Ladies and gentlemen, good day. Welcome to Q1 FY 24 earnings conference call of JSW Energy, hosted by JM Financial. As a reminder, all participant lines will be in listen-only mode. There will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Sudhanshu Bansal from JM Financial. Thank you. Over to you.
Thank you, Yashashri. Good evening, everybody, on behalf you all to the conference call of JSW Energy Limited to discuss the first Q1 FY24 results. We have with us the leadership team of JSW Energy, comprising of Mr. Prashant Jain, Joint Managing Director and CEO, Mr. Pritesh Vinay, Director of Finance and CFO, Mr. Bikash Choudhary, Head, Investor Relations and Treasury. Thank you so much, sirs, for your kind presence and giving JM Financial the opportunity to host the call. I would like to hand over the call to Mr. Prashant Jain for opening remarks and taking the call forward. Over to you, sir.
Thank you. Good evening, ladies and gentlemen. During the quarter gone by, we saw the power demand very muted at 1%, primarily due to in the month of April and May, we saw the unseasonal rains and the power demand was close to flat or negative. However, the power demand improved in the month of June at 4.5%, and in the July also, it is going robust at 5.5%. The total installed capacity in the sector stands now at 422 GW. During the quarter, there was a total capacity addition of 5.8 GW, of which 4.5 GW was renewable capacity, with 1.1 GW of wind and 3.3 GW of the solar. During the quarter gone by, the total energy generation was up by 14% for the company.
Of that, 911 million units came from Mytrah portfolio, another 106 million units from group captive and SECI X portfolio, and 421 million units additional came from Ratnagiri. There was a lower water at all our hydropower plants. Around the country, this has been an issue. There was a drop of 428 million units from our hydro business. In the Barmer plant, there was a scheduled maintenance, because of which 136 million units were down. With that, the total generation of the from the company during the quarter was 6.7 billion units. In terms of the EBITDA, which was up by 18%, INR 370 crore EBITDA additional came from Mytrah portfolio.
Actually, the pro rata pro forma EBITDA for the quarter for Mytrah was INR 370 crore, but two of our SPVs, they were got consolidated later as part of the April month. That is INR 13-30 crore is not coming into this. There is also, as I mentioned, because of Barmer as well as hydro, lower generation was there, but these two assets are under the long-term PPA. There is a INR 80 crore EBITDA, lower EBITDA as compared to previous year, but this entire INR 80 crore EBITDA will get recouped in the subsequent quarter. In the two-part tariff PPA in our Barmer plant, we get our capacity charge based on 80% availability, and we will be achieving the 80% availability, so this will get recouped.
Similarly, the energy generation, when we generate beyond the design energy, which we have been achieving all these years and which we will be achieving this financial year also. The INR 66 crore EBITDA reduction as compared to the previous year in hydro and INR 14 crore in Barmer, both will get recouped during the rest of this financial year. The INR 91 crore impact came because of the lower merchant sales, because of the subdued demand in the months of April and May. We are quite confident that the tariffs are quite robust, and the spreads are also very good. During the rest of the financial year, we will be achieving what we have budgeted and planned for in terms of the merchant sales. In the country, we have been seeing the good trend for the solar generation.
The CUF for the country as a whole has been consistently improving. Our facilities, both at Vijaynagar as well as Mytrah, they did exceptionally well. Compared to the P90 level, Vijaynagar solar plant generated 145 million unit compared to P90 generation of 134 million units. Similar was the trend in Mytrah. We improved our plant availability by 70 basis points, in Mytrah, first time, it generated 216 million units in the first quarter, which is compared to 193 million units of P90 generation. The Mytrah plant integration, as well as the plant performance, is better than what we had planned earlier. Similar was the trend in the wind.
In case of Mytrah, when we took over the assets in the month of March, on 29th of March, the total machine availability was in the range of 85%, which has been improved, and as I am speaking, the machine availability is 97.5%. By middle of next month, we will be achieving 99% availability, which we have planned for. During the quarter, the total machine availability was improved by 680 basis points, and we generated 695 million units. There were total 80 turbines which were out of order.
