In an interview with Power Line, R.K. Vishnoi, Chairman and Managing Director, NHPC Limited and THDC India Limited, spoke about the current state of the hydropower segment, analysing its evolution and growth over the years. He also shared his perspective on the power sector in the near to medium term and talked about NHPC’s upcoming projects in India and neighbouring countries, and its key focus areas going forward. Excerpts…
What is your perspective on the overall performance of the hydropower segment in the past one year? What are the key areas of concern?
During 2022-23, a total capacity addition of 16,854 MW was achieved in the country. Of this, the thermal capacity addition stood at 1,460 MW against a target of 6,350 MW and the hydro capacity addition was 120 MW against a target of 1,080 MW. Further, 15,274.42 MW was added through renewable energy sources, apart from hydro, during 2022-23.
The country’s total hydroelectric potential in terms of installed capacity stands at 133,410 MW. As of March 31, 2023, there was 42,104.55 MW of installed capacity operational under hydroelectric schemes, while 13,867.5 MW was in the construction stage. The hydropower sector demonstrates significant untapped potential with excellent growth prospects.
In terms of key challenges, hydropower projects are site-specific and have large-scale socio-economic and environmental implications. Hence, they grapple with various issues related to land acquisition (which is a time-consuming process), resettlement and rehabilitation, forest clearances, financial support, and large-scale development of infrastructure for accessing sites in remote areas. In India, water is a state subject. Further, most of the hydro potential lies in the younger Himalayan region in the north and north-eastern regions, with numerous geological uncertainties. Underground works and tunnelling in these regions present various challenges and delays in hydro project development. Despite these challenges, NHPC has successfully taken up the execution of hydro projects in challenging environments, and unpredictable & formidable geological conditions.
With over 47 years of experience in executing projects under the most challenging conditions, NHPC has the expertise to anticipate and tackle these conditions. With the successful commissioning of Chamera-II, Indira Sagar and Omkareshwar ahead of schedule, NHPC has set new standards in project implementation.
How has the pumped hydro storage segment evolved over time? What is the growth outlook?
India, as part of its commitment towards energy transition, aims to achieve a total capacity of 500 GW of non-fossil-based renewable energy by 2030. This large-scale integration of renewable energy into the national grid highlights the importance of energy storage capacity in addressing challenges related to flexibility (grid support/ancillary service), reliability (fast response/ ramping up/peaking support) and security.
Storage technologies such as flywheel energy storage systems, compressed air storage systems and hydrogen storage are at nascent stages of development, and their techno-economic details for commercial usage are not yet defined. To achieve the proposed energy mix and maintain grid stability and reliability by storing excess generation over different time frames (minutes, days and weeks) to meet the peak demand, it is crucial to explore and harness the available pumped storage potential within the country.
In line with the paradigm shift towards clean energy and the evolving energy market landscape in the country, there is an opportunity for the growth of pumped storage projects. According to the National Electricity Plan (NEP) of 2023, the storage capacity requirement for 2026-27 is estimated at 16.13 GW, with 7.45 GW from pumped storage plants (PSPs) and 8.68 GW from battery energy storage systems (BESSs), and storage of 82.37 GWh (47.65 GWh from PSPs and 34.72 GWh from BESS). By 2031-32, the storage capacity requirement is expected to increase to 73.93 GW (26.69 GW from PSPs and 47.24 GW from BESS), with 411.4 storage (175.18 GWh from PSPs and 236.22 GWh from BESS).
“The hydropower sector shows significant untapped potential and has excellent growth prospects.”
Further, NHPC is exploring the development of 18,125 MW of PSP capacity in various states across the country. NHPC has taken the following initiatives in this regard:
- Signed an MoU with the department of energy, government of Maharashtra, on June 6, 2023, for the development of pumped storage projects along with renewable energy sources (solar/ wind/hybrid) in Maharashtra. In the first phase of the pre-feasibility report (PFR) preparation for four pumped storage projects – Kalu (1,150 MW), Savitri (2,250 MW), Kengadi (1,550 MW) and Jalond (2,450 MW), totalling 7,350 MW – the PFR for the Savitri PSP has been prepared.
