CESC Ltd has inked an agreement with a renewable power producer to procure 100 megawatt of electricity as part of its decarbonisation journey.
The long term pact marks the first such agreement by the company which is trying to pivot to an electricity distribution vehicle from a legacy thermal power producer.
“We will grow by distribution (and) we will look at renewables,” Sanjiv Goenka, chairman of CESC informed a handful of shareholders who were present at the annual general meeting of the company.
Outlining the future roadmap of the power producer, which supplies electricity to Calcutta and adjoining areas, Goenka said CESC is making a ‘huge effort’ in reducing carbon footprint.
“For the first time this year, we inked an agreement to buy 100 MW renewable power. It was a long term contract signed. And, whereas it (the renewable energy pact) is the first, it is clearly not the last,” Goenka, who is the chairman of RPSG Group, informed the shareholders.
CESC has three large coal-based thermal power plants, located at Budge Budge and Haldia in Bengal and at Chandrapur in Maharashtra. All put together, their combined capacity is 1,950 MW.
In the last decade, the company has focused more on acquiring distribution licenses than building power plants to ring fence the business from regulatory uncertainties. Apart from greater Calcutta, which is the crown jewel for CESC, it has distribution licences in Greater Noida (Uttar Pradesh), Kota, Bharatpur and Bikaner (Rajasthan) and Malegaon (Maharashtra).
In May, AMP Energy India had said that it has won a bid to supply 150 MW of renewable power from its upcoming wind-solar project to CESC Ltd. The power purchase agreement to this effect was signed in June.
Once the production from the asset starts, sources said, it would be connected to a grid for CESC to procure it. “The generating assets need not be where CESC has distribution license. Nor it has to be wheeled directly to its network,” the source explained.
Results
The record hit translated into a bump in profit for CESC which posted a 24 per cent rise in net profit in the first quarter. On a consolidated basis, profit for the period stood at Rs 368 crore in Q1FY24 compared to Rs 297 crore in Q1FY23, while revenue from operations went up by 5 per cent to Rs 4,310 crore from 4,102 crore in Q1FY23.
