JSW Energy Postpones Solar Projects Beyond 2024, Says MD Prashant Jain
JSW Energy Ltd. has postponed its solar projects beyond 2024 as by then Indian manufacturers would have increased their solar cells and modules capacity to meet the needs of developers chasing the 450-gigawatt target of renewable power generation by 2030.
The Sajjan Jindal-led independent power producer sees the delay due to an increase in basic custom duty on the import of solar cells and modules by 25% and 40%, respectively, from April 1, 2022. This has increased the panel prices by over 30% from the pre-April period.
“Solar projects will be taken up after calendar year 2024, as we expect the domestic capacities of Indian manufacturers to come online by then,” Prashant Jain, joint managing director of JSW Energy, told BQ Prime. In the meantime, over the next 18 months, the company will commission over 2.5 gigawatt of renewable capacity mostly in wind, hydro, and battery storage space, Jain said.
The increase in panel prices would also delay the commissioning of solar projects at the industry level, impacting over 8 gigawatt projects awarded under manufacturing-linked auctions in the last two years. Having said that, JSW Energy doesn't have any solar projects under construction at present.
The power company in early 2021 announced plans to expand capacities from the current 7.3 gigawatt to 10 gigawatt by FY25 and 20 gigawatt by FY30. “The entire capacity addition would be driven by renewables, and the planned addition of 2.5 gigawatt of greenfield renewable energy in next 18 months would entail an investment of Rs 16,000 crore,” Jain said.
“We have already invested Rs 4,000 crore of the total Rs 10,000 crore of debt,” Jain said. “Total equity contribution will be Rs 6,000 crore and will come from internal accruals,” he said.
Power Demand
The company expects power demand to remain robust with overall growth expected around 7-8% for FY23.
“The demand will be driven by strong economic activity and urbanization,” Jain said. “Although the power demand in the first half of FY23 grew by 11.8%, the merchant prices have moderated, hence the merchant volumes will fall compared to Q1FY23,” he said.
Q2 Earnings
JSW Energy's second-quarter net profit fell 18% sequentially, missing analysts' estimates, on account of lower sales.
Revenue from operations fell 21% over the previous quarter to Rs 2,388 crore on account of lower generation of power. Ebitda fell 13% on quarter to Rs 889.7 crore, while Ebitda margin stood at 37.3% against 33.8% as of June.
Watch the full interview with Prashant Jain here:
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