- Prepared the PFR for three pumped storage projects – the Indira Sagar-Omkareshwar PSP (525 MW), the Tekwa-2 PSP (800 MW) and the Satpura-2 PSP (1,500 MW), aggregating 2,825 MW – in Madhya Pradesh. The government of Madhya Pradesh allotted the Indira Sagar-Omkareshwar PSP (525 MW) to NHDC Limited (a subsidiary of NHPC) for implementation.
- Signed an MoU with the government of Odisha and the Grid Corporation of Odisha on June 23, 2023, to establish PSPs and renewable energy in Odisha. The MoU envisages setting up self-identified pumped storage projects of at least 2,000 MW and renewable energy projects (ground-mounted solar projects/floating solar projects) of at least 1,000 MW in the state. This will support the state’s decarbonisation and energy transition goals. The self-identification of PSPs is in progress.
- Signed an MoU with the Damodar Valley Corporation on July 20, 2022 “to explore the formation of a joint venture company for exploring and setting up hydropower and pumped storage project(s)”.
- Signed an MoU with the department of energy, government of Andhra Pradesh, on March 4, 2023, for the development of 2,000 MW of pumped storage projects in the state, either standalone or in joint venture (JV) mode. In line with this MoU, NHPC and APGENCO are at advanced stages of discussions for developing two PSPs, Kamalapadu (950 MW) and Yaganti (1,000 MW).
- Development of seven pumped storage projects with a combined capacity of 4,000 MW is under discussion with the government of Gujarat.
What have been the key operational highlights of NHPC in the past one year or so?
The key operational highlights of NHPC in the past two financial years are as follows:
- Generation: During 2021-22 and 2022-23, NHPC generated 24,855 MUs and 24,907 MUs of electricity, respectively, from its power stations.
- Capacity index/PAF: During 2021-22 and 2022-23, the capacity index or plant availability factor (PAF) stood at 88.19 per cent and 88.75 per cent respectively.
- Revenue from operations: During 2021-22 and 2022-23, NHPC’s revenue collections stood at Rs 83.09 billion and Rs 93.16 billion respectively.
- PAT: NHPC’s profit after tax (PAT) during 2021-22 and 2022-23 was Rs 35.37 billion and Rs 38.33 billion respectively.
- Dividend paid: During 2021-22 and 2022-23, NHPC paid dividends of Rs 16.67 billion and Rs 19.08 billion, respectively, to the Government of India.
- Net worth: During 2021-22 and 2022-23, NHPC’s net worth was Rs 334.86 billion and Rs 354.07 billion respectively.
What is the current status of NHPC’s upcoming and under-construction HEPs? What is their commissioning timeline?
NHPC, along with its subsidiary/JV companies, is currently involved in the construction of 16 power projects with an aggregate installed capacity of 10,449 MW. These include nine hydroelectric projects, namely, Parbati-II (800 MW), Subansiri Lower (2,000 MW), Teesta-VI (500 MW), Rangit-IV (120 MW), Ratle (850 MW), Pakal Dul (1,000 MW), Kiru (624 MW), Dibang (2,880 MW) and Kwar (540 MW), along with four solar projects, including Kalpi (65 MW, with 26 MW partially commissioned on July 9, 2022), and three CPSU scheme solar PV projects with an aggregate capacity of 1,000 MW in Gujarat, Rajasthan and Andhra Pradesh. In addition, NHDC is constructing one solar PV project (8 MW) and one floating solar PV project (88 MW) on the Omkareshwar power station’s reservoir.
Could you tell us more about NHPC’s upcoming projects in Nepal? What are the future plans for expanding the international footprint?
NHPC has signed two MoUs in Nepal. The first was signed with Investment Board Nepal (IBN) in August 2022 to develop the West Seti (750 MW) and Seti River-6 (SR-6) (450 MW) HEPs. The second MoU was signed with Vidhyut Utpadan Company Limited (VUCL) in May 2023 to develop the Phukot Karnali HEP (480 MW).