Right now, only three turbines are out of order, and we are quite confident that the plan which we have envisaged for Mytrah, in terms of the EBITDA improvement as well as in terms of the total generation improvement, we are on track ahead of schedule. The planned EBITDA of INR 1,650 crores, which we had guided for the next year, we will be seeing a very encouraging trend during the current financial year itself, and we will be increasing the trend and improving the trend expeditiously. In terms of the project updates, the Ind-Bharat performance on the project integration is quite encouraging and quite good. We were planning to start both the units by end of the financial year.
I'm happy to share when we opened the turbines for the maintenance as well as the boiler, we got very positively surprised with the condition of the plant, and we are on putting the unit on bar within this month. With the transmission line and other things, we are expecting that by October or maybe in the current quarter itself, we will be commissioning the first unit. The second unit is also expected to get commissioned in the current financial year, so we are expecting that we will be having generation for one unit of 350 megawatt in the second half of the year. Which will be improving our generation as well as our EBITDA profile going forward.
We have already started participating in the auctions in the uncertain . Some of the coal we have already secured, and balance coal we are securing in due course of time. On update on Kutehr is quite good. We have already completed 98.5 or 99% of the tunneling. Powerhouse erection has already been started, and it is moving as per the schedule. The recent rains in Himachal Pradesh, they disrupted because of certain landslides in and around our Kutehr project. Things are getting normalized, and then in next 7 days' time, we will be back to normal.
On our operating assets also in Himachal, there was no impact of the rains other than there was a preventive shutdown we had to take because of higher silt level, which was there in the basin. There the both plant as well as the people are in a absolutely safe and there was no impact whatsoever. On our city projects, the, as of now, 150 MW is fully commissioned. We are on track what we have guided for, and then all three sites, Karnataka, and two sites in Tamil Nadu, they are the erection and commissioning is going on in full swing. In terms of the merchant market, which I touched upon in the initial remarks, which is looking quite attractive, the rates are also quite attractive.
During the quarter, the rates were very good at close to INR 5.5. The volumes were also up by 34% during the quarter. Also going forward, the way the demand trend and the prices we are seeing, as we are speaking in the monsoon month, we are seeing the good prices of close to INR 5-INR 5.5 on a RTC basis, which are quite remunerative for our company. We remain quite optimistic to recoup what we have seen a little blade back compared to the previous year in the Q1. In the rest of the year, our merchant volumes will be quite good, and same will be the spread. Now I am asking Mr. Pritesh Vinay to take over and explain on the financial performance.
Thank you, Prashant. A very good evening to all the participants. You know, so maybe I'll take a leaf out of where Prashant stated about the overall generation. If you look at the total net generation for the quarter was up by 14% at about 6.7 billion units. The total revenues for the quarter stood at just over INR 3,000 crore, which was actually down by 3% YOY, compared to a higher net generation. This is primarily because you would be aware that for our thermal businesses, the fuel cost is a pass-through. On a YOY basis, the coal prices have come down sharply, and therefore, from a pass-through point of view, that reflects in lower tariffs and therefore lower realizations.
However, that is largely EBITDA neutral. So that is from the revenue side. Prashant has already talked about EBITDA for the quarter stood at 1,307 crores. I'd just like to spend a minute more on that. You know, if you have access to our results presentation, which was uploaded sometime back, and if you look at slide number eight, where we've given a an EBITDA bridge, this kind of captures what were the moving parts. Prashant mentioned that if you look at Mytrah portfolio as a whole, actually, for the quarter, Mytrah assets delivered an EBITDA of 400 crores.
From a consolidation impact point of view, one of the SPVs got acquired on 6th of April, the second 150 MW SPV got acquired on 15th of June. That was available only for the last 15 days of the quarter. On a pro- rated basis from a consolidation accounting point of view, we've shown INR 370 crores, but the underlying performance is actually INR 400 crores. INR 30 crores was the additional EBITDA that we got from the new solar project, 225 MW, as well as the SECI project of 150 MW, which were operational through the quarter. Prashant did talk about the impact of lower hydrology at hydro, which impacted generation.
