ReNew’s Q2/FY23 Revenues Go Up, Net Loss Narrows

• ReNew Energy's revenues in Q2 FY23 improved annually by 5.1% thanks to increase in operating capacity, better realization and late payment surcharge from customers
• It sold 70.8% more solar energy annually with 1,785 million kWh, with a weighted average PLF of 21.8%
• Norfund and KLP will acquire 49% stake in ReNew's transmission projects that will enable the company to commission its renewable energy projects earlier than scheduled
• ReNew has also announced plans to acquire 3E to enhance its technical and analytic capabilities
• Its subsidiary has signed framework agreement with Egyptian government to build a green hydrogen project

NASDAQ listed Indian renewable energy company ReNew Energy Global plc exited Q2 FY23 (period ended September 30, 2022) with 5.1% annual increase in total revenue with INR 22.45 billion ($275 million), while narrowing net loss of INR 986 million ($12 million) from INR 6.6 billion ($81 million) last year.

Increase in total revenue or total income was attributed to an increase in operating capacity, better realization and late payment surcharge from customers, partially offset by lower wind resource, lower income from carbon credit and compensation for loss of revenue.

Adjusted EBITDA was reported as INR 18.2 million ($224 million), having gone up slightly by 0.1% annually.

During H1 FY23, its total revenues increased 24.4% YoY to INR 47.4 billion ($583 million), while net loss was INR 1.09 billion ($13 million).

It sold 4,751 million kWh of green electricity during Q2 FY23 comprising 1,785 million kWh solar energy. Solar electricity sold reflects an annual improvement of 70.8%, while electricity sold from wind assets went down 3.5% over the same period. Weighted average plant load factor (PLF) for solar was 21.8% and that of wind 32.7%.

At the end of September 2022, its total portfolio was 13.368 GW along with 7.698 GW commissioned capacity. Of the operational capacity, 3.713 GW was solar, 3.887 GW wind and 99 MW hydro power.

"ReNew continues to lead the energy transition in India and during the quarter, we signed 1 GW of purchase power agreements as a preferred partner for carbon-mitigation solutions," said ReNew Chairman and CEO, Sumant Sinha. "The core operations of the company continue to execute as expected this year and our continued access to affordable capital are enabling the company to capitalize on significant growth opportunities."

One big news the company made while sharing financial results was a partnership with the Norwegian government's Investment Fund for developing countries, Norfund and Norwegian pension company KLP. The trio will co-invest in ReNew's transmission projects, beginning with Norfund and KLP investing around INR 900 million ($11 million) to acquire 49% stake in the company's Koppal transmission project in Karnataka.

"The role of these projects in enabling earlier commissioning of renewable energy projects, enhance returns on ReNew's core renewable energy business. Investment by Norfund and KLP in ReNew's transmission projects enables ReNew to add further capacity and is in line with ReNew's capital recycling strategy," stated the management.

ReNew is also set to acquire software-as-a-service (SaaS) solutions company 3E that provides software applications to maximize the revenue of renewable energy assets over the entire life cycle. 3E's digital platform SynaptiQ has about 20 GW contracted assets capacity under management, it shared.

Management has reiterated its adjusted EBITDA guidance for FY2023 as INR 66.0 billion to INR 69.0 billion (see India's ReNew Power Suffers Net Loss In Q1 FY23).

Green Hydrogen project in Egypt

In a related news from the ReNew group, one of ReNew Energy's subsidiaries ReNew Power Private Limited has signed a framework agreement with the Egyptian government to build a green hydrogen plant in the Suez Canal Economic Zone. It follows the memorandum of understanding (MoU) signed in July 2022 (see Green Hydrogen & Green Ammonia Project In Egypt).

The $8 billion project will be built in phases and targets to produce 220,000 tons of green hydrogen, starting with a pilot phase of 20,000 tons, along with derivatives aimed to come online in 2026. Following this, phase I will aim for 200,000 tons annually.

ReNew will now undertake feasibility studies and make a final investment decision (FID) over the next 12 months to 16 months. It has picked local energy company Elsewedy Electric as co-developer.