Integrated Annual Report 2021-22
External Environment
Responding to newer realities

The ever-evolving external environment presents us with clear opportunities to create value for the organisation and the larger stakeholder ecosystem, while exploring future-ready innovative solutions.

Climate change

The physical impacts of climate change are becoming frequent and severe with each successive year becoming the warmest year on record. While the Paris Agreement aims to limit global warming to 1.5°C above pre-industrial levels, the average global temperature in 2021 was about 1.11 (± 0.13) °C above the pre-industrial (1850-1900) levels. As the planet continues to get warmer, extreme weather events are already taking toll, and will aggravate further. Electric utilities have a vital role in global decarbonisation efforts, as the power sector is responsible for 41% of global energy-related emissions, or 13.7 gigatons of carbon dioxide (GtCO2).


Decarbonising electricity generation to limit global warming

The phenomenon of climate change has resulted in unprecedented changes in weather patterns around the world. As a response to this challenge, transition to renewable energy has become a primary focus for policy makers and businesses around the world. Today, India is home to one of the world's largest energy transition programmes.

With an immense potential for renewable energy in the country (ground mounted solar: 748 GW, solar rooftop: 352 GW, wind: 302 GW), there is great opportunity for growth. Presently, India ranks fourth globally, with respect to installed renewable capacity, having crossed 100 GW in August 2021 (in addition to over 50 GW of hydro). India already has the fifth largest solar installations and the fourth largest wind installations worldwide. The industry has seen the entry of several players, and India has also become the only large electricity market in the world to launch a ‘Green Day Ahead Market’ at the energy exchange, devoted exclusively to renewable energy. This growth has been a result of an enthusiastic policy tone, whilst promoting a favourable environment for investment. India set itself an ambitious target to expand its national non-fossil fuel target to 500 GW by 2030, while aiming to meet 50% of its energy demand from renewables at the recent COP26 in Glasgow.

A supportive policy framework has backed ambitious targets. The notification of the Electricity Rules, 2021 supports clean energy over conventional power, by granting renewable power plants a ‘must-run’ status. Moreover, the government has waived off inter-state transmission system (ISTS) charges for inter-state sale of solar and wind power. The government has also taken active steps to promote the development of solar manufacturing in the country, for which we had been largely reliant on foreign countries. The PLI scheme allocated ₹ 4,500 crore for domestic solar manufacturing, which was later expanded to ₹ 24,000 crore, as a result of keen interest in domestic manufacturing by players in the industry. The government has also announced a Basic Customs Duty of 25% on imported solar cells and 40% on imported solar modules to protect domestic manufacturing in the country. This backdrop has created confidence in viewing India as a hub for harnessing renewable energy.

People and communities

Societal inequalities are at a tipping point. COVID-19 has exposed the scale of societal disparities, and highlighted the interdependencies between business and communities, employees and customers. It is thus clear that business success relies on thriving societies. For the electric utilities sector, this elevates the importance of tackling the challenges of sustainable electricity access and affordability, to advance equal opportunities and reduce inequalities. While achieving this, there is a dire need to respect and remedy human rights across the value chain, and ensure a just transition that protects workers and communities from potential negative consequences in the transition to a low-carbon energy system.

  • Ensuring access to affordable, reliable, sustainable and modern electricity services for all
  • Attracting and retaining a diverse and inclusive workforce within the organisation and onboarding new employees for future acquisitions
  • Raising the bar on safety benchmarks and ensuring a zero harm, zero incident workplace
  • Providing career building and skill enhancement prospects to the nation’s work-ready population
  • Leaving no one behind in the energy transition and respecting human rights


Ecosystems and biodiversity are rapidly declining due to human activities. The Intergovernmental Science- Policy Platform on Biodiversity and Ecosystem Services (IPBES) and the Global Assessment Report on Biodiversity and Ecosystem Services found that human activities have significantly altered 75% of the world’s land surface, leading to the loss of over 85% of wetlands, and impacting 66% of ocean areas. The decline of ecosystems and biodiversity can have severe societal impacts, ranging from vulnerable food supplies and adverse health outcomes, to loss of livelihoods. As the energy system transforms, electric utilities must address risks to ecosystems and biodiversity, driven by climate change, land use change, and water use, and from mined metals and materials in the supply chain.

  • Transitioning to a circular electric utility sector
  • Protecting, restoring and promoting sustainable use of ecosystems and driving net biodiversity gains, going beyond only regulatory compliance


The digital transformation is disrupting electric utility business models. This brings along opportunities and risks, and is transforming society’s engagement with the electricity system. In particular, the increasing volume of distributed energy resources, such as rooftop solar photovoltaic (PV) panels and electric vehicles, combined with digitalisation of the grid and the growth of internet of things (IoT) enabled devices, is democratising the energy system. This is enabling electricity consumers to actively participate in the electricity system as suppliers of power. Technology developments also mean that businesses of all types are using electricity to provide a continually growing range of services to customers, including mobility and HVAC, while at the same time, driving energy efficiency and decarbonisation.

  • Enhancing electricity system flexibility, resilience and efficiency
  • Leveraging technology to empower customers and drive collaborative decarbonisation efforts
  • Leveraging technology to drive and promote energy efficiency

Relevant trends and responses

India commits to Net Zero Emissions by 2070

Tata Power is well poised to support India’s aspiration to reach net zero emissions by 2070. With roots in hydro power generation going back a century, and over three decades of leading presence across the solar and wind power value chain, we are equipped to leverage the country-wide momentum towards clean generation. We are the first Indian power utility to commit to no thermal generation growth and phasing out of thermal power plants at the end of contractual obligations. Aspiring to add solar and hybrid power capacity to reach 80% clean and green generation in our portfolio by 2030 and be net zero before 2045, well before India’s target timelines.

Net metering on C&I capped at 500 kW

We are processing the Net metering requests being applied by the solar customers within the licensed area. As per the Ministry of Power (MoP) notification, it is proposed that for the locations where the regulations do not provide for net-metering, net‑billing or net feed‑in, the regulatory Commission may allow net metering to the Prosumer for loads upto 500 KW or upto the sanctioned load, whichever is lower and net-billing or net feed-in for other loads.
If implemented across the state, this might enable push for higher adoption of rooftop solar by consumers and help us to leverage this opportunity.

RE > 100 GW Operational in India

With a growing solar and wind portfolio, and focused new business initiatives, we are best placed to capitalise on the RE trend.

PLI scheme for Solar Manufacturing

Tata Power Solar Systems Limited has doubled its solar cell and module manufacturing capacity at its facility in Bengaluru to 1.1 GW and is setting up 4 GW additional cell and module capacity in Tamil Nadu.

Renewable Energy (RE) Generating Stations granted 'must-run' status

Further boost to current and future RE power installations of Tata Power.

Entry of new players in the RE arena

Growing and strengthening leadership position in solar, wind and new business verticals, pursuing brand-led and B2C initiatives to increase gap from competition.

Green Day Ahead Market segment launched at IEX exclusively for RE

We are a key participant from the buy side to meet our Renewable Purchase Obligation (RPO). Further, it would benefit in reducing curtailment of green power which will boost our RE generations.

ISTS charges waived for solar and wind projects

A very encouraging move by the regulator, the waiver would promote growth of open access, which will encourage further adoption of RE in the country.

Read more on our analysis of the external environment in the Management Discussion and Analysis section.
Key developments in the Indian power scenario Tata Power’s response