Hydro generation was down by 27% YOY, but in terms of EBITDA, that was a drag of INR 66 crores. However, if you look at our past track record, as long as we are able to meet the design energy, which we have consistently done every single year, for the 20-year and the 12-year operating track record at both Baspa and Karcham Wangtoo, we are able to recover this in subsequent quarters. Incidentally, while the PLFs were lower, the plant availability during the quarter stood at a very healthy 108%, against a normative requirement of 90% to recover the full capacity charge. Similarly, for Barmer, due to certain planned shutdowns, the availability was lower, and therefore there was no full recovery of capacity charge was not there.
However, again, like we have done for every single year in the past, this item is dependent on availability for the entire fiscal year, and we are very confident that, like every single year in the past, for the, in the remaining nine months, we will be able to get to overall availability. Therefore, I would like to see timing mismatches likely to be recouped in the remaining nine months of the year. Of course, Prashant did talk about the impact of lower merchant sales, which was about INR 90 crore drag. Of course the increase in O&M expenses, et cetera. That is the bridge on EBITDA side. I'd like to also take a minute on explaining the finance cost for the quarter.
If you look at the headline overall INR 193 crore last year, Q1 has landed at INR 486 crore. If you look at slide number 9, where we've given a detailed bridge to explain the impact of that. INR 170 crore is the incremental interest due to the debt on the Mytrah portfolio, which we had explained last time, that was done at the time of acquisition. On account of a very attractive refinancing and debt sizing that we have done, we prepaid the older lenders of Mytrah portfolio, because of which there was a one-time pre-payment, or the the refinancing impact of about INR 40 crore. This is a one-time item, will not be recurring going forward in subsequent quarters.
The impact of additional debt due to Mytrah acquisition, as well as the levering up of the thermal balance sheet that we are doing to fund our growth projects in the form of sponsored equity contribution, that was a combined impact of about INR 80 crores. So on a recurring basis, everything else remaining the same, this number is likely to be more in the order of INR 445 crores going forward, unless we lever up the thermal assets a bit more, which will again get added. That's only finance cost bridge. Therefore, coming all the way down to the profit after tax for the quarter. On a headline basis Q1 of last year, the profit after tax stood at INR 560 crores.
Last year, first quarter, we had received a repayment of a loan that was given to a third party in the prior years, and therefore that was an exceptional gain of INR 120 crores. Stripped off that, the underlying profit after tax for the first quarter of last year was INR 440 crores. Again, this on the same slide number nine, if you look at the bottom portion, the PAT bridge explains in detail that how the Mytrah assets and the new renewable assets that we are adding, added about INR 85 crores at the PAT level on a combined basis. There was a roughly INR 55-60 crore drag due to the timing mismatch of the full capacity charge recovery at Hydro and Barmer, and likely to be recouped in the remaining part of the year.
The impact of uncertain , as well as the one-time refinancing impact. The merchant, lower merchant sales and profitability impacted our PAT on a YOY basis by almost close to INR 100 crores. That is the PAT bridge. The next number that I would like to talk about is the leverage and the leverage profile. If I request you to look at slide number 11, which shows the net debt movement on a sequential basis of what has happened since March through June. You'll see that on the operating assets, which is the dark portion on the bottom portions of the chart, the net debt stood at over INR 10,100 crores.
This has gone up by almost INR 160 crores quarter-on-quarter due to additional debt on the operating businesses. On the Mytrah portfolio, actually, the net debt has come down by about INR 350 crores on a quarter-on-quarter because of, as Prashant was saying all the higher generation due to better availability of machines translating into higher EBITDA, and some working capital release in terms of liquidation of receivables. Therefore, the cash has come, has gone up, there's been some amount of debt repayment as well.
