JSW Energy CEO and Joint MD Sanjay Sagar attributed the Q3FY14 results, which fell short of last year?s performance, to an overall economic downturn in the country. He said he expected the situation to improve after the elections. Edited excerpts:
Do you expect the subdued demand to continue in Q4?
According to the latest numbers from the Central Electricity Authority, the peak deficit, which used to hover around 9.5-10-11%, is down to 4%. That is the kind of depression we have seen in the demand and unless there is a change in the general sentiment in the country, I don?t see this demand picking up.
On the other hand, we have the RBI, which is trying to throttle inflation by repeatedly hiking interest rates. Unless the economy does a turnaround, I do not see the demand picking up.
What?s your current installed capacity and PLF?
The installed capacity is 3,140 MW and we are not doing any expansion. I do not see much of an improvement in the plant load factor in the current quarter.
Are you comfortable with this PLF?
We are far from comfortable. We are a company which has been operating at a 99 to 100% PLF continuously in the past. So this situation is alien to us, completely alien. Even NTPC plants are getting backed down. Suddenly, shortage of coal has vanished without Coal India increasing production. That?s only because the demand for power has come down.
What is the total coal requirement and availability for your power plants?
The requirement for our imported coal-based power plants varies between 6.5 to 7 million depending on the grade. Availability is not an issue as Asian markets have coal in plenty.
What kind of merchant realisation do you see for Q4?
The realisation should be anything between 4 and 4.25, on an average.
When is lignite production from Barmer expected to rise to 7 million tonnes?
The coal ministry is giving us clearance, and as far as the ministry of environment and forests is concerned, it may give it to us in two steps ? first up to 4.5 mt and then up to 7 mt. So, it should happen by the end of this fiscal.
The company has 240 MW under construction and 8,400 MW under development. Can you update on the status?
The 240 MW under construction is the Kuther project, which was planned as a merchant plant. Due to depression in the merchant tariff, we are slowing down that project. We are now trying to get into a long-term PPA, we are negotiating with various states at this time. As far as the 8,400-MW plant is concerned, we have been maintaining for the last almost one year that the project is on hold unless there is clarity on the coal side.
Can you please update on the status of your South African coal mines?
The coal mines have been under care and maintenance for sometime and that remains their status. We do not intend to reopen the mines in the near future. Its not worthwhile to reopen them. With the rates at which the international coal is selling, it does not make sense for us as the mines are located far from the port.
