Aiming to keep power cost lowest in country: Prashant Jain of JSW Energy

The company, which is no longer investing in thermal power, will look at several debt funding instruments for its renewable projects

JSW Energy is targetting to keep the rate of the power sold from its units lower than its peers in order to stay ahead in the merit order dispatch. Besides, the company, which has decided to no longer invest in thermal power, will look at several debt funding instruments for its renewable energy projects in order to keep the cost low.

JSW also saw a 38 per cent reduction in its dues from the discoms during FY21. States procure power according to a merit order which is drawn based on cheapest power available.

While the cost of imported coal went up during the last financial year, JSW said it did not supply imported coal based power. Speaking with Business Standard,  Prashant Jain, managing director, JSW Energy, said their dues were down to a three-year low. “A low cost power producer like us is doing well in terms of payment of the dues. We do not sell power to discoms from imported coal. Either it is domestic coal or hydro. Imported coal-based power is supplied only to group captive consumers, which can absorb that cost,” he said.

Cost of imported coal has increased in the last few months, ranging from $48-51 a tonne. Jain said the effective increase in tariff amounts to 15 per cent “But these prices will moderate. Also, out of our total portfolio of 4.6 Gw, only 35 per cent of the power supplied is from imported coal, the rest in hydro and domestic coal based units,” he said.

JSW Energy has plans to expand its current renewable energy capacity of 4.6 GW to 10 GW by FY25 and to 20 GW by FY30. The company plans to take advantage of ESG funds to accelerate its renewable energy growth. “We have already tapped ESG funding. We recently raised green hydro bonds 4.125 per cent which are now trading at 3.8 per cent. This is a first for any company in the whole of Asia,” Jain said.

For future projects, Jain said the company would look at similar instruments. He added that as the company is actively reducing its Greenhouse Gas emissions, it is well in line for ESG funding. This, Jain said, would also help them keep the power cost in control.

“We will be looking at all avenues of debt funding for renewable projects. We want to keep the power cost lowest in the country to stay above in merit order dispatch and also payment by the discoms. We are already generating Rs 2,200 crore of cash profit so we have sufficient cash flow in our balance sheet. We do not have any need to raise equity. If there is a need to raise equity, we will examine what options can be considered,” Jain said in response to the query whether the company would take the InvIT route for its renewable assets.

JSW currently has more wind power assets in its portfolio but it is planning to increase solar capacity with rising domestic equipment availability. He refused that the company would enter into the manufacturing space. “We would like to be customers to domestic companies such as Reliance which come in this space,” he said. JSW’s renewable projects would largely come from the bidding route.