Jindal Power confident of getting back coal mines

“Proximity of our mines to our plants gives us an edge to produce coal at an economical cost and pass on the benefit to consumers,” states KK Agarwal, CEO, Jindal Power Ltd
The recent policy reforms and governmental initiatives like reliable and affordable ‘24/7 Power for All’ bode well for the power sector in India. Government’s current thrust in the renewable sector especially solar and wind energy will further augment a positive environmental footprint in the country.
Power sector in India has added unprecedented generation capacities in the last 5-6 years. Being a capital intensive sector, companies have taken loans from financial institutions to enhance capacities which are now facing threat of turning into NPAs, observes KK Agarwal, CEO of Jindal Power Ltd. He says, “The sector has been exposed to issues of inadequate coal supply, lack of long-term buyers (PPAs) as well as transmission and evacuation issues.”
Despite Coal India ramping up production and despatches rising by 10.7 per cent this year, domestic coal availability is still low to operate installed capacities at 85 per cent PLF. PLFs currently are at an all time low with a national average of 61 per cent for the period  April to July.
According to Agarwal, tariff aggression in the coal block auctions has meant poor cash flows, under-recovery in fuel cost which is impacting the companies’ ability to service debts.  He says, “Apart from fuel shortages and low demand, merchant power prices have also dropped and are expected to remain subdued over the near-to-medium term on account of large untied capacities.”
Transmission bottlenecks are another issue that does not allow southern grid’s shortfall to be met by the surplus in the national grid. Distribution is another segment that is reeling under debts due to high AT&C losses, operational inefficiency and borrowings. Due to their financial position, they are chary of committing to long-term power purchase agreements, says Agarwal.  He suggests, “It is extremely crucial to remove these roadblocks to bring buoyancy back in the sector and make it robust and healthy.”
Business outlook Jindal Power is quite upbeat that its power business would continue to be profitable. Today, the company operates the largest power station complex in Chhattisgarh with 3400-MW installed capacity. 
Talking on JPL’s future plans, Agarwal says, “Going forward, fuel sourcing is a key priority for us. Out of the 3,400 MW capacity we have coal linkages for 1,200 MW. For the rest, we are making e-auction for coal purchases. We are hopeful of getting the mines that we had won in the auction back, after the judiciary takes a final decision. The proximity of our mines to our plants gives us an edge to produce coal at an economical cost and pass on the benefit to consumers.”
Expected reforms to revitalise power sectorThe government is committed to ensure quality and affordable power for all, and is taking several measures for increasing generation, strengthening transmission, distribution, and metering of power to consumers. “The sector is expected to do well in the medium to long term as demand is bound to pick up,” states Agarwal.
Further he suggests that optimum coal quantity should be made available to producers at competitive prices to generate at least 90 per cent PLF in order to meet the ‘power for all’ objective by 2019. He feels that competition should be ushered in the coal sector by opening the sector for commercial mining which will help augment output and reduce import dependence. “Coal swapping should also be explored more vigorously that will allow producers to swap their fuel linkages with nearest fuel source. This will eventually save cost, de-congest railway network, thereby increasing efficiency, and reducing pollution and freight cost for thermal power producers,” he says. 
Many of the coal blocks do not have rail connectivity which limits coal production and coal movement. “Steps need to be taken to expedite rail connectivity to help improve production which will eventually reduce cost to power consumers,” Agarwal suggests.
Continuing his recommendation, he says, “Government should focus on developing national and regional grids so that there is more power evacuation.”  He also says, “For the 100 smart cities planned, distribution should be privatised to bring in efficiency and improve losses on a stand-alone, joint venture or licensing mode of operation. Delhi, Mumbai, Kolkata and Surat are brilliant examples of private sector playing a vital role in efficiently managing distribution. Private sector’s participation needs to be solicited on a much larger scale either standalone or through PPPs.”
Appreciating the efforts being taken by the government, Agarwal also states, “It is encouraging to see the government focusing on off-grid rural electrification. Feeder segregation has been successfully done in Gujarat that has ensured eight hour power supply to the agricultural sector. Such initiatives are required to steer the momentum in the right direction.”
Strategy to ensure long term sustainability Speaking on the short and long term strategies, Agarwal briefs “Currently, the company is largely focusing on tying capacities by securing long-term PPAs and operationalising its full capacity. We are also exploring opportunities of setting up new capacities.”
In addition, JPL had participated in all the previous UMPP bids and is keen to participate in upcoming UMPP bids based on revised bid documents. “Globally, we are eyeing opportunities in Africa. We have signed a PPA for 350 MW in Senegal and are in advanced stages of finalising another in Mozambique,” he adds.
Ventured into green power On long and short term strategies, Agarwal states, “We seek to become a leading power company by operating and implementing projects which use a wide range of fuel sources, including renewable sources.”
On this note, the company has ventured into green power with a 24 MW wind energy project at Satara, Maharashtra and the power generated is supplied to Maharashtra State Electricity Transmission Company Ltd. “We are also keenly watching the developments in the solar power generation space,” he adds.

