Sector-specific risk

RISK

• Creditworthiness and business continuity of the customers

MITIGATION ACTIONS

• Sustained advocacy with authorities
• Diversification of renewable portfolio across various procurers, tariff structures and states

Technology risk

RISK

• Cybersecurity risk having the potential to impede operational transactions
• Information security - loss /misuse of vital data (operational and customer), cyber-attacks affecting LAN, WAN, SCADA, DMS, etc.

MITIGATION ACTIONS

• Automated detection and preventive solutions with managed detection and response
• Secure access to internet and applications on need-to-know basis
• Reinforcement of security policies and procedures
• Secure Source Code review before every release of application
• Enterprise-wide training and awareness programmes on information security
• Vulnerability Management Programme to proactively detect vulnerabilities
• Inputs from Computer Emergency Response Team (CERT) and other private cyber intelligence agencies
• Periodic testing to validate effectiveness of controls through vulnerability assessment and penetration testing
• Regular internal and external audits
• Investment in cyber insurance
• ISO 27001 certification for Digitalisation & Information Technology (D&IT), critical infrastructure and renewables
• Three cycles of phishing simulation exercise carried out followed by e-learning module on the same to increase awareness
• Introduced e-learning module on Information system management system (ISMS)
• Implementation of Security Operations Centre (SOC) as service
• Access list configurations and authentication bases access
• Replacement of existing systems with improvised secure solutions for SCADA, firewalls

Regulatory risk

RISK

• Amount Recoverable through future tariff (Regulatory Overhang/ Regulatory Assets)
• Mundra coal under-recovery
• Water securitisation of hydro plants: Risk of reduced generation
• Risk of violating environment norms

MITIGATION ACTIONS

• Advocacy with Mundra Power procurers and government at various levels
• Blending of cheaper coal from different geographies
• Advocacy with Ministry and regulatory bodies at various levels
• New avenues to utilise fly ash in ready mix concrete, slag cement, fertiliser among others for 100% ash utilisation
• Implementation of flue gas desulphurisation plant (FGD) and NOx abatement system (De-NOx)
• Appeal in Appellate Tribunal / High courts

Commercial risk

RISK

• Revenue Loss due to migration of high-end consumers on account of higher tariff
• Receivables from rooftop channel partners

MITIGATION ACTIONS

• Advocacy with MERC and filing petitions on CSS correction, revision of wheeling charges and new MYT petition
• Check on the wheeling impact of capex for distribution projects
• Rigorous contact plan of key consumers and extending value added services
• Instituted a credit policy with multi-level approval mechanism

Financial risk

RISK

• Risk of Capex Disallowance in T&D
• Availability of cost- effective capital: Availability of debt
• Forex risk
• Renewal of operating license of investments

MITIGATION ACTIONS

• Advocacy with State Transmission Utility (STU)/ regulator for acceptance of schemes through costbenefit analysis
• System controls for monitoring consumption and linkages of approved DPRs
• Diversification of lenders base
• Hedging of foreign currency exposures
• KPC received Izin Usaha Pertambangan Khusus (IUPK) i.e. Special Mining Business Permits (extension of Coal Contract of Work) being valid
  for 10 years upto 2031

Business risk

RISK

• Availability of fuel for thermal plant at optimal cost
• Natural disasters like cyclones, flood, drought, storm, earthquake, and lighting

MITIGATION ACTIONS

• Exploration of alternate coal sources and sourcing coal from multiple suppliers
• Formulation of Disaster Management Plan
• Resource and material planning

Climate change, water, and Business Continuity Plan (BCP)

RISK

• Climate change linked transitional risk:
  
  • Possibility of capping of carbon emissions
• Climate change linked physical risks:
  
  • For operations located in coastal area
  • Rise in water temperature potentially affecting processes
  • Extreme weather events such as floods and droughts, fuel, and water scarcity
• Risk of pandemic and other natural disasters

MITIGATION ACTIONS

• Comprehensive, digitised GHG tracking through ESG platform and adoption of Science Based Targets
• SBTi- Targets – validated
• Lowering of carbon intensity by focusing more on the renewable portfolio as well as venturing into energy efficient businesses like
  rooftop solar, EV charging, microgrids, etc.
• Increase of RE Portfolio strength
• Improvement in operational efficiency for thermal power plants
• Installation of pollution control and energy efficient equipment
• Discharge water temperature monitoring at Mundra and Trombay stations
• Adherence to stringent design parameters (to address climate risks) while developing new projects
  
  • Protection measures against extreme weather, flooding, etc.
  • All new projects will address climate change in equipment specifications to withstand extreme weather
  • Design changes/upgrades to accommodate higher operating temperature ranges
• Establishment of robust Business Continuity and Disaster Management Plan (BCDMP) evidenced through recertification on ISO 22301:2012 from the British Standards Institute (BSI)

Project risk

RISK

• Change in land / site due to unavailability of site or due to unavailability of transmission connectivity post winning a bid or contract
• Project execution timelines exceeding internal / Scheduled Commercial Operation Date (SCOD) target dates

MITIGATION ACTIONS

• Evaluate multiple sites / land parcels at time of bidding and creation of land and connectivity bank
• Consideration of a particular site for bidding once connectivity has been secured / applied on BG route and land identified, surveyed and firm offers available
• Explore procurement of Government land on lease
• Greater comfort on land and connectivity through timely identification, securitisation, and acquisition in line with the pre-bidden timelines
• Tight project monitoring and control from pre bid to post bid and till SCOD
• Dedicated project management teams for larger complex projects