Companies

JSW Energy to invest ₹11,000 cr in fresh capacity of 1,800 MW

Suresh P Iyengar Mumbai | Updated on February 17, 2021

Prashant Jain, Joint Managing Director, JSW Energy   -  Businessline

JSW Energy targets to become 10 GW (10,000 MW) company over the medium term, with renewed focus on renewables for all incremental growth.

The company plans to build renewable capacity of about 1.1 GW to meet JSW Group’s renewable purchase obligations and has received letter of authorisation for 810 MW in the recently concluded Solar Energy Corporation of India’s Wind hybrid bid.

It is expecting to tie-up another 225-250 MW of solar capacity soon. Further, it is also constructing a 240 MW greenfield Hydro project at Kutehr (Himachal Pradesh) and has already secured a sanction for the project finance loan from a leading bank.

The company currently has capacity to produce 4,559 MW, including 3,158 MW of thermal, 1,391 MW Hydel and 10 MW of solar.

Renewables will be the future of the power generation business because of significant technological advances that has improved the overall economics, and has been supported by strong policy initiatives from the government, said Prashant Jain, Joint Managing Director, JSW Energy.

The company will be investing about ₹9,500-11,000 crore in setting up 1,800 MW of capacity in next two years, said Jain.

JSW Energy has created ample headroom by reducing net debt by about ₹6,700 crore leading to a net debt to equity ratio of 0.48 times and net debt/Ebitda of 2.17 times.

“We are at the end of a prolonged de-leveraging cycle and going forward we will start re-leveraging to pursue growth plans in the renewable segment. The incremental cash flows from the current portfolio will ensure a robust leverage ratio and gearing going forward,” he added.

Renewables will be the future of the power generation business because of significant technological advances that has improved the overall economics and has been supported by strong policy initiatives from the Government.

In the past, wind energy turbines used to be of 0.5 MW, which now can go up to 5 MW in India. Globally, offshore turbines are up to 13 MW each.

Similarly, the module for peak solar power generation used to be 200 watt which has now reached to 540 watt and close to achieving 600-800 watt. Following these technological improvements, the tariff in the quantitative bidding has also fallen sharply and the cost of renewable power is now lower than that of thermal power.

The government has recently made renewable purchase obligations mandatory for discoms, which augur well for the demand of power from this sub-sector, said Jain.

Published on February 17, 2021

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