India’s power demand is expected to grow by 7-8 per cent in the short run and is expected to register double digit growth in the long run, says Gurdeep Singh, chairman and managing director, NTPC Limited. In a recent interview with Power Line, Singh shared his perspective on the state of the sector, NTPC’s achievements and plans, as well as the outlook and the challenges ahead…
What is your perspective on the current state of the power sector?
As of August 2019, the country’s installed capacity is 361 GW, of which over 81 GW (22 per cent) is renewable capacity. The government’s thrust on renewable energy with a core focus on solar power dominated the capacity addition in the last two fiscals and the trend is expected to continue for a few more years.
In terms of growth of the sector, the peak demand met till now is 182 GW and is expected to reach 226 GW by 2021-22. The demand growth is at nearly 5 per cent in the current fiscal and is expected to register a growth of 7-8 per cent by the end of the year. With every Indian now having access to electricity, coupled with the government’s initiative of “24×7-Power for All”, there will be huge demand for power in future. Further, the government’s UDAY scheme started giving results in terms of a reduction in AT&C losses. Further, the Government of India has launched a scheme, Security Constrained Economic Dispatch (SCED), on a pilot basis with the objective of reducing the cost of power. Through this, there is a potential saving of about Rs 3 crore per day to be shared between the beneficiaries and the generators.
What are the biggest issues and challenges for the sector? Do you think the new LC mechanism for discoms is a step in the right direction?
The availability of domestic coal to meet the total requirement is yet to be achieved. There is still import requirement for blending by most of the generators. Coal India and the Railways are coordinating with power generators and putting all-out efforts for enhancing coal delivery. The government has also launched a portal, “PRAKASH”, for real-time monitoring of coal movement. During the second quarter, demand growth is shunted due to wide-spread heavy rains. However, we are hopeful of the second half of the current fiscal and expect to see momentum.
The opening and maintaining of adequate letter of credit (LC) as a Payment Security Mechanism under Power Purchase Agreements by distribution licensees is an excellent move by the government and this will help bring in discipline.
What were some of the significant highlights of NTPC Limited during the last 12 months?
NTPC has achieved significant milestones in the past year. Some of them are:
- We have crossed the 300 BUs generation mark, added 2,180 MW of commercial capacity in FY2019 and 2,780 MW till Q2 FY2020. For the first time, we have won 545 MW of solar bids under Tariff Based Competitive Bidding (TBCB). Our coal stations achieved a PLF of 76.81 per cent during FY2019 as against the national PLF of 61.07 per cent. The company has recorded a profit increase of over 20 per cent as compared to the previous year.
- Through the inorganic growth route, we have acquired the Barauni Thermal Power Station in Bihar and acquired JV partner’s equity in Kanti Bijlee Utpadan Nigam Limited and Nabinagar Power Generating Company Limited. One of our coal mines became commercial.
- NTPC has completed SAUBHAGYA works in Odisha as per the timeline. We have received the most coveted ATD BEST award in the training domain, consecutively three times in a row from ATD, USA.
What is the company’s current project pipeline and the expected share of coal, renewables and hydro in the overall project portfolio in the next few years?
As of now, NTPC’s group installed capacity is 57 GW. Our present project pipeline is 18 GW, which includes 370 MW solar and 1,320 MW coal-based capacity in an international venture in Bangladesh. As part of our corporate plan, we would like to reach 130 GW by 2032 with a fuel mix of 65 per cent coal, 25 per cent renewable, 5 per cent gas and 4 per cent hydro.
What are some of the new technologies that NTPC is working on to improve plant efficiency?
We have recently commissioned India’s first ultra-supercritical unit having a capacity of 660 MW at Khargone in Madhya Pradesh. This plant operates at an efficiency of 41.5 per cent, which is 3.3 per cent higher than the conventional supercritical ones. Through partnership with BHEL and IGCAR, we are working on the setting up of pilot Advance Ultra Supercritical Unit, having a capacity of 800 MW in Sipat. This will have an efficiency of 46 per cent. Apart from this, we have been working with technology providers for implementing digital tools to enhance power plant flexibility, efficiency and reliability. Currently, pilot testing is going on at one of our projects, Simhadri, and is expected to conclude by this fiscal.
What has been the progress in the past one year with regard to meeting the emission norms? What are the steps being taken to improve fly ash utilisation?
