JSW Energy is India’s leading independent power producer with a significant presence across the power sector, including generation, transmission, manufacturing, renewables and trading. At present, the company has a diversified project portfolio of more than 9.8 GW, with over 60 per cent based on renewables.
The company plans to accelerate its transition towards green energy and has set a target to achieve 10 GW of capacity well before the end of 2024-25 and subsequently double its capacity to 20 GW by 2030. Besides a significant pipeline of solar and wind energy generation projects with secured sites, JSW Energy aims to strengthen its presence in the storage segment. It has emerged as a winning bidder in energy storage tenders and the production-linked incentive (PLI) scheme for manufacturing solar PV wafers, cells and modules. The company plans to scale up its storage capacity to 40 GWh by 2030, and has already secured 1 GWh of battery energy storage system (BESS) and 2.4 GWh of hydro pumped storage projects (PSPs). Further, a 3,800 tonne per annum (tpa) green hydrogen production plant, the largest commercial-scale green hydrogen facility in India, is set to be operational by 2025 for its group company on a pilot basis.
Current operations and recent performance
The company has a current operational capacity of over 7 GW from thermal, wind, hydro and solar power projects. The company achieved a total net generation of 21,866 MUs during financial year 2022-23.
The company’s installed thermal energy generation capacity, aggregating over 3.85 GW, is distributed across various plants, including the 1,200 MW Ratnagiri plant, the 1,080 MW Barmer plant, the 860 MW Vijayanagar plant and the 18 MW Nandayal plant. In addition, the company owns 700 MW of thermal capacity acquired from Ind-Barath, with Unit 1 of 350 MW commissioned in January 2024. The plant was acquired in December 2022 under National Company Law Tribunal proceedings at an enterprise value of Rs 10.48 billion.
Around 72 per cent of the company’s installed thermal capacity is tied up in long-term PPAs. The thermal power plants (TPPs) have demonstrated a healthy operating track record. The overall plant load factor (PLF) of the TPPs in the third quarter of 2023-24 stood at 77 per cent. The Ratnagiri plant recorded the highest total PLF of 85 per cent whereas the Vijayanagar plant achieved a PLF of 61 per cent as compared to its deemed PLF of 62 per cent. The TPPs achieved 100 per cent ash utilisation in 2023-24.
The company’s operational renewable energy capacity stands at 3,681 MW, primarily held by its wholly-owned subsidiary, JSW Neo Energy. The subsidiary was established as a part of a business reorganisation strategy to consolidate the company’s renewable/green and new energy businesses.
The company’s operational renewable capacity includes 1,391 MW of hydro power projects–the Karcham Wangtoo and Baspa II projects–675 MW of solar capacity and 1,615 MW of wind capacity. In 2022, JSW Neo Energy purchased 1.75 GW of renewable capacity from Mytrah Energy in a landmark deal at an enterprise value of Rs 101.5 billion.
The PLF of the solar and wind energy improved to 19 per cent and 12 per cent respectively in the third quarter of 2023-24 from 18 and 10 per cent in the third quarter of the previous year.
The company recorded 6.1 BUs of overall net generation in the third quarter of 2023-24, about 43 per cent year-on-year growth. This growth was driven by higher thermal power generation, with short-term thermal contributing the most, as well as the renewable energy portfolio acquired from Mytrah Energy and other greenfield renewable capacity additions.
The company’s renewable energy generation registered a year-on-year growth of 71 per cent, at 1.4 BUs, while thermal registered a 37 per cent year-on-year growth at 4.7 BUs in the third quarter of 2023-24. The total net generation surged by 37 per cent year on year, reaching 4.7 BUs in this quarter. The net long-term generation witnessed a 25 per cent year-on-year growth during this period with the Ratnagiri TPP accounting for the highest share. The acquired renewable energy portfolio witnessed a 16 per cent year-on-year growth in net generation owing to a 22 per cent increase in wind energy generation.
JSW Power Trading Company, a wholly-owned subsidiary of JSW Energy that supplies power directly to utilities and industries through spot and term agreements, achieved a trading volume of 1,926 MUs in 2022-23.
Financial performance
In 2022-23, JSW Energy recorded a total income of Rs 108.67 billion, an increase of 24 per cent compared to the previous year. Its profit after tax (PAT) for the same period was Rs 7.11 billion as against Rs 5.69 billion in 2021-22, marking a 25 per cent growth.
JSW Energy reported the highest quarterly earnings before interest, taxes, depreciation and amortisation of Rs 20.08 billion and PAT of Rs 8.5 billion during the third quarter of 2023-24, demonstrating an 83 per cent year-on-year growth.
The capital expenditure incurred during 2022-23 was Rs 141.25 billion, out of which Rs 129.24 billion was allocated to the renewables business and Rs 11.9 billion to the thermal business.
Future outlook
The company has a significant pipeline of under-construction renewable and thermal projects to be commissioned during calendar year 2024. These include 2.2 GW of renewable energy capacity, encompassing hydro and wind power.
During 2024, JSW Energy plans to commission approximately 2 GW of wind energy capacity, including the Solar Energy Corporation of India (SECI) projects under Tranche IX – 810 MW, Tranche X – 234 MW and Tranche XII – 300 MW. Another renewable project under construction is the Kutehr hydropower project with a capacity of 240 MW in Himachal Pradesh. The project is nearing completion, with significant progress in tunnelling and barrage concreting and erection of the spillway radial gate in advanced stages.
In addition to hydro and wind projects, the 350 MW Unit 2 of the Ind-Barath thermal station is likely to be commissioned in the fourth quarter of 2023-24. The revival works for the plant are under way.
Over the long term, the company plans to scale up its storage business. It has signed MoUs for 72 GWh of hydro PSPs in various states. The company has won 2.4 GWh of hydro PSP (300 MW x 8 hours) capacity from Power Company of Karnataka Limited, targeted for commissioning within 36 months from the signing of the PPA. It has also secured 12.3 GW of hydro PSP capacity in the states of Uttar Pradesh, Andhra Pradesh, Telangana, Rajasthan and Maharashtra.
JSW received a letter of award for a 500 MW per 1,000 MWh BESS from SECI in January 2023 by quoting a tariff of Rs 1.08 million per MW per month. The identified site for this BESS is Fatehgarh, Rajasthan, and it is expected to be commissioned in 2024.
The company is venturing into the development of 1 GW of wafer-cell-module capacity allocated under the PLI scheme Tranche II. It aims to make this capacity operational by April 2025 in order to de-risk the supply chain.
Apart from these projects, JSW Energy will set up a 3,800 tpa green hydrogen plant using 25 MW of renewable energy. Its group company JSW Steel has contracted with JSW Energy for the supply of green hydrogen to its Vijayanagar steel plant. The project will be commissioned in the next 18-24 months. In addition, an MoU has been signed between JSW Energy and JSW Steel for 85,000-90,000 tonnes of green hydrogen and green oxygen for green steel production by 2030.
Net, net, with a diversified power portfolio, a strong track record in developing and operating power assets and significant investments planned for scaling up renewable energy capacity, JSW Energy is set to strengthen its position as a leading player in advancing the sector’s sustainability goals.