Tata Power to increase renewable energy capacity to 15GW

Tata Power plans to increase its renewable energy portfolio in order to become a 15 gigawatts (GW) company in the coming years, the company’s chairperson Natarajan Chandrasekaran said in the Annual General Meeting.

The company plans to focus on building scale in its rooftop solar, solar pumps, electric vehicle charging systems, and home automation businesses.

The company has renewable energy operating capacity of 1839 megawatts (MW), comprising 907 MW wind power and 932 MW solar power. And another 373 MW of wind and solar capacity is under development.

The company is witnessing strong growth in rooftop solar and solar pumps segments. “The company currently has the highest ever EPC order book and is expanding solar cells and modules manufacturing capacity. It has also won over 1 GW renewables capacity projects during the year,” Chandrasekaran said.

Currently, Tata Power will continue to divest its non-core assets to simplify the business. Apart from the sale of the defense business, this year, it has also completed the divestment of its South Africa wind assets and its shipping business.

“As I had mentioned last year, deleveraging of the balance sheet is a core focus area. This year, Tata Sons infused Rs 2,600 crore of preferential equity in the company to strengthen the balance sheet. Also, the proceeds from the divestments were utilised to further reduce the debt,” he said.

On the distribution side despite the company facing some challenges, in 2020, Tata Power completed the acquisition of three distribution license areas in Odisha and one in April this financial year. The Company distributes power in Mumbai, Delhi, Ajmer, besides Odisha.

The lower coal prices have also helped to curtail the losses in imported coal-based Mundra ultra mega power project. “Based on studies, the company believes that coal prices will moderate in the medium to long term, thereby reducing the support requirement,” Chandrasekaran said.

Tata Power has reported a consolidated net profit of Rs 1,439 crore in the last fiscal. The consolidated profit after tax before exceptional items stood at Rs 1,424 crore as against Rs 1,231 crore in the previous year, due to lower losses in the Mundra project and higher profit from acquisition of Prayagaj power project in Uttar Pradesh.

The consolidated revenues in the year were Rs 33,079 crore, compared to Rs 28,948 crore a year ago, representing an increase of about 14 percent owing to revenue growth through three Odisha discoms and execution of solar EPC projects.

The cash generated from operations increased by 15 percent to Rs 8,458 crore in the year. The consolidated net debt at the end of the year was Rs 35,946 crore, a reduction of about Rs 7, 600 crore over the previous year’s level of Rs 43,559 crore.

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