NHPC has timely submitted inception reports for all three projects to IBN and VUCL (West Seti on January 19, 2023, SR-6 on June 15, 2023 and Phukot Karnali on August 31, 2023). The detailed project reports for all three projects are currently being prepared and are likely to be submitted within the timelines specified in the MoUs (West Seti on October 19, 2024, SR-6 on March 15, 2025 and Phukot Karnali on March 31, 2024).
These projects are expected to significantly contribute to Nepal’s energy sector and help meet its growing electricity demand. As far as NHPC’s future plans for expanding its international footprint are concerned, the company aims to leverage its expertise in hydropower to expand its presence in the global energy market and will continue to explore opportunities in Nepal and other countries to further its growth and contribute to the renewable energy sector.
“Despite challenges, NHPC has successfully taken up the execution of hydro projects in challenging environments, hostile territories, and amidst unpredictable and formidable geological conditions.”
What are NHPC’s capacity addition and capex targets for the next one to two years?
By financial year 2025-26, NHPC aims to add 4,055 MW of hydropower and solar power projects, including through JVs/ subsidiaries, to the existing installed capacity of 7,097.2 MW as detailed below:
- 2,920 MW of hydro projects through the commissioning of the Parbati-II HEP in Himachal Pradesh (800 MW), the Subansiri Lower HEP in Arunachal Pradesh (2,000 MW) and the Rangit-IV HEP in Sikkim (120 MW).
- 1,135 MW of solar projects – a 600 MW solar project in Khavda, Gujarat, a 300 MW solar project in Bikaner,
Rajasthan, a 100 MW solar project in Kunta, Andhra Pradesh, balance 39 MW (out of the total 65 MW) solar project in Kalpi, Uttar Pradesh, and the 88 MW & 8 MW NHDC solar projects in Madhya Pradesh.
As per the Corporate Plan 2032, the capex targets for financial years 2024-25 and 2025-26 are Rs 68.71 billion and Rs 82.04 billion respectively (including NHPC equity infusion in its JVs/subsidiaries).
What are the company’s future plans and key focus areas?
Currently, NHPC has an installation base of 7,097.2 MW from 25 power stations, including three projects in the JV mode. NHPC is making extensive efforts to reach an installed capacity of 23,000 MW by 2032 and about 50,000 MW by 2047. A total of 16 renewable energy projects are already under execution, with a combined installed capacity of 10,449 MW. Currently, NHPC has six hydro projects aggregating 4,112 MW in the clearance stage, which will be implemented in the near future.
In addition, NHPC has commenced work on two more hydro projects, with a combined capacity of approximately 3,200 MW, recently allocated by the Government of Arunachal Pradesh to expeditiously bring them to the construction phase. Further, PSPs and hydro projects in Arunachal Pradesh are being lined up.
NHPC’s key focus areas include expanding the hydropower capacity, exploring business opportunities in JV modes, exploring new opportunities in renewables, developing strategic partnerships with other central public sector enterprises/organisations for business expansion/diversification, generating business from consultancy assignments, investing in state-of-the-art technologies, and expanding hydro and other renewable energy sources abroad to establish a global business footprint.
What is your outlook for the power sector in the near to medium term?
The Government of India presented the five nectar elements (Panchamrit) of its climate action plan at the 26th Session of the Conference of the Parties in Glasgow. These are: Reaching 500 GW of non-fossil energy capacity by 2030; achieving 50 per cent of its installed capacity from renewables by 2030; reducing the projected carbon emissions by 1 billion tonnes by 2030; lowering the GDP’s emissions intensity by 45 per cent by 2030 compared to the 2005 level; and achieving net zero emissions by 2070.
As per the NEP 2023 (prepared by the Central Electricity Authority), there are plans to increase the total installed capacity to 900 GW by 2032. In line the Indian government’s Nationally Determined Contribution commitment, NHPC has committed to add 16,348 MW to the existing installed capacity of 7,097 MW, envisioning 23,000 MW of capacity from renewables by 2032.