For the blue portion, which is the amount of debt which is sitting for capital work in progress, which is likely to accrue revenue and EBITDA in future years, that went up about INR 920 crores quarter-on-quarter to just over INR 4,500 crores. Net debt, if you look at on the operating businesses, there's about INR 18,400 crores of debt sitting, which is being serviced by a normalized cash flow of close to INR 5,300 crores, which translates to a net debt to EBITDA on the operating business of 3.5x.
This is consistent with the guidance that we have shared earlier with the markets as part of our Strategy 2.0, that when we pursue growth, we would expect our sustained normalized net debt to EBITDA to stand in the 3.5-4 times range. If you look at slide number 12, this shows a bunch of matrices, but I'd just like to point out two. One is the top right-hand chart where we track the cash returns on the underlying business. We continue to track at a more than 17% cash returns on adjusted net worth for the last several quarters.
If you look at the weighted average cost of debt, excluding the Mytrah portfolio, that stood at just about 8.5%, and including the Mytrah portfolio, is at about 8.7%. The last number I'd like to talk about before I throw the floor open for questions, is on the receivables. If you look at slide number 13, on a year-on-year basis, the headline receivable numbers. Sorry, on a quarter-on-quarter basis, the headline receivables have come down by 20%. In terms of base sales outstanding, it is largely similar. You know, it was 60 days in March. It stands at about 58 days at the end of June.
The encouraging trend is this, that the overdue proportion is coming down, the share of overdues are lower. As a matter of fact, in the first two weeks after the end of the quarter, there's been a strong collection. We've already received close to INR 240 crores, and as we are speaking today, the overdues are nil. Similarly, on the Mytrah portfolio I'd just like to request you to look at slide number 60, where we've shown what's happening with the Mytrah receivables cycle. There again, there's a very encouraging trend. If you look at the bottom portion, every month consistently, what we are collecting vis-à-vis what we are billing, is between 125%-200% of that.
Again, that liquidation of receivables trend continues to be healthy. With that, I'll take a pause and, operator will request you to open the floor for Q&A, please.
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. All participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. We have our first question from the line of Mohit Kumar, from ICICI Securities. Please go ahead.
Good evening, sir. Congratulations on significant progress on some of the under construction assets. My first question is on the EBITDA of Mytrah. I understand that this is a wind-dominated portfolio, so do you think, and the first quarter seems to be a decent number. My question is: Do you think that we are on target to achieve INR 16 billion EBITDA in FY 2024, or do you think it is likely to materialize in FY 2025 full year?
Thank you. Thank you for your question. There are the two aspects of it. One aspect is that the putting the turbines on track and at improving the availability of the assets. What was ambitious to go and reach up to a 99% availability was by December 2023. As against that, I have already given a guidance that as we are speaking, only 3 turbines are down, and then by 15th of August, we will be at 99% of availability. What we planned, we will be achieving 5 months or 6 months at 5 months ahead of schedule. That's part A. Same is the situation in terms of the solar. We had given a guidance that we will be achieving INR 1,650 crore EBITDA-
... in the FY 2025. Our guidance is still remains 1,650 for the FY 2025. Current year, we are expecting that the existing majority of the wind season will or part of the wind season will also be captured in during this year. We will be doing better than what we had planned. Originally, I think if I don't know. Okay. Yeah, we have talked about 18-24 months time frame, EBITDA improvement, but I think we are reaching on a achievement side is close to 6-7 months time frame. Some of the wind season is going away by the time all these things are there, but we will be doing better than what we had planned.
Second question on the PSP, so have you financially closed that project? Have you started the work on that particular project? How many PSP sites are under our control, in the sense the sites have been handed over to us?
We have already close to 9,000 megawatt of the pumped storage projects have been allocated to us. Of that 80% of the projects, we have already prepared the DPR, they are in a different stage of the approval. 2 of the projects we have already received the terms of reference. 1 of the project we have already completed EIA, EMP, and public hearing is also completed, forest land approval is in process. We are expecting that in the current financial year, at least 1 project, we will be starting the construction, which, for which we will be taking the necessary approval and entering into a final PPA and thereby the financial closure.
