FY 2021-22. O&M gross margins were impacted by projects where O&M costs were incurred, however, revenue recognition in these projects has not commenced yet owing to the delay in final handover.

Key Ratios
Particulars ( Crore)	FY 2022-23	FY 2021-22
Debtors Turnover Ratio	2.56	6.37
Interest Coverage Ratio	(7.16)	(11.39)
Current Ratio	1.10	1.29
Debt-Equity Ratio	(8.39)	0.48
EBITDA Margin	(50.08%)	(16.52%)
Net Profit Margin	(58.31%)	(17.61%)
Return on Net Worth	(339.74%)	(116.02%)

Key Strategies for Growth

• T o offer added value to customers through early engagement

• T o address the growing opportunities in large markets

• T o aggressively pursue opportunities for Energy Storage and O&M business with existing customers

• T o strategically tie-up with suppliers for mega projects

• T o move to nearest sourcing avenues

• T o focus further on digitalisation in project execution and O&M

• T o further strengthen "SWREL" brand

Management Outlook

SWREL is on the course of delivering all its projects and creating an even stronger brand in the market. The RIL partnership, which underwrites its contracts, has added substantial financial strength to SWREL, which places it favourably to work on projects. It hopes to be the front-runner for carrying out solar EPC work to support RILs build-out.

The Companys Unexecuted Order Value stood at 4,913 crore as on March 31, 2023. The bid pipeline for FY 2023-24 remains robust at 22.9 GW, with 62.7% expected to be contributed by India. The Company is set to regain its position of the worlds largest solar EPC player by expanding new businesses, targeting large EPC markets and growing the O&M portfolio.

The Company is assessing its investment priorities and making serious commitments towards the sustainable targets. It is also planning to scale new heights and achieve goals in the Indian market, besides also supporting the country towards its plan of reducing carbon emissions. With this, the country is seeking a much larger footprint in India, having also won significant project wins during the year.

As it expands its operations, SWREL plans to use its project management skills and strong stakeholder relationships to become a global leader in the energy market of the future and benefit from the growth of green hydrogen.

Efforts to support solar manufacturing in India has seen the government increasing funding for a production-linked incentive scheme, while a 40% basic customs duty on solar modules and 25% duty on cells was introduced during the year. The basic customs duty is a step in the right direction to help Indias solar industry adopt a path of faster growth.

The Company is looking forward to increase its EPC offerings in the renewable space, which demonstrates huge opportunities and is seen as an enabler to deepen its relationships with customers in India and globally and provide a range of solutions to meet its overall renewable energy requirements. With the increased focus globally on low-carbon energy consumption and the resultant growing demand for green energy solutions, this is a logical extension of its business into the rapidly growing ESG space, and becoming a diversified renewables company.

Easing of PV module supply concerns, rise of alternate supply chainsandagigawatt-scalegrowinggreenhydrogenmarketwill drive short-term and medium-term growth for PV developers and EPC players. Despite some developers shying away from closing contracts because of uncertainty surrounding module pricing and supply chain issues, the current module supply constraints are expected to be a temporary disruption as more capacity additions will come onstream globally. However, the market is expected to be more robust during FY 2023-24.

Risk Management

Corresponding to the nature of business, the Company has devised a comprehensive risk management framework. Both internal and external risk factors are closely monitored using clearly articulated internal processes. The Companys risk management framework encompasses well devised strategies for judicious mitigation or restriction of probable risk factors.

The Risk Management team thoroughly assesses and analyses the risks depending on the geographical footprint, market size, future opportunities and geopolitical risks. Commensurate action is taken to ensure business continuity.