Significant action has been taken for meeting the new environmental norms by way of retrofitting our coal-based capacity. For meeting SOx norms, contracts have been finalised for over 75 per cent of the capacity and work is in progress. For the rest of the capacity, contracts will be finalised in the next six months’ time. Similarly, required action has been taken for NOx compliance.
As far as ash utilisation is concerned, NTPC has conducted a “Grand Ash Challenge” to invite innovative ideas for achieving 100 per cent ash utilisation on a sustainable basis. We received overwhelming response with participation pan-India. The expert team constituted has finalised the best three ideas and we are working with them for implementation.
Apart from the above, NTPC’s R&D wing had developed a “Geo Polymer” road, which has a feature of “quick setting” without the requirement of water. The roads are superior to conventional RCC and Blacktop roads in terms of strength. Further, the technology was accredited by the Indian Roads Congress (IRC). This has huge potential for ash utilisation. In collaboration with Indian Railways, we are also setting up ash depots for enhancing offtake. As a company, we are putting all-out efforts for achieving 100 per cent effective ash utilisation.
What has been the trend in fuel supply at NTPC’s power stations during the past year? What are the policy steps required for addressing the fuel availability issues in the sector?
The total coal receipt for our group stations in the first half of FY2020 is almost the same as last year. There is a marginal decrease in coal receipt due to various reasons at the mine end. We have been continuously taking this up with coal companies and the Railways for supplying the required coal at our stations.
NTPC’s pit-head stations are the cheapest generating stations in the country. Under the SCED scheme, pit-head stations, whose energy charges rate is low, are getting fully scheduled. Hence, maximum coal is required to be delivered to these pit-head stations not only for reducing the cost of power but also for reducing the congestion of the railway network. Further, the implementation of Annual Contracted Quantity (ACQ) aggregation at the Coal India level will bring the flexibility of delivering coal as per the requirement of generating companies.
How has been the production performance of the company’s captive coal mines? What are the plans and targets going forward?
The production from Pakri Barwadih and Dulanga is progressing well and as per the target. In FY2019, Pakri Barwadih production is 6.81 mmt, which is over the mine plan target, and from Dulanga, it is 0.5 mmt. In FY2020, till September, we have extracted 4.72 mmt. We are putting all-out efforts for opening three more mines in the current fiscal. Further, the production targets for FY2020, FY2021 and FY2022 are 10 mmt, 22 mmt and 34 mmt respectively. As of today, we are on track as far as captive coal production as per targets stipulated in coal mining allocation is concerned.
What is your perspective on India’s EV journey so far? How are NTPC’s plans in the e-mobility segment shaping up?
Though the concept of electric vehicles (EVs) has been around for a fairly long time, significant interest was drawn only in the past decade. The rising carbon footprint and other environmental impacts of fuel-based vehicles have pushed policy-makers world over to look seriously at EVs. The policy steps taken by the government to promote EVs like Faster Adoption and Manufacturing of Electric Vehicles (FAME) and reduction of GST, will pave the way for the EV journey. As far as NTPC is concerned, we have a dedicated group working on it. As of now, we have installed 34 chargers in Delhi, NCR, Bhopal and Visakhapatnam. We are also discussing with states for providing complete e-mobility solutions.
What are NTPC’s plans for the power distribution segment with the formation of the National Electricity Distribution Company?
We are evaluating various options in this regard. NTPC and POWERGRID have signed an agreement to explore further.
How is NTPC’s strategy for the acquisition of stressed assets shaping up? What are the key measures needed for reviving stressed assets?
We are keenly looking at the developments. We have done technical due diligence of a few assets. As per our assessment, there are some assets that are good and meet our requirement. If they are coming through the NCLT, we will be keen to look at it. In any case, we have offered to provide O&M services to assets if acquired by lenders.
What is your outlook for the power sector in the long term?
The power sector is vital for any growing economy. The government has set a target of a US$5 trillion economy by FY2025. To achieve this, obviously there will be a large requirement for power. During the first half of this fiscal, the country’s power requirement has grown by nearly 5 per cent. As per our estimates, the demand is expected to grow by nearly 7-8 per cent in the short run and is expected to grow more in the medium to long run. Due to limited capacity addition of fossil fuel-based capacities and with 175 GW of renewable capacity by 2022 and further going up to 450 GW, it is expected that coal plants will operate at higher utilisation factors in the long run. Further, there is a huge requirement for flexibilisation of coal-based capacity in the absence of enough gas and increased penetration of renewables.