To foster a cleaner energy future, we intend to reverse our energy mix in the medium to long term. We have targeted a growth in our portfolio from 7 GW currently to 10 GW by 2025, and to 20 GW by 2030.
Transition to clean energy has emerged as a key driving force for sustainable development in recent years, presenting a huge economic opportunity. Countries across the globe are more determined than ever to accelerating decarbonisation of their economies and securing their future energy needs. The current decade will hence be one of great climate action – that of focussed planning and taking necessary actions for enabling a global energy shift.
For our nation, two key themes acted as catalysts in FY2022 for accelerating energy transition. First, at COP-26, India announced a target to achieve Net-Zero emissions by 2070, implying a deep-decarbonisation of all “hard to abate” sectors like thermal power, industry, agriculture and transport over the next fifty years. Second, geo-political tensions, supply chain constraints and elevated fossil fuel prices accentuated the importance of energy security for economic sustainability.
Electricity is only 18% of total energy consumption in India. The balance 82% energy use, which mainly depends on fossil fuels, presents a large opportunity for new green businesses. For the last two decades, JSW Energy has primarily been an electricity generation utility. However, as India gears for this transformative decade of serious action, it’s time for us at JSW Energy to also enact change and be at the forefront of energy transition. Therefore, over the next decade, I see our company transform from a power generating utility into an energy solutions provider for new green businesses such as energy storage and deep decarbonisation. With climate change agenda and sustainability at the core of our business, we remain committed to becoming a net-zero company by 2050.
To foster a cleaner energy future, we intend to reverse our energy mix in the medium to long term. We have targeted a growth in our portfolio from 7 GW currently to 10 GW by 2025, and to 20 GW by 2030, with incremental capacity additions from renewable energy. With this, the share of Renewables in our portfolio will increase to 70% by 2025 and 85% by 2030. During the year, we achieved significant developments on this aspect. We increased our portfolio from 4.6 GW to 7 GW by signing long-term PPAs for the entire 2.4 GW renewable portfolio which was announced in FY2021. With this, the share of renewables in our portfolio increased to ~55% from ~30% a year ago.
Moreover, of this 2.4 GW growth pipeline, we commenced operations at the 225 MW solar plant at Vijayanagar in Karnataka in April 2022. This was a notable feat as our teams diligently commenced the operations within 12 months despite headwinds of COVID-related disruptions, elevated commodity prices and global supply chain outages. For the balance wind capacities of 2 GW, we are on track to commence operations in a phase-wise manner from Q2 FY2023. In parallel, construction of our 240 MW Kutehr hydroelectric project in Himachal Pradesh is progressing well, ahead of its scheduled timelines of commissioning by September 2024. We are also keenly evaluating various attractive inorganic growth opportunities, which can leapfrog our growth trajectory while delivering long-term value creation. Leveraging upon our strong track-record of project execution within budget & time, and inorganic growth optionalities and a robust balance sheet, we are more confident of achieving our stated goals by 2030 or earlier.
As we accelerate growth to 20 GW, we are constantly ensuring that JSW Energy is ‘future-ready’, and remains geared to creating significant value for our shareholders, employees, and the society we serve. To this effect, we are evaluating emerging technologies across green hydrogen / ammonia and its derivatives including carbon capture, storage solutions including battery & pumped hydro storage, and energy solutions. We are expeditiously securing key resources for Hydro Pump Storage Projects in various resource-rich states for projects with a targeted capacity of 10 GW. During the last twelve months, we tied up resources totalling to 5 GW with various states.
Further, we are continuing to lock-in key renewable resources to optimise our future-readiness and making meaningful investments in digitalisation, innovation, and technology to increase our agility. We are strengthening our knowledge base and internal capabilities, and re-skilling the workforce for a renewable-led future. We also continue to thrust on placing adequate safety measures to ensure employee well-being at our operational and under-construction projects.
