Prices of merchant power have improved, but renewable participation will keep power prices under pressure, said Prashant Jain, Joint Managing Director and Chief Executive Officer of JSW Energy on Tuesday. Jain, however, expects to overcome the volatility in prices with the Vijaynagar unit power purchase agreement (PPA).

“Prices of merchant power have improved and now they are in the region of Rs 3-.3.20 per day average and peak power prices are hovering around Rs 6. But the merchant power prices will continue to remain under pressure because you are seeing more and more renewable participation and penetration which is happening. So that is where we see lower merchant prices and that trend will continue,” Jain said in an interview with CNBC-TV18.

The company is focusing on long term PPAs, said Jain.

“However, we have been focusing on more long term PPAs. During the quarter also, we increased our long-term PPA portfolio to 82 percent and we have also done a long-term tie-up which will be completed in the next financial year wherein our long-term PPA portfolio will increase to 87 percent. With that our Maharashtra unit will be completely long-term tied up and only the Vijaynagar unit will remain which we expect in the next 24 months we will be able to tie up. So, we will be overcoming this volatility in the next 24 months timeframe.”

He said that they are focusing on hydro and wind, but they are looking at the solar side as well. The company is uncomfortable with the pricing, he added.

“At this point in time, our concentration is on hydro as well as wind. But we are working very aggressively on the solar side. On the solar side, we like the technology, we like the framework, but the problem is pricing. The kind of tariffs which we are seeing in competitive bids, we are a little uncomfortable of getting an adequate return for our shareholders,” he said.

On debt, Jain said that the net debt is down to Rs 6,700 crore. He also said that the debt to EBITDA is at 2.17 times as compared to 6 times for the industry.

Watch the video for more

(Edited by : Ajay Vaishnav)