Sajjan Jindal-led JSW Energy may convert its 860-MW Vijayanagar power plant in Karnataka into a group captive unit over the next two-three years.
Sajjan Jindal-led JSW Energy may convert its 860-MW Vijayanagar power plant in Karnataka into a group captive unit over the next two-three years. The unit has for several months lacked assured buyers and remained heavily under-utilised.
What made matters worse is the expiry of a short-term sales agreement with Karnataka Power Corporation (KPCL) in May. The plant operated at a low plant load factor (PLF) of 55% in the April-June quarter of 2018 and had faced similar issues in the previous year as well.
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The lower utilisation levels and volumes in the April-June quarter impacted the power producer’s operating profits that dropped 11% year-on-year to Rs 776 crore.
Sharad Mahendra, executive vice-president of JSW Energy, said, “The possibility of a short-term or a long-term PPA in Karnataka is drying up, as the state met almost 70% of its power demand in the April-June quarter through wind solar and hydro power generated within the state. Also, with another 100 -MW project getting commissioned in the next quarter, it would be even more difficult.” However, he added that the company would still be open to PPA opportunities.
Growing demand for power from the group’s steel unit at Vijayanagar is one reason for the proposed conversion. JSW Steel is in the process of increasing its steel production capacity to 25 million tonne over the next three years from 18 MTPA at present.
Karnataka has commissioned 12,452 MW of renewable capacity as of June 2018 that includes wind, solar, hydro, biomass and co-generation.