Tata Power and India's Energy Transition

Tata Power stood at the forefront of India’s energy transition. The firm had a long history deeply intertwined with the country's development. As Mumbai’s power needs increased, Tata Power built out thermal assets across North, West, and East India. While thermal power generation remained Tata Power’s mainstay, the firm slowly started diversifying. By 2024, Tata Power was India’s largest private power producer by installed capacity. It had annual revenues of $7.4 billion. In 2020, Tata Power boldly announced a commitment to net-zero emissions by 2050, concurrent with a complete phase-down of thermal capacity. It later brought this commitment forward to 2045. To prepare for declining revenues from thermal power generation, it was actively expanding its renewable business. Still, stakeholders had concerns about Tata Power’s ambitions. Was the firm’s decision to sacrifice potentially high returns in thermal power generation financially imprudent, or did it position the firm well as India inevitably accelerated its energy transition? CEO Praveer Sinha wondered, how should Tata Power think about capital allocation in an uncertain technological and returns landscape?