00:00What do you see the impact being of the Indonesian coal output cuts for not just India, but for you at Tata Power?
00:08Good morning, Paul. Such a pleasure to be on your show.
00:12I agree that the Indonesian coal supply will get constrained in the coming year
00:18with the restrictions in the mining licenses that have been issued.
00:24But what we also find is that over the last few years,
00:30the coal prices have come down because of excessive supply.
00:34And we are an investor in a coal company, in fact, two coal companies in Indonesia.
00:41And we have been seeing that the last two years,
00:43our returns have not been commensurating with the type of returns we were getting in the previous years.
00:50So I think the mismatch of demand supply will get addressed to a very large extent.
00:58There may be a slight increase in the prices of coal.
01:03As you know, the coal prices are a pass-through in our power generation costs.
01:09And as far as we are concerned, as a company, we have two coal plants which use imported coal.
01:17So we should be, as far as we are concerned, we will be absolutely neutral in our returns.
01:23But yes, the tariff will go up a little bit.
01:28But on the overall basis, because most of the generation is using Indian coal,
01:34this will be a very, very small component.
01:36So can you tell us about your expectations for power demand this year?
01:42And are you planning to set up or augment additional coal-fired generation capacity?
01:50Yeah, I think last year was a very muted power demand.
01:54We had a very long monsoon.
01:55But this year, we are already seeing trends of increase in power demand
02:00already in the month of December and January, which are typical winter months.
02:05You don't see that sort of demand increase.
02:07But we had nearly 6% to 7% increase.
02:10The peak power also went up in the month of January and December.
02:14And we expect that the summer conditions from the trend that we are seeing
02:21will be a little intense this year, like we had the year before last.
02:25We can expect a peaking power requirement of 270 to 280 gigawatt.
02:31I think the country is geared up for this sort of requirement of power.
02:37While the new coal plants have been planted,
02:41this all will come up in 2030 and 32 period
02:46because they take four to five years to get implemented.
02:50But the existing capacities, whether it is coal, hydro, nuclear,
02:56or renewable solar and wind,
02:58will be able to address the requirement of power in this year.
03:03Yeah, I'd like to touch on renewables and nuclear in just a moment.
03:07But in terms of the demand picture,
03:09what opportunities do you see in terms of the growth of data centres in AI in India?
03:16So I think the demand has been very steady for the last few years
03:22in the range of more 7% to 8%.
03:26And we do expect that the AI impact on power demand will be there,
03:33but not so much.
03:34We are still talking of 1 gigawatt of AI capacity that will come up in the next one year.
03:40So it's not something which is going to be a game changer
03:46as far as the Indian power demand is concerned.
03:49But hopefully in the next 5 to 7 years, it will become substantial.
03:54But I can share with you that India has been adding a huge amount of capacity.
04:01In the last year, we've added nearly 45 gigawatt.
04:04So whatever will be the future requirement of power through AI needs,
04:10I think we'll be able to meet that requirement.
04:12Well, on the renewable side, you're looking at moving up the solar value chain
04:18in terms of manufacturing ingots and wafers as well.
04:22Can you give us an update on your plans there
04:24and also give us some information on the margins that you might face?
04:28So we already have an existing plant of nearly 4.6 gigawatt.
04:35The new one is a 4.3 and then we have a 300 gigawatt earlier plant.
04:40And the cell and module plant are operating at 95% of ability.
04:47And whatever cell and module we produce, we are able to sell within the country.
04:52Apart from this, we are looking at the option of doing integration in ingot and wafer.
05:00And we do feel that there is an opportunity,
05:03especially when the new restrictions will come from 1st of June 2028
05:10when the import will be not allowed.
05:14So I think there is an opportunity.
05:16We are examining the type of technology and the partnership that we need to do.
05:21And hopefully in the next few months, we'll be able to close on this.
05:27Well, you've also been examining nuclear technologies as well,
05:30as you touched on a moment ago.
05:32You've been doing some due diligence.
05:34Can you talk to us about which technologies look appealing to you so far
05:38and what might be next?
05:41There are a couple of technologies that we are looking at.
05:45There is, of course, the Indian technology,
05:48which is being promoted by nuclear power corporation.
05:52This is the Bharat small modular reactors.
05:55These are 220 megawatt units.
05:58We are in discussion with both the NPCIL and Department of Atomic Energy.
06:02Similarly, we are in discussion with other manufacturers globally.
06:10What we need to see is that how we can bring down the cost of power from nuclear power plants
06:16and also on a long-term basis ensure that the supply of raw material,
06:22in this case, the fuel that is required, how do we source that
06:28and what pricing will be done for that.
06:31So tying up uranium supply as well as the technology will help us
06:37to optimize the cost of production of power from nuclear plants.
06:42Is there anything you'd like to see from the government in terms of legislation
06:47to make the pathway to nuclear energy smoother for you?
06:53The government has approved that private sector can invest.
06:58There were two basic things that had to be addressed.
07:01One was in terms of allowing foreign technology
07:05and the second one was the public liability that has been taken care of.
07:11So I think the groundwork has been done to operationalize it,
07:18certain rules, regulations, and I think regulatory oversight has to be implemented.
07:26We expect that within this year, all those will get implemented.
07:33And we have been, in fact, looking at various states
07:37where we can locate these small modular reactors,
07:42including availability of water.
07:43And I think we'll be all set in the next 12 to 18 months to take it to the next stage.
07:51In terms of government involvement,
07:54I'm just wondering if you can give us your thoughts on the most recent budget
07:56and the implications there for the power sector.
07:59I think the government has consistently supported the power sector.
08:06There is more funding that has been provided, especially for the nuclear space.
08:11More funding is being provided also for transmission.
08:15And there are a whole lot of other changes which are expected in the distribution sector
08:20where the Electricity Act amendment is being proposed.
08:24So I think the big bank support that has been there for the power sector will continue.
08:32And this is one of the big reforms that the government has been looking at.
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