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Jindal Power confident of getting back coal mines

“Proximity of our mines to our plants gives us an edge to produce coal at an economical cost and pass on the benefit to consumers,” states KK Agarwal, CEO, Jindal Power Ltd
The recent policy reforms and governmental initiatives like reliable and affordable ‘24/7 Power for All’ bode well for the power sector in India. Government’s current thrust in the renewable sector especially solar and wind energy will further augment a positive environmental footprint in the country.
Power sector in India has added unprecedented generation capacities in the last 5-6 years. Being a capital intensive sector, companies have taken loans from financial institutions to enhance capacities which are now facing threat of turning into NPAs, observes KK Agarwal, CEO of Jindal Power Ltd. He says, “The sector has been exposed to issues of inadequate coal supply, lack of long-term buyers (PPAs) as well as transmission and evacuation issues.”
Despite Coal India ramping up production and despatches rising by 10.7 per cent this year, domestic coal availability is still low to operate installed capacities at 85 per cent PLF. PLFs currently are at an all time low with a national average of 61 per cent for the period  April to July.
According to Agarwal, tariff aggression in the coal block auctions has meant poor cash flows, under-recovery in fuel cost which is impacting the companies’ ability to service debts.  He says, “Apart from fuel shortages and low demand, merchant power prices have also dropped and are expected to remain subdued over the near-to-medium term on account of large untied capacities.”
Transmission bottlenecks are another issue that does not allow southern grid’s shortfall to be met by the surplus in the national grid. Distribution is another segment that is reeling under debts due to high AT&C losses, operational inefficiency and borrowings. Due to their financial position, they are chary of committing to long-term power purchase agreements, says Agarwal.  He suggests, “It is extremely crucial to remove these roadblocks to bring buoyancy back in the sector and make it robust and healthy.”
Business outlook Jindal Power is quite upbeat that its power business would continue to be profitable. Today, the company operates the largest power station complex in Chhattisgarh with 3400-MW installed capacity. 
Talking on JPL’s future plans, Agarwal says, “Going forward, fuel sourcing is a key priority for us. Out of the 3,400 MW capacity we have coal linkages for 1,200 MW. For the rest, we are making e-auction for coal purchases. We are hopeful of getting the mines that we had won in the auction back, after the judiciary takes a final decision. The proximity of our mines to our plants gives us an edge to produce coal at an economical cost and pass on the benefit to consumers.”
Expected reforms to revitalise power sectorThe government is committed to ensure quality and affordable power for all, and is taking several measures for increasing generation, strengthening transmission, distribution, and metering of power to consumers. “The sector is expected to do well in the medium to long term as demand is bound to pick up,” states Agarwal.
Further he suggests that optimum coal quantity should be made available to producers at competitive prices to generate at least 90 per cent PLF in order to meet the ‘power for all’ objective by 2019. He feels that competition should be ushered in the coal sector by opening the sector for commercial mining which will help augment output and reduce import dependence. “Coal swapping should also be explored more vigorously that will allow producers to swap their fuel linkages with nearest fuel source. This will eventually save cost, de-congest railway network, thereby increasing efficiency, and reducing pollution and freight cost for thermal power producers,” he says. 
Many of the coal blocks do not have rail connectivity which limits coal production and coal movement. “Steps need to be taken to expedite rail connectivity to help improve production which will eventually reduce cost to power consumers,” Agarwal suggests.
Continuing his recommendation, he says, “Government should focus on developing national and regional grids so that there is more power evacuation.”  He also says, “For the 100 smart cities planned, distribution should be privatised to bring in efficiency and improve losses on a stand-alone, joint venture or licensing mode of operation. Delhi, Mumbai, Kolkata and Surat are brilliant examples of private sector playing a vital role in efficiently managing distribution. Private sector’s participation needs to be solicited on a much larger scale either standalone or through PPPs.”
Appreciating the efforts being taken by the government, Agarwal also states, “It is encouraging to see the government focusing on off-grid rural electrification. Feeder segregation has been successfully done in Gujarat that has ensured eight hour power supply to the agricultural sector. Such initiatives are required to steer the momentum in the right direction.”
Strategy to ensure long term sustainability Speaking on the short and long term strategies, Agarwal briefs “Currently, the company is largely focusing on tying capacities by securing long-term PPAs and operationalising its full capacity. We are also exploring opportunities of setting up new capacities.”
In addition, JPL had participated in all the previous UMPP bids and is keen to participate in upcoming UMPP bids based on revised bid documents. “Globally, we are eyeing opportunities in Africa. We have signed a PPA for 350 MW in Senegal and are in advanced stages of finalising another in Mozambique,” he adds.
Ventured into green power On long and short term strategies, Agarwal states, “We seek to become a leading power company by operating and implementing projects which use a wide range of fuel sources, including renewable sources.”
On this note, the company has ventured into green power with a 24 MW wind energy project at Satara, Maharashtra and the power generated is supplied to Maharashtra State Electricity Transmission Company Ltd. “We are also keenly watching the developments in the solar power generation space,” he adds.

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