Indian utility JSW Energy to tap renewables for growth

Indian private-sector utility JSW Energy is aiming to diversify its power generation portfolio by adding more renewable capacity, amid broader plans to reduce its dependence on its coal-fired fleet and cut coal imports.

The plans are part of the company's goal to nearly double its electricity generation capacity from around 4.6GW to 10GW over the next three-to-five years, chief executive Prashant Jain told Argus. Once this goal is achieved, it will work to double its overall capacity to 20GW, of which 10GW will come from cleaner sources of energy.

Close to 70pc of JSW's existing capacity comprises coal and lignite-fired power plants, with the remainder comprising two hydro projects. The company reported a 10pc decline in its generation in October-December 2019 from a year earlier, as distributors procured less power amid an economic slowdown.

JSW imports around 5.5mn t-6mn t/yr of coal for its 1.2GW Ratnagiri plant on India's west coast and the 860MW Vijayanagar plant in the southern Indian state of Karnataka. The plants have conditional approval from authorities to blend up to 50pc of domestic coal with imports.

This is an option that it uses "opportunistically, depending upon the arbitrage opportunities" and is contingent upon prices of imports as well as the availability of domestic coal through electronic-auctions, Jain said.

JSW sources coal from countries such as South Africa, Indonesia, Mozambique and Russia. The company also owns a majority stake in a South African coal mine, although it is not operational.

JSW believes India's plans to auction coal blocks for commercial mining is a step in the right direction as it could open up competition as well as reduce coal imports. The firm will be evaluating opportunities to bid in the planned auction.

JSW is in talks to buy two coal-fired plants totalling 1.7GW of capacity in the eastern Orissa state. But it still aims to lower its fossil fuel footprint in the generation business, in line with India's overall plans.

The company has won a bid to construct a 240MW hydropower project in the northern Himachal Pradesh state. It also plans to develop renewable capacity totalling 3.5GW by 2025 and raise this by another 10GW by 2030, partly from wind and solar projects. The firm is currently identifying sites to develop renewable projects.

By Saurabh Chaturvedi