Next year, we are expecting two projects should go into the that position by end of next financial year. This is how it is there. Each project is at a different stage, but one project will achieve all approvals and PPAs, as well, as well as other things to start the construction. That will be a project which we will be building for our group captive and which is our, within our steel plant, where majority of the land and other things are also in place, and where all EIA, EMP has been completed. Second project will be where we have already secured, like, LOI from the government of Karnataka. The third project is under the bidding stage and various approval stages.
My last question is, given that a lot of new projects where a lot of new tenders from SECI are coming, RTC, hybrid, we haven't seen you participating in the solar bids. Do you think that our participation will increase materially under the hybrid RTC, given that we have portfolio of projects we have, which should be ideally more competitive?
We are looking at all bids and also the cost of doing the project. We are in the process of building a future pipeline beyond December 2025, because all the existing projects which are under commissioning, will be over by December 2025. We are now in the process of building a pipeline. We are evaluating the group captive requirement, which we have come across because of the decarbonization strategy for the JSW Group, and we have received certain inbound queries from our JSW Group to evaluate and work on that, as well as the SECI bids.
Within that matrix, we will be closing that pipeline in next 1 or 2 quarters, which will be filling up for FY 2025, 2026, 2027 project execution.
Understood, sir. Thank you.
Thank you. A reminder to participants to press star and 1 to ask a question. We have our next question from the line of Karan Gupta from CAVI Capital. Please go ahead.
Thank you for the opportunity. I just wanted to check, given the current seasonal rains, what does that imply for availability of water for your hydro projects for the coming quarter?
They are running at 110%, all projects.
Great. Then on merchant power tariffs and the current coal prices, which have crashed significantly, what are your thoughts for the next year?
No, we are making a good spread because the coal prices have also come down substantially, so. The only thing is that post the monsoon period, as the demand revives.
Mm.
it will be quite healthy. As regards to during, even in the monsoon period, the current tariffs are very good.
Is there any sort of a conversion of, say, coal prices to the margins that you generate on merchant power? Like, is there something that you can share along those lines?
I think what I'm trying to say is that there is a positive spread, based on the current imported coal prices as well as the prevailing merchant power prices. The prices wise, I think we are not concerned. We are more concerned about the demand for sale in order to push more volumes. As the demand improves, there will be a good money to be made into the merchant market.
Fair enough. Lastly, recently there was an announcement by the UP government that they're setting up a new coal power plant. I think it was about 1.6 GW. The pricing on that was a little surprising. It was a little more than INR 11 crores a megawatt. Just wanted to get your thoughts on that.
Tough for me to comment on anybody's plan. I think it takes anything between INR 4.5 crore to INR 4.8 crore or INR 5 crore per megawatt now, including the cost of FGD and considering the cost of inflation. The power prices based on new projects are also going to be close to north of INR 4.5. If you see the recent tender which has been done and concluded for the medium term, the power tariffs that have been discovered are in the range of INR 5.20 to INR 5.50 at first.
Right. Thank you very much.
Thank you. We have our next question from the line of Anuj Upadhyay from Investec. Please go ahead.
Yeah, thanks for the opportunity, sir. Sir, can you elaborate something on the green hydrogen project and also on the module manufacturing things? I guess we have shifted the base from Odisha to some other state. Could you throw some light on that front, sir?
We will be building this project in the state of Rajasthan. We have already identified the land and the proposal with the government of Rajasthan for the necessary incentives and other things are in final stage of approval. Also the plant and machinery negotiations are going on. The project is on track to be commissioned by March 2025. As regards to the hydrogen project, the preliminary work has already been started. Detail engineering is going on, and the ordering of the electrolyzers is and commercial negotiations are which is going on. We are on track to commission the project in the quarter ending March 25. Both these projects will be being commissioned by that time.
Okay, sir, the off taker for the green hydrogen would be our group company, or we are also looking out for some-
We have already disclosed and declared after the board approval of between JSW Steel and JSW Energy. This will be used for the making of the green steel. It is on a cost plus basis on a 15% ROE for the project, for a 7-year contract, and the total project cost has been amortized over a period of 7 years, and post that, it will be mutually discussed.
