Integrated Annual
Report 2023-24
Integrated Annual
Report 2023-24
JSW ENERGY IS NO LONGER GOING TO REMAIN JUST AN ENERGY GENERATION COMPANY AS A HUGE PART OF OUR GROWTH AND VALUE IS GOING TO COME FROM PROVIDING OUR CUSTOMERS COMPLETE ENERGY SOLUTIONS. SPANNING ACROSS GENERATION, STORAGE AND PRODUCTS & SERVICES OUR HORIZONS AND OUR TOTAL ADDRESSABLE MARKET HAVE TRULY EXPANDED. YOUR COMPANY IS AN EARLY MOVER IN THE ENERGY STORAGE BUSINESS – HAVING A PRESENCE IN BOTH THE BATTERY ENERGY STORAGE SYSTEM AND THE HYDRO-PUMPED STORAGE PROJECTS.
Sajjan Jindal Chairman & Managing Director
Dear Shareholders,
I hope that all of you are doing well and that this message finds you in good health. The year gone by was an extraordinary one for your company as in many ways the future direction of JSW Energy took shape in FY24. Not only did the company perform extremely well across parameters but also years of hard work and planning has started to bear fruit in FY24. I am truly excited about the future of JSW Energy and share the year’s developments and progress with you all in confidence.
FY24 was an inflection point for your Company. Our total installed capacity stands at 7.2 GW across thermal, hydro, solar and wind. We have also locked-in 3.4 GWh capacity of energy storage projects in our development pipeline. Our installed capacity grew by 2.7 GW over the past two years, reflecting a 26% CAGR. I am pleased to share that by securing additional bids of 3.4 GW through the auction processes, our total locked in capacity has increased to 13.2 GW. This was achieved on the back of strong underlying growth in power demand at 7.5%, a robust bidding environment, our competitive edge in executing projects on time and within budget and the strength of our balance sheet. Currently 2.6 GW of projects are under construction, and will be commissioned in FY25, helping us meet our 10 GW capacity target by FY25.
As we move into the future, JSW Energy is no longer going to remain just an energy generation company as a huge part of our growth and value is going to come from providing our customers complete energy solutions.
Spanning across generation, storage and products & services our horizons and our total addressable market have truly expanded. Your company is an early mover in the energy storage business – having a presence in both the battery energy storage system and the hydro-pumped storage projects. Additionally, towards supply chain de-risking, we are also venturing into equipment manufacturing by making solar PV panels and wind turbines.
Significant strides have been made towards our target of becoming a 20 GW generation company by 2030. With tailwinds such as healthy underlying power demand, a strong pipeline of under-development capacity and a robust capital structure on the balance sheet, I am confident of accelerating our 2030 targets by a few years. We stand by our goal for a 50% reduction in carbon footprint by 2030 and achieving carbon neutrality (Net Zero) by 2050.
India’s GDP has grown by 8.2% in FY24, according to NSO estimates, compared to 7.0% growth a year ago. Led by strong manufacturing and construction activity, the Indian economy is poised to showcase robust growth in FY25 reflecting a resilient economy in the midst of a slowing global economic landscape. In FY24, major conflicts in Europe and the Middle East created geopolitical risks. These conflicts established the need for energy security and your company is diligently advancing towards its goal of delivering sustainable and cost-effective energy solutions for India.
India is the third largest power consumer in the world and the world’s fastest growing major economy. Sustained economic growth needs energy security and sustainability. India has been navigating the volatile energy market in the past few years, ensuring energy security while working on energy transition with an ambitious target of 500 GW of renewable energy by 2030 and Net Zero by 2070.
Power demand in India increased by 7.5% YoY in FY24. All-India peak power demand touched a high of 243 GW in September 2023, and in line with demand, overall power generation increased 7.1% YoY. Renewable power generation increased 11% YoY, driven by higher generation of solar and wind power. India’s total installed capacity stood at 442 GW at the end of FY24.
As the Indian economy grows and per capita income continues to increase, power demand is bound to accelerate.Increase in the usage of electronic appliances, rapid urbanisation and the government’s infrastructure push have all led to a sustained and systemic increase in the demand for power which will continue in the years to come. The next decade is set to be transformational for India’s power sector as it faces the twin challenges of meeting the growing demand while decarbonising the economy.