Risk	Business Impact	Mitigation Action
Industry Risk	Being a part of the EPC industry, the Companys growth is directly dependent on performance of the global solar industry. Any fluctuation in demand of PV installation impacts the earnings of the entire EPC industry.	Indias push to become a leader in the renewable energy space with an ambitious target of achieving 450 GW of renewable energy capacity by 2030, bodes well for the future growth of the Company. Government support on financial and other incentives over the years has helped India emerge as a global front runner in the clean energy ecosystem.
		The future looks promising for new solar installations.
		This coincides with the overall clean energy surge triggered by a combination of a decline in capital cost, technological advancements, competitive tariffs and political commitment toward climate change, making solar the preferred choice for incremental capacity globally.
Supplier Concentration Risk	The solar market dominance by limited	The Company has a strong connect with most global suppliers, strong vendor selection process, periodic supplier audits and good market monitoring throughout the entire supply chain. This helps minimise supplier risk. Recently, the global landscape for solar industry is changing with plans of some of Indias leading corporates to invest huge sums in the solar industry and increasing Government support. The entire solar value chain will be captured in India, which will enable the company to leverage its strong domestic relationships to become a world leader in the solar EPC industry.
	Chinese suppliers poses significant risk for the entire industry in case key raw materials supply is delayed or unavailable. Project competition becomes a challenge due to increase in costs.
Geo-political Risk	The Companys earnings are at the risk of any untoward economic, regulatory, social and political developments that directly or indirectly influence the countries in which the country operates in.	An expert team monitors regulatory, environmental, safety, health, labour and other business-related regulations of a market the Company intends to expand into. Careful monitoring of market conditions enables the Company to strategise around any developments in its markets. Geographical concentration risk is minimal for the Company owing to its widespread global footprint.
Competitive Risk	The Company faces risk from an unprecedented rise in competition as the solar industry is witnessing a significant growth in the wake of growing global environmental consciousness and pledges to reduce carbon emissions.	The Company is amongst the few globally bankable EPC players with rich experience, strong brand equity, unique innovative and technologically advanced offerings, end-to- end solutions, competitive pricing and widespread global operations. These attributes enable the Company to maintain a competitive edge.
Operational Risk	The Company faces risk of inability to accurately estimate costs, failure to maintain contractual quality and performance requirements, and delays in project execution. Such operational risks pose significant threat to earnings.	Strong control over each stage of the project lifecycle from designing, procurement, supplier inspection, construction, field quality monitoring to final commissioning with robust internal processes, strong HR policies and risk assessment framework, enables the Company to operate with great efficiency.
Risk	Business Impact	Mitigation Action
Currency Risk	Presence in several countries, exposes the Company to currency translation and transaction risks. Inability to match revenues received in foreign currencies with costs paid in the same currency, exchange rate fluctuations may materially impact the Companys liquidity position.	The Company undertakes adequate hedging in the contract stage itself for major projects to cover itself against any currency risk. Derivative and non-derivative instruments use also enables the Company to minimise impact of fluctuations in foreign currency.
Module Price Hike Risk	Polysilicon is a key input for cell and module manufacturers. The Companys earnings may get severely impacted if polysilicon price increases leading to price of solar modules.	The Companys strong inventory management process and long-term contracts based on variable pricing enables it to minimise risk arising from price hike in module price or any other key raw materials.

Human Resources

The Companys philosophy of Human Resources is based on the conviction that the well-being of the company and its employees is inter-dependent. We believe our employees are the most valued asset of the Company, and we remain committed to them with the following key aspects:

• Hire the most competent and diverse talent

• Ensure that every employee is treated with dignity, equality, respect and fairness in a consistent manner

• Create a safe, stimulating, enabling and supportive atmosphere in which employees comfortably work

• Support and encourage them in realisation of their full potential

• Continuous improvement and developmental approach for self and organisational growth

• Create a performance-driven work culture

The success of our philosophy depends in large measure on the way our managers and their team members carry out their duties and obligations, with a strategy resulting an outcome on the below key aspects: a. Recruitment

W e believe in employing the best people and investing in them. Over a period of time, our recruitment process has shaped up well for hiring external candidates with a right fit for the role. Also, active participation in campus placements in leading engineering college graduates is assisting us well in creating future leaders. We take efforts in understanding the candidates from several perspectives. We look for technical, behavioural and leadership competence and value system. As recruiting demands rise, we have developed several tools to support our hiring and developmental activities. Entry-level candidates hired directly from engineering colleges undergo three screenings based on academic grades, followed by a technical test, group discussions and a personal interview.

b. The 360-feedback initiative

T o develop our human resources, we understand that clear and continuous feedback needs to be provided. Our 360-degree feedback initiative is not a solution, but an answer to key organisational imperatives. The 360-degree feedback is mainly used as a development tool as it makes the entire process even more robust by adding feedback from various internal and external stakeholders. Training was provided to managers to develop their skill / knowledge upgradation, cross-functional exposure and self-confidence. There was a culture of openness where employees were free to express their views. The top management consistently emphasised that a manager must take calculative risks. Managers are also encouraged to be self-critical, instead of having to project only their good sides.