Okay, sir. Lastly, on the battery project which we have done, I believe 40% of that capacity is still open. Any guidance on that front, sir, whether we are looking for another long-term arrangement from that or we will be in the short-term market?
No, we are purposely keeping that in a short-term market at this point of time, because we see a quite a big arbitrage. I don't know whether you are seeing the trend in the market now. The fluctuation between the off-time and the peak time power prices is anywhere between INR 4. There is another ancillary market for a pro-circle management also, wherein there are certain incentives for the battery project. We believe that for some more time, there will be a huge opportunity for money to be made in this particular segment. However, we are also mindful about if there are any great opportunity, we can lock in that capacity, but we feel that it will be quite speculative at this point of time.
It is a similar situation like for Ind-Bharat. I have so many inbound calls for doing a long-term PPA from Ind-Bharat. We don't want to do the PPA at this point of time. We want to keep the capacity open in the merchant.
thank you, sir. If you would please allow me to chip in with another question, sir. It's related to the new capacity. Like, we already have a lot of, I mean, sequentially, is there 9 and 10, which is to be scheduled, year. Considering the fact that the government has mandated around 50 gigs of renewable capacity to be stored in from the current fiscal. Are we aggressively looking into those kind of projects, or for the time being, we are focused largely on the from hydro or the green hydrogen?
I believe you are aware about our Strategy 2.0 where we are in. We have very categorically talked about that, how we are seeing the capital expenditure every year, and also we are talking about the capacity addition. In my comments to a previous caller, I have explained that post December 2024, we are now building the book in between the group captive as well as various other opportunities. There is a certain amount only we can do that as a capital expenditure every year due to availability of capital, as well as the execution, which is possible because of the connectivity as well as resources which are available with us. We are trying to balance out considering the maximization of our returns.
We are carefully selecting the options and opportunity so that we make the best possible ROEs and equity IRRs. This is what we are doing, and in next 1 or 2 quarters, you will see we are building a book which is beyond December 2024, and you will get a visibility of another 4 to 6 gigawatts to be built over a period of next 3 years beyond December 2024 or March 2025. You will get the visibility up to 2027, 2028.
Very good. Thanks for the opportunity and wish you best luck.
Thank you. Ladies and gentlemen, to ask a question, please press star and one on your phone now. We have our next question from the line of Shreyans Daga from Barclays. Please go ahead.
Hi, thank you for my question. I know you've answered a question on hydro projects, but specifically, there was a media report that Karcham Wangtoo and Baspa have been closed due to the floods in Himachal. Can you give us some light on the two projects?
There was no flood. Basically, you need to understand, every year during this time, when the rain happen or cloudburst happen, because these, this particular basin is having, is coming from Spiti Valley. If you have been to that side, then it is purely about the sand mountains. Because of which, the sand level or silt level goes up into the water. As a precaution, there is a grid code. The moment the sand level goes beyond 5,000-6,000 ppm, all the plants open their gate, and then they go in a auto flush mode so that there is no impact on the turbine. It happens irrespective of the heavy rains. It always happen during this time. The units were down for 72 hours approximately.
The moment the silt level went down to permissible limit, they all started running, and all of them are running in a full load, at 110% load. As I said, that both asset as well as the people, everybody is safe, and there is no disruption of whatsoever, whether temporary or permanent. In case of Kutehr, because of the landslide, there is a little bit of disconnectivity and which is being restored. Some of the connectivity has been restored. Balance will be restored in next four to five days, it will become normal.
Yeah.
Shreyans, to be specific, if I may add, as Prashant mentioned the Baspa units, went on full load as of 3:30 P.M. yesterday, and Karcham Wangtoo, all the four units went into full load at 5:00 P.M. yesterday. Prior to that, for 72 hours, purely from a grid code and safety, et cetera, point of view, due to high silt levels, they were shut down. Yeah.
Okay. Okay, thanks. Thanks. That's all.
