In a recent interview with Power Line, Gurdeep Singh, Chairman and Managing Director, NTPC Limited, shared his views on the future of electricity demand in India, the outlook for coal-based power generation and the key challenges in meeting renewable energy targets. He also discussed NTPC’s initiatives in the green hydrogen space and the company’s short- and long-term priorities. Edited excerpts…
What is your perspective on the current power generating capacity in India?
The Indian power sector is undergoing a significant transformation, driven by a combination of increasing demand, government reforms and a strong push towards non-conventional sources of electricity. As the third-largest producer and consumer of electricity globally, India currently stands strong at more than 452 GW of installed capacity. Along with green power, the demand for green chemicals and energy storage systems such as battery and pumped hydro storage will also rise rapidly, presenting huge opportunities in this space for everyone.
While renewable capacity addition is rapidly increasing to meet the 500 GW capacity target, seasonality, intermittent availability and storage limitations are some of the associated challenges. Efforts are being made to address these issues through policy initiatives and technological advancements.
However, the integration of renewables into the grid continues to face challenges due to the need for greater flexibility of coal-based power stations given the limited availability of gas and hydro capacity. In the past few months, storage prices have declined, a trend that is likely to continue. This decline in storage prices has the potential to help address these challenges.
As per estimates by the Central Electricity Authority (CEA), an additional 80 GW of thermal capacity is required by FY2032, alongside renewables, to meet peak demand and provide energy security to the nation. This presents a unique advantage for organisations such as NTPC that have a strong presence in the sector. In addition, nuclear is going to play a crucial role in the
days to come.
What is your view on future electricity demand in India, given the fact that actual demand has exceeded estimates in recent times?
India has been a key engine of economic growth, contributing 16 per cent to global growth in 2023. As per Vision India@2047, the government has set a goal of making India a $30 trillion economy, with per capita income moving to the developed economy zone. Hence, the economy is poised to grow rapidly.
As electricity is a key input for all sectors, demand for electricity is expected to grow in proportion to economic growth. This growth will also be driven by increased urbanisation and the electrification of other sectors. As per NITI Aayog, electricity demand under the business-as-usual scenario will be 5,651 BUs in 2047.
The demand has consistently exceeded projections, with peak demand reaching new highs. As per CEA estimates, the peak demand is projected to reach 335 GW by 2030, reflecting India’s ongoing economic activity. Further, electricity demand is expected to grow at 6.7 per cent till FY2027 and at 5.3 per cent till FY2032. We are aware that India has set an ambitious target of installing 500 GW of non-fossil energy by 2030, which includes 280 GW of solar power and 140 GW of wind power projects. This requires an average annual capacity addition of 40-50 GW till 2030, providing a huge opportunity for capacity expansion.
What is your outlook for coal-based generation in India and its role going forward?
As the country is expected to grow rapidly during the “Amrit Kaal”, NTPC’s priority, as a state-owned enterprise, is to support the pace of economic development by providing accessible, affordable and reliable power to consumers. Power demand registered a growth of 7 per cent in FY2024 due to economic recovery and an abnormally hot summer. Under these testing circumstances, NTPC has not only catered to this surge in demand, but did so efficiently. This is reflected in its generation reaching 422 BUs for the first time, with the average plant load factor of NTPC coal stations reaching 77.25 per cent.
In terms of market share, NTPC supplied more than 24 per cent of the country’s power demand while having around 17 per cent of the installed capacity, maintaining its leadership position in power generation. This has been made possible with a diversified portfolio and an integrated supply chain, spanning coal mining to power trading.
In my view, coal-based power generation continues to play a crucial role in meeting India’s growing energy demands, especially as the country targets high levels of economic growth. While coal will remain a major energy source for the foreseeable future, its role is evolving to support the integration of renewables into the grid. Coal plants will need to operate flexibly, managing variable loads to balance the grid as the penetration of renewables increases. However, this shift to more flexible operation could lead to higher generation costs and reduced efficiency. NTPC is working on enhancing the efficiency of its coal plants by adopting advanced technologies while ensuring energy reliability.
What is your outlook for gas-based generation?
The limited availability and high cost of natural gas have resulted in low utilisation of gas-based assets in the country. However, higher-than-expected peak demand during the current fiscal year has led to higher PLFs.
Gas assets will play a vital role in providing peaking and flexible generation to accommodate the growing renewable capacities. Natural gas is also seen as a transition fuel in the power sector’s decarbonisation journey. In my view, gas-based generation will remain critical for at least the next three years, until sufficient storage capacity is integrated into the grid.
What are the key challenges in meeting renewable energy targets? How can these challenges be addressed?
Accelerating renewable capacity depends on four inputs — the cost of capital, the capital cost of equipment, availability of land, and availability of connectivity and storage capacity to support renewable integration. The Government of India is taking various initiatives to address these issues through policy interventions.
In my view, there will be no issues in meeting the stated targets, and I am confident that we will achieve them well ahead of the committed timelines.
What are the green hydrogen initiatives taken by NTPC?
NTPC has embarked on several green hydrogen initiatives that demonstrate its commitment to advancing clean energy. One of the key experiences is the successful commissioning of India’s first green hydrogen blending facility in the piped natural gas network at Kawas, Gujarat. This facility, which began operations in January 2023, has achieved 8 per cent volume-by-volume blending of green hydrogen, marking a significant milestone in hydrogen integration in the country.
In addition, NTPC is executing a green hydrogen mobility project in Leh. This project includes five fuel cell electric vehicles for intra-city travel along with dedicated green hydrogen generation and filling stations. A successful trial run of one bus has already been conducted.
NTPC is also developing a hydrogen mobility project in Greater Noida and plans to create a large green hydrogen hub at Pudimadaka in Andhra Pradesh. Further, we have developed a high-temperature steam electrolyser, and generated green hydrogen from biomass and sewage water at our R&D centre, NETRA. We are also on the verge of commissioning a green methanol plant at Vindhyachal.
All these initiatives align with our goals of integrating sustainable practices into our operations and contributing to a circular economy.
What are NTPC’s key priority areas in the short and long term?
Our priorities reflect NTPC’s commitment to balancing energy demand with environmental concerns while ensuring sustainable growth and community development. In the short term, NTPC’s key priority areas include expanding its renewable energy portfolio, securing fuel supply and enhancing operational efficiency. It focuses on rapidly increasing solar, wind and hybrid power capacities, along with investments in energy storage systems to ensure grid stability.
NTPC is also working to improve the efficiency of its coal plants and integrate advanced technologies to reduce emissions. NTPC already sources 13 per cent of its total coal consumption from its captive mines and plans to increase this proportion to 25 per cent by FY2030.
In the long term, NTPC aims to diversify into nuclear, small module reactors, green hydrogen, green chemicals and storage solutions, and become a leader in clean energy transitions.
Additionally, the company plans to explore opportunities in international markets while adhering to its mission of providing reliable power and related solutions in an economical and environment-friendly manner with a continued focus on efficiency.