ReNew Energy Global

ReNew Energy Global is one of India's largest renewable energy independent power producers. Founded in 2011, it has over 150 operational energy projects in solar, wind and hydro power spread across 18 Indian states¹.

The Investment Manager likes ReNew for several reasons: First, the scale of its business and clarity on its steady pipeline of projects is reassuring. Secondly, the company has expertise around engineering, procurement, and construction in wind power, which is a rare occurrence amongst companies in India. Finally, ReNew has proven that it is able to undertake complex projects without losing focus on creating value for shareholders.

The management team has also executed well on the company's expansion as well as its commercial and industrial strategy. Further, they have been disciplined in bidding at auctions.

India is one of the world's largest and fastest-growing economies. It still relies heavily on fossil fuels to meet the country's rising energy demands - coal is a major contributor to India's carbon footprint, which accounts for 7% of global CO2 emissions².

This is because the capacity to generate sufficient renewable power is currently being built. In the short-to-medium term, India will remain reliant on fossil fuels, however, renewables are expected to make up the lion's share of power sources in the country³ over the long run.

Decarbonisation has been gaining notable traction in recent years. Supportive and consistent government policies have enabled capacity additions⁴ in solar, hydropower, wind, and biomass power. India has publicly set a target for achieving 500 gigawatts of installed renewable capacity by 2030.

ReNew's clean energy projects at present account for only about 1.4% of India's total installed renewable capacity and helps to avoid ~0.5% of the country's carbon emissions annually⁵. This offers the company significant scope for growth as it continues to expand its clean energy capacity with more projects in the coming years.

On the ESG front, ReNew has set sustainability targets it aims to achieve by 2030⁶. They include becoming water positive, sending zero solid waste to landfill and having 100% of the electricity for its operations sourced from clean energy sources.

These are ambitious and commendable targets and the Investment Manager engaged with the company on its progress towards achieving them, including its efforts around recycling and water efficiency. On the latter, ReNew has been innovative in its use of robotic cleaning to minimise water consumption. The Investment Manager continues to engage with ReNew on these matters.

1. Source: https://investor.renewpower.in/static-files/3ee261b8-b606-41f4-8c2f-b824d5ceacfe
2. Source: https://ourworldindata.org/co2/country/india
3. Source: UBS, How to navigate India's net-zero US$20trn capex across the supply chain? (July 2022)
4. Source: https://www.argusmedia.com/en/news/2436897-india-plans-250gw-of-renewable-capacity-in-five-years
5. Source: ReNew Energy Global
6. Source: https://renewpower.in/sustainability-renew/