Thank you. We have our next question from the line of Manas Arora from Dinero Capital. Please go ahead.
Hello, good evening, sir. I had a question about wind energy. Sir, I wanted to know, are we planning any further CapEx into wind energy apart from our under construction projects?
Yeah, as I said, that we have planned to do close to 1.5-2.2 GW of the project every year. Beyond December 2024, we have to build the book. We are absolutely in a comfortable position to build that book. As I said, that there is a group captive requirement of close to 5-6 GW to be built over a period of next 3-4 years time frame, as well as there are other opportunities which we are having in terms of the hybrid and sticky bits. We are carefully evaluating and seeing the equity IRRs, where we can maximize our return. In next two quarters, we will build a book beyond...
25, You will see that thing happening, There will be a complete visibility of that book which will be executed. You know that we have been always talking about, that we don't build the book well in advance, which cannot be executed over a period of next 24 to 30 months time frame. We build the book only when we can execute immediately. This is how we have been, because most of the time, if you are building the book ahead of the schedule, then you are forced to compromise on a lower returns. That's what we have not been doing, and we have been very picky and choosy about it. There will be a big book you will be seeing to be built in next 1 or 2 quarters.
Sure, sir. My next question is, sir: are we going to participate in SECI 2.5 GW tenders for the wind ones?
We are mindful of the tariffs. We have seen the encouraging tariffs in the recent time. We are seeing that the module prices are also going down. It's quite encouraging. We will balance out, because we want mid-teen to high-teen kind of a returns, and that's what we always look for.
Okay. Thank you, sir, so much, sir. That's all from my side.
Thank you. We'll take a last question from the line of Chirag Acharya, an individual investor. Please go ahead.
Hello. Due to the disturbances in northeast side, what impact in the generation we are expecting during the year?
No more impact now. Whatever was supposed to happen has happened, and now the demand is also picking up. As compared to the last year, the July demand is, as of now, for the month as a whole, is close to 5.5% up.
Okay. Sir, I want to understand about the battery, that storage, business, in which we forward recently. Can you share some basic understanding, like, what it meant to be later on for our company, and what is the potential of that business?
Storage is a big opportunity for the, to be built upon. As per CEA, by 2030, in order to manage the grid wherein 500 gigawatts of the renewable capacity will be there, you need 320 gigawatt hour of the total storage capacity, which will be met by both BESS as well as PSP, pumped storage projects. Which talks about, if 320 gigawatt hour for 6-hour storage, it means you are talking about close to 500, sorry, 50,000 megawatt capacity. So we see this is a great opportunity for JSW Energy, and we have part ventured both in BESS as well as PSP segments.
Both segments, we have got the first vendor with us, and so it's quite encouraging and we have got a large resource pool and we will be growing our company in this particular segment going forward.
Sir, what CapEx we incurred for this venture?
It is depending upon the capacity. typically if you are building a pumped storage project, anything between INR 3.85 crore per megawatt to INR 7 crore per megawatt, depending upon the configuration of the project, size of the project, location, and the storage capacity. This is how these projects are built, and typically 5.5 hours to 8 hours of the storage capacity and 75%-85% of the efficiency. In terms of the battery projects, it depends on the battery prices, and anything between $300-$400 per kilowatt hour of the system cost at this point of time, which will be certainly going down to $150-$300 going forward over a period of time as the battery prices goes down.
Okay. Thank you so much. All the very good.
Thank you. I now hand the conference over to Mr. Sudhanshu Bansal from JM Financial for closing comments.
Thank you so much to the management of JSW Energy for giving us, the JM Financial, the opportunity to host the call. I thank all the participants for attending this conference call. Sir, if you would like to have give any closing remarks?
Thank you, Sudhanshu. Thank you, everyone. In case there are any follow-up questions, please feel free to connect with our investor relations team. They'll be happy to clarify everything. Thank you again.
Okay. Thank you very much, happy weekend to all of you. Thank you. We can close the call.
Thank you. On behalf of JM Financial, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.