Reliance Power which reported 30 percent jump in its December quarter profit to Rs 266 crore, expects Rosa plant to continue contributing to the overall performance of the company.
The company's profit climbed significantly in Q3 as Rosa unit produced 2,407 units, up 143 percent, YoY and operated at 91 percent plant load factors (PLF)
JP Chalasani, CEO of the firm, in an interview with CNBC-TV18, said that Rosa unit has now become a stable source to meet power requirement in Uttar Pradesh.
The company which is in the process of adding more capacity is hopeful of getting environmental clearance for its ultra mega power project in Tilaya by Q4.
While giving an update on its third captive coal mine for Chhatrasal block, Chalasani said that the company has received stage I forest clearance and once stage-II clearance is obtained, the company will start work on the project.
Meanwhile, the company has already received clearances for its 700 megawatt hydel power plant in Arunachal Pradesh and it has recently commissioned the second unit of its 600 megawatts (MW) Butibori project in Maharashtra.
Below is an edited transcrip of JP Chalasani's interview on CNBC-TV18
Q: Could you give us the highlights of the quarter gone by and also what is happening with coal availability?
A: In this quarter, we made a profit of Rs 266 crores. It is a jump of about 30 percent compared to year on year and even the trading quarter is about 11 percent more than that. That is mainly because of the good performance recorded by Rosa as well as our solar plant.
Rosa this quarter generated about 2.4 billion units which is almost 50 percent more than the previous quarter. It has also logged 103 percent availability for all four units, entire 1200 megawatts station together. This is the highest we ever logged and highest generation we achieved on this. That significantly contributed towards the high profitability of the company.
As far as the coal for Rosa is concerned, we had no shortage of coal, the generation did not suffer because of coal. However we managed this coal from the linkage coal, imported coal as well as the domestic market coal, in the ratio of 45:45:10. 45 percent linkage coal, 45 percent imported coal and 10 percent from the domestic market coal. That is how the coal was supplied for the four stations this quarter.
Q: What was the plant load factor (PLF) from the Rosa plant in the current quarter and given the state of the financial condition of Uttar Pradesh (UP), Discom will be able to pick up all the power that you have to offer them?
A: The station in this quarter had 91 percent PLF, which is getting dispatched on this. 91 percent is a high level of PLF. This indicates that UP has been dispatching the station with this sort of coal costs and there is no issue with respect to this.
Rosa has been a very stable source for the state of UP in terms of meeting power requirement. Therefore, the effort will be to increase the performance of linkage coal under FSA, at the same time stability of availability of power is also important and UP has been paying. As far as the receivable is concerned, we are paid reasonably. Today, we have about 50 days equivalent of dues outstanding and expect them to come down shortly on this.
Q: When do you expect to get the environmental clearance for stage II of the Chhatrasal project?
A: The stage I clearance is a significant development that happened this quarter. We have the stage I clearance of the Chhatrasal mine and now we need to go for stage II. There are some stipulations in stage I which have to be compared before we go back.
We expect a time line of about six months between stage I and II clearance. Right now we are in the process of working out the complaints with those conditions that are stipulated in stage I. So six months is the time period and once the stage II clearance is there, we would start the development of the coal mine as well and that would also enable us to start the power projects.
Q: Your Samalkot plant is ready for commissioning but gas availability is still a concern, could you update us on that?
A: Four gas turbines are already synchronized which is equivalent to 1000 MW. The cash to start operations is available. As far as gas availability is concerned, there are lots of developments happening in this sector.
We currently need to wait and see how things would develop. We are quite confident that some solution would come out for meeting the gas requirement for existing gas based plant, which is about 15000 MW as well as the 9000 MW of new capacity. In the next 60 days we will find a solution so that these plants start operating.
Q: There have been delays with the Tilaiya land acquisition primarily because of issues with the Ministry of Environment and Forests (MoEF). How soon would you expect that to be resolved?
A: On the power plant side, the balance land is the forest plant for which we have stage II clearance and they are processing it for handing over of that land. So with that the power plant land will get handed over. As far as mining is concerned, the forest land recommendations are in the process of going to MoEF from the state level and for the prevailed land section 4 notification is under issual now. So that starts the process for land acquisition.
Q: This quarter coal prices were quite soft but going forward have you worked on what kind of future resolution you want on the coal linkage problem for the Rosa project?
A: In case of Rosa our effort would be to increase the domestic coal component. We already have the floor space index (FSI) in position and current realisation is 45 percent. We would like to take it to 65-70 percent levels at least and that would significantly reduce the component of imported coal required.
Also in Rosa, there are offers from coal companies for one time coal sale which we entered into and its cost is close to linkage coal. So, that also got sanctioned for about six lakh tones and we are buying that coal. We are trying various methods to increase domestic coal component for Rosa which would adjust the overall cost of fuel.
At the same time, there is a need for generating in a sustainable basis to supply the power for UP. So that is what we are doing and ensuring that the non-availability of coal doesn’t become an issue for non-operation of plant. We are keeping an adequate coal stock at the power plant and are declaring the availability of the station. In the last quarter it got dispatched to the extent of 91 percent.