Thermal Power will continue to be a key constituent in the energy mix, insulating India from geopolitical disruptions and ensuring energy security, especially at a time when the economy is expanding rapidly. Although our dependence on fossil fuel is decreasing, but fossil-fuel based energy is essential for the country to meet the transition phase over the medium term. India’s base load demand has increased to about 200 GW and is growing at a healthy pace. Assuming sustainable demand growth of 6-7% per annum, India will need 12-14 GW of incremental firm power every year. Over and above this, the decarbonisation aspirations of commercial & industrial consumers and energy transition-related investments will need further capacity growth in renewable energy. All of this will translate into a need to install 40-50 GW of new renewable energy capacity annually. This is a huge challenge that the entire renewable energy industry is grappling with. In FY24, India could add only 18.5 GW of renewable energy capacity.
Further, renewable energy has the problem of intermittency, as both solar and wind are not available 24 hours. Hence, balancing the grid and providing it stability is something thermal power will do till storage solutions such as battery and hydro pump storage evolve and become cost-efficient.Hence, while we will continue to focus on adding renewable capacity, we will also continue to pioneer energy storage solutions as well as keep an eye on any new thermal opportunities.
AT JSW ENERGY, STRATEGY 2.0 HERALDS AN AMBITIOUS ROADMAP TO INTENSIFY GROWTH AND BROAD-BASE OUR CAPABIL ITIES WITHIN THE ENERGY SECTOR. THE STRATEGY ENCAPSULATES OUR COMMITMENT TO SCALE POWER GENERATION CAPACIT Y TO 20 GW ALONG WITH 40 GWH OF ENERGY STORAGE BEFORE 2030.
At JSW Energy, Strategy 2.0 heralds an ambitious roadmap to intensify growth and broad-base our capabilities within the energy sector. The strategy encapsulates our commitment to scale power generation capacity to 20 GW along with 40 GWh of energy storage before 2030. The strategic framework summarises how we are diversifying, broad-basing and expanding our portfolio across the value chain – from Electrons to Molecules, from a Power Generation to Energy Products and Services company. It lays out how we are embracing new energy solutions, including Battery Energy Storage Systems (BESS), Pumped Storage Projects (PSP), equipment manufacturing, green hydrogen and its derivatives. It underlines our proactive approach to leading the energy transition journey for our country while at the same time continuing to focus on enhancing operational efficiency and driving sustainable growth.
This strategy, which was unveiled last year, embodies a proactive and forward-looking approach towards transforming the energy landscape. The plan articulates how we are accelerating by aspiring to grow at a 22% CAGR between FY23-FY30. While pursuing this rapid growth, the leverage profile of the Company will continue to be best-in-class. At all times, it will remain our endeavour to maintain our sustained normalised Net Debt to EBITDA multiple below 4.0x.
FY24 was a milestone year in terms of our operational and financial performance. Our net generation increased 27% YoY to 27.9 billion units (BUs), driven by higher renewable energy and thermal power generation.
Total renewable generation increased 54% YoY to 9.3 BUs, while thermal generation increased 17% YoY. Total Revenue increased 10% YoY to ₹ 11,941 crore. We recorded the highest-ever EBITDA and the secondhighest ever Profit After Tax (PAT) in our history. EBITDA at ₹ 5,837 crore grew by 53% year-on-year, driven by the additions to our renewable energy asset base and a strong performance by the thermal business. This resulted in a 17% YoY growth in PAT at ₹ 1,723 crore.
The Board has recommended a dividend of ₹ 2.0 per share for FY24.
Liquidity continued to be strong with cash and cash equivalents of ₹ 4,691 crore at March 2024. Today, JSW Energy has one of the strongest balance sheets in the sector, which gives it the headroom to pursue value accretive growth opportunities. Our consolidated Net Worth and Net Debt stand at ₹ 20,832 crore and ₹ 26,636 crore, respectively, resulting in a Net Debt-to-Equity ratio of 1.3x, while Net Debt-to-EBITDA ratio stands at 4.5x.