Finally, to streamline the structure for value unlocking at the right time, we implemented a reorganisation of our businesses into grey (thermal) and green (renewable) verticals. As a result, all existing and upcoming renewable energy businesses will be housed under JSW Neo Energy and this entity will be the vehicle to drive our growth plans in renewable energy across generation, energy storage and green hydrogen / ammonia and its derivatives.
During the year under review, we demonstrated our resilience and ability to consistently respond to the needs of our customers. What adds to our strength is our deep industry expertise, distinctive capabilities and footprint, sustainable supply chains and operational excellence.
We have set an ambitious target for 50% reduction in carbon footprint by 2030 and becoming net-zero by 2050. In this respect, during FY2022, we cut our specific emissions for SOx and NOx by 6% and 15% respectively, and maintained GHG emission intensity despite a 4% higher net generation YoY.
Financially, we continued demonstrating our ability to generate steady cashflows. During the year, the total Revenue increased by 22% YoY to ₹8,736 Crore and EBITDA for FY2022 was higher by 32% YoY at ₹4,138 Crore resulting in the highest ever PAT of ₹1,729 Crore.
Moreover, we have one of the strongest balance sheets with Net Debt to Equity at 0.4x and Net Debt to EBITDA at 1.68x in the sector - which has been built over the years through proactive de-leveraging and prudent capital allocation. This provides us the latitude to pursue attractive growth opportunities. During the year under review, out of a total announced capex of ₹16,660 Crore for 2.4 GW projects, we spent ₹3,100 Crore and have so far committed a total of ₹9,600 Crore. The Board has recommended a dividend of ₹2 per share subject to your approval.
India has currently surpassed 50 GW of cumulative installed solar capacity, after having added over 15 GW in FY2022. This was the highest yearly capacity addition. The installed capacity for wind is currently the 4th highest in the world at 40 GW of wind energy, holding a major portion of India’s total renewable energy capacity.
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India has been adding renewable capacity every year, although the pace of capacity add is still not sufficient to support the robust power demand growth in the country. We saw peak power demand in India reach an all-time high of 207 GW recently. This demand, with the key drivers of rural electrification, urbanisation and industrialisation, will continue to grow strongly over the next decade. Hence, it will be critical to add large-scale renewable energy with storage capacities in the country.
Policy support is of utmost importance to drive climate and energy agenda in the country. A key pillar of the Union Budget 2022-23 was clean energy and accelerating energy transition. It provided a consistent and balanced intervention to promote long-term growth and sustainability of energy goals. With clean energy and climate change taking centre-stage, it emphasised on taking action through different schemes to encourage domestic manufacturing of solar power equipment, battery swapping, and decentralised renewable energy, among others.
As India imports more than 4/5th of its oil and half of its natural gas requirements, the government’s supportive policies for ecosystem development and energy transition are a step in the right direction. The Green Hydrogen and Green Ammonia policy, notified in February 2022, is a key step towards India’s clean energy ambitions. The policy offers 25 years of free power transmission for renewable energy plants for green hydrogen production, that are commissioned before June 2025. This will help India achieve its twin objectives of creating demand for green hydrogen and increasing the installed capacity of renewable energy.
Both policy support and rising energy needs aid JSW Energy in its aim to play a meaningful role in India’s energy sector. Having managed to build a strong position as a leading energy company, we will continue to apply our capabilities to innovate, scale and accelerate the transformation of India’s energy systems through new green energy businesses and its derivatives.
I am proud of the work we have done to make our company more equitable and sustainable. We have so much to look forward to in future years. We owe a huge thanks to all the talented and dedicated employees in JSW Energy. Our team is passionate, tenacious, and has made our achievements possible despite challenging situations over the years such as the COVID-19 pandemic.
I also take this opportunity to thank all our stakeholders – from Central and State Governments, our customers, investors, regulators, lenders, rating agencies, suppliers and advisors. Thank you for taking this leap with us, and I look forward to building our future with your constant support. Together, I’m sure we can achieve a bright future for our society at large.
Chairman & Managing Director
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