of capital expenditure and expansion?
We want to be a 1,000 MW company by the end of 12th Plan period. Accordingly, we will invest over R6,000 crore by 2016-17. For the current fiscal, we are targeting to add 100 MW of capacity with an investment of R750 crore. An investment of R250 crore has already been made by the company last year to commission the Rajasthan wind power project, which is expected to supply electricity to 70,000 households in the state. We have a pipeline of 400 MW for wind plan and the aim is to do 800 MW wind in next four years. By the end of the next year, we would have finalised our wind power roll out plan.
What about solar power initiative? Is it feasible to have a large portfolio of solar projects considering the prohibitive cost of putting up a project?
On the solar power front, we are participating in projects identified by various state governments. Solar power is no longer expensive power. The cost of power from these projects have reduced by more than 60% in last few years. From a level of R18 per unit price, the price of electricity from solar projects have now fallen to a level of about R7.5-8 per unit. And it is expected to fall further to about R5.5 per unit over next three to four years. At the same time price of electricity sold by thermal projects would raise in coming years bringing tariff very close to that of solar projects. Earlier people were doing renewable because it made green sense but today they are doing it because it makes business sense.
What is the structure of Hero Future Energies?
The company today is completely funded by the group. But we hope that the company would become independent after a period of three to four years. We have enough bankable project that will help us realise this goal.
Is the recently passed land acquisition legislation a stumbling block for renewable energy projects that require large tracts of land?
Unlike previously, wind power projects do not require large amount of land now. In addition, wind power turbines can now be installed without disturbing farming or other activities in the vicinity and there is no need for contiguous stretch of land. But for solar, land is required. This is a challenge. One solution for reducing large land requirement is to limit the size