Towards a sustainable future

Sembcorp unveiled its new strategy to transform its portfolio from brown to green with an aim to contribute towards a sustainable future, ahead of Glasgow’s COP26 climate pact. This aligns with Government of India’s decarbonisation goals and supports India’s emerging energy transition ecosystem.

As a developing nation, India’s energy requirements are of prime importance for its steady growth. To meet this growing demand and drive the energy transition forward, India is aiming at meeting 50% of its energy requirements from renewable sources by 2030.

With the Government focusing on providing 24x7 power supply to all, the demand growth along with capacity additions has accelerated. In the second half of FY 2021-22 the country witnessed its highest ever power demand, resulting in an annual growth of 8.2%. The nation’s focus on uninterrupted electricity access along with resurgence in power demand post the pandemic will ensure that the demand growth for electricity remains high.

India continued with its reforms across the power value chain. During the year the Government took steps to enforce payment security mechanism for power procurement, and to reduce the time taken to recover the costs incurred due to compliance with any change in law. The Government’s intent to provide a long-term direction to the power sector was clearly visible with changes proposed in draft National Electricity Policy (NEP) to resolve some of the fundamental issues.

With an aim to align the regulatory framework towards market-based operation and to integrate higher share of renewables, a number of regulatory interventions were introduced. These include change in transmission access and pricing methodology, introduction of trading of green energy on power exchanges with day ahead and term ahead contracts for trade in renewable power are some of the key developments for this period.

At the time of writing this, the Ministry of Power has notified and implemented new rules for clearance of long outstanding receivables from discoms to generators, including late payment surcharge. Initial payments towards these rules have commenced. Stabilisation of these new practices will materially improve the credit risk of the sector.

Strengthening portfolio, improving performance

We’ve been breaking new ground in efficiency, expanding our selfoperational presence, and redefining paradigms as we work to provide sustainable energy.

In FY 2021-22 the Company took over O&M activities at its SECI III sites in Gujarat, which helped to reduce the sites’ operating cost by 33%. Today, more than 1.0 GW of operational projects are under self-O&M. These projects witnessed consistent improvement in Machine Availability in FY 2021-22.

Your company’s wind turbine fleets’ power curve performance was at 106.5%, while as on March 2022 Energy Based Availability (the readiness of equipment to take full advantage of the variable wind resource, less internal and external losses) stood at 91.3%. These are amongst the best fleet performances achieved so far.

The AI solution (VBR) stationed at India HQ virtually monitors 900 plus wind turbines round the clock, provides seamless data to analyze health of the machines to avoid breakdowns and to improve performance.

I am delighted to inform that your company bagged the British Safety Council International Safety Award (Distinction) in recognition of our collective commitment to preventing workplace injuries and work-related ill health.

We continue to focus on long-term growth and sustainable development by maintaining the legacy of caring for our communities as well as building longterm and trusted relationships with our clients, partners, employees, and other stakeholders.

The Social Impact Awards from the Indian Chamber of Commerce (ICC) and the Golden Peacock CSR Award from the Institute of Directors (IOD) in FY2021-22 highlight our sustainability efforts. Continuing SGIL’s initiatives to safeguard its communities and the planet, this year our urban forestry efforts led to the plantation of over 2000 trees and saplings.

Health, safety, and the environment

We remain committed to the health, safety, and general well-being of our employees. We continue to nurture and promote a culture of safety across our sites and offices. To ensure that incidents related to employee health and safety are addressed swiftly, we continued to integrate our processes. During these tough times our employees have shown fortitude and initiative in safeguarding business continuity with utmost safety and precautions.

The road ahead

India is uniquely positioned to become a pioneer in low-carbon and inclusive growth. And the power sector will continue to play an enabling role in this transition, I am confident that your company would play a significant role in this transformational journey by scaling up our sustained investments while delivering value to our stakeholders.

Appreciation

I would like to thank all my fellow colleagues for their efforts, which have demonstrated our culture of resilience and adaptability, while delivering in these challenging times. With their commitment to our goals, our employees continue to be critical to SGIL’s success. I would also like to thank the SGIL management team, our Board of Directors, and our shareholders for their unwavering support and guidance. I am certain that the outcomes of this year will serve as a solid base for future development, as we increase our commitment to energy sustainability and provide reliable and efficient energy solutions to millions of people in India.

Vipul Tuli

Managing Director