Tata Power to nearly double its capex to Rs 22,000 cr in FY25: Praveer Sinha, MD & CEO

Tata Power

Tata Power plans to increase its capex for FY25 to Rs 22,000 crore, from  Rs 12,000 crore last year and an earlier estimate of Rs 20,000 crore, said Managing Director and Chief Executive Praveer Sinha after the company posted Rs 1,093 crore and Rs 15,698 crore in profits and revenues, respectively, for the second quarter.

Sinha told Moneycontrol that the company  has advanced its execution timelines by a year and is implementing some projects slated for next year in the current fiscal, and therefore needs to increase the capex.

“In the beginning of FY25 we planned to spend Rs 20,000 crore  this year, and have already spent Rs 9,000 crore in the first six months. Looking at the pipeline of projects and the opportunity to commission some of them this year, we will now actually spend Rs 22,000 crore. So, Rs 13,000 crore will be spent between the third and fourth quarters,” he said.

“Some of the projects which were supposed to be implemented next year but are coming up this year are projects for renewable energy, transmission, and distribution,” he added.

On October 30, Tata Power’s board of directors approved an investment of Rs 5,666 crore to set up a 1,000 megawatt (MW) pumped storage hydro project in Bhivpuri, Maharashtra. After the necessary approvals, Sinha said the company expects to begin work on this in January 2025. The project is of significance as the company plans to increase its renewable energy portfolio.

“It (the hydro project) is now getting approvals, and we expect the work to start in January and get completed in 44 months. There is another 1,800 MW pumped storage project, the  approvals for which are being obtained. Once that is done, we will be carrying out work on that too,” said Sinha.

The power major reported strong second quarter numbers on October 30, with net profit growing seven percent from last year to Rs 1,093 crore. At the end of the quarter, the company had 6.4 gigawatts (GW) of renewable capacity operational and another 6.5 GW  under implementation, taking its total green energy portfolio to around 12.9 GW.

Solar plans

With Tata Power’s solar cell module plant in Tamil Nadu now operating at full capacity, Sinha said the company would export only up to 1 GW of solar modules from its 4.3 GW capacity plant.

The Indian government has been pushing companies to set up manufacturing facilities to reduce reliance on imports and grab the opportunity in the green energy sector.

With the government pushing for renewable energy sources, India's power companies have been increasing their investment in non-fossil energy sources, including solar.

For the solar cell unit, which is currently running at 2 GW capacity, Sinha said that 100 percent operationalisation would be achieved by November 2024.  Solar cell units are an important component of solar cell modules that help convert sunlight into electricity.

“The module unit is producing at full capacity. In the cell unit, the first two gigawatts have become operational, and will  hopefully stabilise by November. The next two gigawatts will get commissioned in November, and should stabilise by January (2025). I think you will see the the cell plant in full flow in the fourth quarter,” said Sinha.

The Tata Power chief had earlier told Moneycontrol that the government's proposed launch by 2026 of a quality certification programme for solar cells (the Approved List of Models and Manufacturers — ALMM), is expected to support domestic manufacturers despite a global glut in solar equipment.

The ALMM, which is currently limited to solar modules, is a list of models and manufacturers of solar photovoltaic (PV) modules approved by the ministry of new and renewable energy.

Power demand

In the coming months, power demand is expected to pick up with the approaching winters after muted demand in the second quarter, said Sinha. The demand is expected to come from the industrial and commercial segments as well as domestic consumption, he added.

“In Q2, the power demand was less because of the monsoons, which were  very severe and prolonged this time, right from June to September, even October. But if you see the previous quarters, demand growth has been very high, in the range of 6 to 9 percent,” explained Sinha.

“I expect that it will again pick up in the subsequent quarters because there is a general increase in energy consumption everywhere, in industry,  commercial establishments, offices, data centres, and homes, ” he added.