In a major strategic development, in April 2024, we successfully raised ₹ 5,000 crore of equity through a Qualified Institutional Placement (QIP) issue to build a war chest for accelerating our growth ambitions. I am pleased to share with all of you that this was the largest QIP in the power sector and our first equity raise since the IPO. The issue was subscribed over 3.2x and met with an overwhelming response by high quality blue-chip global and domestic institutional investors. The success of this capital raise reinforced the faith and trust reposed by large institutional investors on your Company to be one of the best positioned to capitalise on the growth potential of the Indian power sector.
In addition to other significant milestones, we successfully secured additional renewable energy project pipeline with a cumulative capacity of 3.4 GW during the year through the competitive bidding process. This reflects a remarkable 35% surge in our locked-in capacity, which now stands at 13.2 GW. The bids include aggregate solar projects of 2.4 GW; i.e., 700 MW each from SJVN, NTPC and SECI, and another 300 MW project from GUVNL. A wind project of 1.0 GW was received from SECI under Tranche XVI.
We achieved a significant milestone with the rapid synchronisation of Ind-Barath Unit 1, having a capacity of 350 MW. Notably, this project represents one of the fastest turnarounds of a previously stalled thermal power plant in India. It highlights our commendable project execution skills, resilience, and outstanding teamwork.
In the past year, we made strategic advancements in energy products and services. Notably, we signed an offtake agreement with SECI for India’s largest Battery Energy Storage System (BESS) project, boasting an impressive capacity of 250 MW/500 MWh. Additionally, we signed a technology licensing agreement with a leading global OEM to manufacture wind turbine generators for our captive in-house requirements.
At JSW Energy, we are constructing our first Green Hydrogen plant, where we have signed a 7-year hydrogen supply agreement for offtake of 3.8 KTPA with JSW Steel. This marks India’s largest commercial-scale green hydrogen project and the first in the country for making green steel. India is poised to become a global green hydrogen player with favourable government policies and industry collaboration as catalysts for a substantial opportunity. We have also been allotted 6.5 KTPA green hydrogen production capacity from SECI under the Strategic Interventions for Green Hydrogen Transition (SIGHT) programme. We are focused on playing a significant role in the evolution of the Green Hydrogen economy of the country.
We intend to spend around ₹ 115,000 crore to reach our stated goal of 20 GW generation and 40 GWh storage under Strategy 2.0. As we accelerate our ambition, this is likely to increase going forward. Our plan is to spend approximately ₹ 15,000 crore in FY25. Additionally, we are also actively scouting for acquisition opportunities in the power sector.
Moving ahead, we are on track to commission our ongoing projects for power generation, battery storage and green hydrogen production. The growth capital secured through the recently completed QIP strategically positions us to accelerate the execution of our returns accretive growth plans. This infusion of capital empowers us to drive progress and achieve our goals with agility.
Our ESG strategy reflects how we are putting our purpose into action. Every day, we seek new and better answers to transform the world.
while making us stronger and more resilient. We are acting with urgency to protect our planet’s limited resources and be a leader in the fight against climate change. During the year, we achieved the ‘Leadership Band (A-)’ in CDP Climate Change for the third consecutive year, gaining the highest rating in the power sector in India. We are measuring our progress and providing increased transparency on our performance. Across our environmental work, we are also committed to being a force for equity, and are working with communities on the frontlines of climate change to create shared opportunities and build a more just world.
Our proactive approach is on capitalising growth opportunities within the energy sector, ensuring energy security, and supporting India’s decarbonisation goals. This is aimed at presenting us as a return focused, forward-thinking, resilient, and innovative company ready for future opportunities, while accelerating current growth momentum. Together, we are building an organisation to capitalise on our unique capability of providing solutions across the value chain.
I would like to thank all our dedicated employees, partners and families of JSW Energy who are converting this strategic vision into reality. I would also like to thank all our stakeholders for their trust, support, guidance and good wishes. The journey ahead is long and full of opportunities.
I am positive that the best is yet to come.
Sincerely,
Sajjan Jindal Chairman & Managing Director
