Renewable energy accounted for 77% of the 5.8 gigawatt capacity expansion of Tata Power Co. in the June quarter, according to Chief Executive Officer Praveer Sinha. The company is set to execute many pipeline projects in terms of their utility scales, rooftop captives, and third-party engineering, procurement, and construction orders, he said.
These executions will assist in generating healthy Ebitda and net profit levels, as the projects will create capacity in the range of two gigawatts, Sinha, managing director of the company, told BQ Prime's Sajeet Manghat. He expects to finish a significant portion of the four gigawatt pending order book this year.
In order to transform its whole thermal portfolio to renewable energy, the business expects to set up 2–2.5 gigawatts of capacity annually in various categories, he said. The firm will first increase capacity in solar and wind before gradually expanding into its hydrosector.
The objective is to grow capacity every year while also utilising existing ones and subsequently decommissioning units once their useful lives have expired, Sinha said.
Transmission and Distribution
Sinha projects good growth for the company's transmission and distribution segment, which saw strong performance in Q1 FY24.
He attributed the vertical's performance to the company's yearly capital expenditure of Rs 600–700 crore in the Mumbai transmission segment. These funds are used to update and replace older smart metres in the city in order to increase reliability.
The company has capital expenditures for the distribution vertical in Mumbai, Delhi, and Odisha. Its operations in Odisha have now been entirely stabilised, Sinha said.
Tata Power has implemented the installation of 6.5 lakh smart metres in the cities of Mumbai, Delhi, and Odisha and, over a period of time, will soon provide smart metres to all its customers in these cities, said Sinha. He even indicated that the company may consider covering some rural areas in the future.
The previous year, the business had bought two transmission assets under stressed conditions in Uttar Pradesh, Rajasthan, and Haryana. These assets will be conditioned in the next 18 months, according to Sinha. The company has received a Rs 1,700 crore order from Chhattisgarh for the installation of smart metres, he said.
Company Efficiency
The nature of the new-age metres has enabled the company's collectivity. The debtor days of the company have decreased from 58 previously to 48 this quarter, Sinha said.
The company has about 100% collection efficiency in most places, he said, and the prepayment of what the company is due is supported by the smart meters, which thus helps the working capital structure.
The firm's Mundra ultra mega power plant is allowed to operate at full cost as per Section 11 of the Electricity Act, 2003. This helps with the plant's efficiency, Sinha said. Tata Power currently has the provision until September 30, and expects an extension according to power demand in the coming months. Although it is difficult to predict the weather conditions and thus the power requirements, Sinha said that requirement would be evident due to the hot and humid climate in the month of October.
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