A decrease in domestic fuel prices, coupled with a rise in power consumption and falling global energy prices, augur well for the industry and JSW Energy in the fourth quarter and next fiscal, according to a top official at the company.
The Sajjan Jindal-led company is expanding its total installed capacity to 20 GW by FY30 through both brownfield and greenfield — including in the renewable sector — expansions, JSW Energy joint managing director & CEO Prashant Jain told FE in an interaction.
“The demand for power is increasing and in the first 22 days of the current quarter, it has gone up 15% because of higher industrial activity and consumer demand. This is due to increase in electrification, improvement in the purchasing power of the consumer and urbanisation, among others. The prices of power have also gone up from ₹4.55 to ₹6.6-7,” Jain said.
“Fuel prices have come down to about $240 to $170-160. So, it’s a good situation for the sector,” he said.
The company has debt of about ₹9,800 crore, including around ₹3,000 crore for works in progress. With expansion and acquisition plans in the offing, the debt is expected to rise further, he said, adding JSW Energy’s Ebitda will also go up 2.5 times. “Our debt to Ebitda ratio will be close to 4-4.25 times.”
JSW Energy intends to commission about 2.25 GW of renewable capacity in the next 18 months through organic and inorganic routes. The firm has also earmarked `8,000-10,000 crore capex per annum over the next decade, which would be reviewed after three years. “This is to increase our total installed capacity to 10 GW by FY25 and 20 GW by FY30,” he said.
In August last year, JSW Energy signed an agreement to acquire Mytrah Energy’s 1,753 MW renewable energy portfolio for an enterprise value of about ₹10,530 crore. The deal was to help the company achieve its renewable-led capacity growth target of 10 GW by FY25 ahead of time.
“The transaction is expected to be closed this quarter itself, maybe this month or early February. We are also looking at various other inorganic opportunities, probably in the renewable sector.”
In Q3, the company also completed the acquisition of 700 MW Ind-Barath Energy (Utkal) for ₹1,047.60 crore through insolvency proceedings.
On its foray into energy storage, Jain said it was an important piece as the company was already into generation and storage solutions. Last week, the company said it had won letter of awards from the Solar Energy Corporation of India for standalone battery energy storage systems totalling 500 MW.
Alongside, the company is also working on hydro-pump storage and received allocation for up to 50 GW hour of storage sites across India, which are under development. The company intends to start its first project in Karnataka for its capital requirements in the current calendar year.
JSW Energy is also planning to foray into the hydrogen business, which is at a conceptualisation phase right now. The firm is awaiting rollout of government policies on this front. “We are waiting for the government to put a policy framework in place,” Jain said.