c. L eadership Development Programs

Our philosophy is aimed at having employees with potential for leadership and developing their intrinsic leadership strengths. In some specific cases, it is necessary to bring in fresh talent from outside to create cross-pollination in the organisation. However, there is also a compelling need to develop leaders from within, who have had the advantage of growing up with the core values of the organisation. We are conducting leadership development programs regularly for developing leaders within the organisation and taking up bigger roles and responsibilities. This includes:

• Inspirational Leadership

• Empowered Leadership

• MDPs

• Catalyst

• Udaan

• Shikhar

W e have adopted a non-discrimination policy and an equal opportunity employer. The commitment, enthusiasm and dedication of our employees has helped SWREL work towards being a Great Place to Work globally. Fostering a culture of caring and trust is embedded in various corporate policies such as the Environment, Health & Safety (EHS) Policy, Whistle-Blower Policy, Ethics Helpline and Meri Aawaz Suno, among others.

Information Technology

A significant goal of SWRELs Information Technology journey in FY 2022-23 has been to pursue the theme of automating and digitising business processes in different spheres of the organisation. We implemented several new solutions and features in SAP-Hana system to provide more insights on performance of projects, overheads control and inventory control. Our cloud-based HRMS has been enhanced for better visibility of manpower.

An in-house developed expense management process customised for global operations has been rolled in all major geographies. The IoT-based real-time solar plant performance monitoring application has been enhanced further to capture plant generation and performance parameters and new features in monitoring of Operations & Maintenance.

We also developed a vendor collaboration platform that supports real-time information exchange across the entire procurement lifecycle, eliminating information leakage and delay in transfer of key document. We have implemented a state-of-the-art Security Operating Centre (SOC) to monitor key digital assets, users and network for detecting and eliminating any suspicious activity. With an aim to ensure accuracy in financial information recording, safeguarding assets from unauthorised use, optimum use of resources and compliance with statutes and laws, the Company ensures strict compliance to comprehensive procedures, systems, policies and processes. The Company achieved several key milestones during FY 2022-23 in the IT function. It completed the implementation of global harmonised SAP ERP system with integrated processes on latest high-performance HANA technology. Further, the IoT-based real-time solar plant performance monitoring application was enhanced to digitise maintenance workforce with mobile and multi-lingual capabilities. The IT team also delivered several digital solutions to make key process integrated and online.

With growing importance of technologies such as IoT, AI, and ML, the Company ensures adequate investment in digitisation. It re-assesses its security policy, processes, and tools to ensure complete and adaptable IT Security amidst cyber-crime risks. During the year, the Company implemented the state-of-the-art Security Operating Centre (SOC) to monitor key digital assets, users and network for detecting and eliminating any suspicious activity. It identified key initiatives to digitise engineering design, project management, supply chain and project scheduling and monitoring processes to improve performance and access to key information.

Several other digitisation initiatives such as proprietary computerised remote monitoring of solar plants and maintenance management using latest IoT technology and harnessing power of the cloud, implementing Success Factors HRMS, travel/expense management solutions like Concur, Health and Safety applications among many others, state-of-the-art software applications in forecasting and simulation of Solar Generation as well as Design Tools were also implemented during the year. Its comprehensive Business Continuity Planning policy ensures that its strong IT policy keep the employees fully productive. Its cloud-based infrastructure keeps the entire value chain updated on ongoing assignments and their current status.

Cautionary Statement

In the Management Discussion and Analysis, certain forward-looking statements describing the Companys objectives, projections, estimates and expectations, which are subject to several risks and uncertainties. These statements are made within the meaning of applicable laws and regulations and are based on informed judgements and estimates. Actual results could materially differ from those in such forward-looking statements. The risks and uncertainties relating to these statements include, but are not limited to, risks and uncertainties regarding fluctuations in earnings, ability to manage growth, changing competitive landscape in both domestic and international markets, ability to attract and retain highly skilled professionals, time and cost overruns on contracts, government policies and regulations, interest and other fiscal costs generally prevailing in the economy. The Company does not undertake to make any announcement in case any of these forward-looking statements become materially incorrect in future or update any forward-looking statements made from time to time by or on behalf of the Company.

 

More References:

https://www.saurenergy.com/sola r-energy-news/solar-epc-after-strong-2022-industry-looks-ahead-to-continuity-in-2023

https://www.pv-magazine.com/2022/04/01/epc-giant-says-australian-large-scale-solar-faces-workforce-shortage/