JSW Energy Moves Closer to 20 GW Goal with Series of Acquisitions

Key Takeaways

JSW Energy accelerates its capacity growth with significant acquisitions, aiming for 20 GW by 2028.
The company plans to shift towards manufacturing wind blades and solar modules to support its projects.
Approximately 70% of JSW Energy’s current assets are green, highlighting its commitment to renewable energy.

Strategic Growth in Renewable Energy

Sajjan Jindal-led JSW Energy is on track to reach its ambitious target of 20 GW total power generation capacity by 2028, two years ahead of its original goal set for 2030. This expansion is driven by recent acquisitions of renewable energy assets from O2 Power and Hetero Group, as well as a thermal power asset from KSK Mahanadi.

In a statement, Pritesh Vinay, the Chief Financial Officer of JSW Energy, detailed the company’s growth forecast. By June 2024, the company’s operational capacity is expected to reach 14 GW, with an additional 7.8 GW currently under construction and 3.9 GW tied to power purchase agreements, including 3.1 GW secured for commercial and industrial initiatives. Additionally, 6-7 GW worth of letters of award and interests have been received, which could further bolster their capacity.

The strategic pivot from organic to inorganic growth stems from challenges faced by renewable energy developers regarding connectivity and the permissions necessary to construct projects. JSW Energy encountered various risks during transmission project construction, such as right-of-way issues and supply chain disruptions.

In a notable transaction during the third quarter of this fiscal year, JSW acquired O2 Power’s renewable energy platform, totaling 4,696 MW for ₹12,468 crore. Out of this, it is projected that 2.3 GW will commence operations by June 2025, with an additional 2.4 GW to follow by June 2027, contributing to a total of 4.7 GW from the O2 acquisition alone.

In January, the company also acquired 125 MW wind projects from the Hetero Group for ₹630 crore and is in the process of acquiring KSK Mahanadi Power Company’s thermal power capacity of 3,600 MW in Chhattisgarh for approximately ₹16,000 crore. The KSK Mahanadi site currently operates three units totaling 1,800 MW with further capacity available for expansion.

JSW Energy recently received a letter of award to develop a 1,600 MW (2×800 MW) coal-based thermal power plant. This acquisition strategy reinforces the company’s goal of integrating more green energy assets; currently, 70% of its portfolio comprises renewable sources with the remaining 30% from thermal energy. The company is actively pursuing innovative energy solutions, including hybrid power plants, energy storage, and the development of green hydrogen.

On the manufacturing front, the company plans to establish a facility for wind blades and solar modules, signaling a renewed commitment to this area after previously pausing due to declining solar panel prices. This initiative is not targeted at manufacturing for third parties but aims to ensure a stable supply chain for its own power projects. Vinay emphasized the commitment to building power projects rather than focusing solely on equipment sales.

Overall, JSW Energy’s strategic acquisitions and focus on renewable energy advancement position it as a significant player in the energy transition landscape.

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