India’s largest power generation company, NTPC LTD that meets nearly a quarter of the country’s power needs, said on Tuesday that it is spending Rs 1,60,000 Crore to implement a series of projects with an aggregate capacity of around 24,000 MW at 23 locations across the nation.
The installed capacity of NTPC Group today stands at 47,228 MW, which includes 800 MW of hydro, and 360 MW of solar generation capacity.
During FY16, NTPC’s capex stood at an all time high of Rs 25,960 crore exceeding the MoU target of Rs 23,000 crore. The NTPC Group’s CAPEX for FY16 stood at Rs 32,091 crore.
Out of the projects under implementation, NTPC expects to commission about 4,500 mw by the end of this fiscal itself thereby making it a 50,000 MW plus company. Of the total capacity under implementation, 1329 MW is based on diversified sources of renewable energy. The capacity under implementation also includes 4,050 MW being undertaken by joint venture and subsidiary companies.
The Company is also quickly moving towards its ambition of achieving a solar portfolio of 10 GW, out of the 100 GW target of the government by 2022.
Addressing the company’s shareholders at the 40th AGM, chairman and managing director of NTPC, Gurdeep Singh said the company is also considering inorganic growth as an advantageous strategy. Towards this, NTPC has also formed Patratu Vidyut Utpadan Nigam Limited, a Joint Venture Company with Government of Jharkhand, to maintain and operate the existing units and setting up new thermal power units of 4,000 MW capacity – in two phases. NTPC holds 74% stake in the JV.
This apart, NTPC has also entered into Joint venture with Coal India Limited to revive Gorakhpur and Sindri plants of Fertilizer Corporation of India and a Company named “Hindustan Urvarak & Rasayan Ltd” has been formed.
As a part of its global operations, Bangladesh-India Friendship Power Company Limited (BIFPCL), a 50:50 JV of NTPC with Bangladesh Power Development Board, is building a 2X660 MW Maitree Super Thermal Power Project. BIFPCL has awarded an EPC contract to BHEL for setting up the units.
Optimistic Growth Outlook
NTPC Chairman told shareholders that the basic national megatrends indicate a promising future for the company despite the overall atmosphere of uncertainty in the global business scenario.
India is the fastest growing major economy in the world with a huge potential appetite for power consumption.
“Shareholders may appreciate that on 9thSeptember 2016, the actual energy demand met in the country was an all-time highest at 3,539 MU and your Company (along with group entities) contributed 866 MU. Thus, green shoots are visible as far as upswing in power demand goes and this is in line with our long held expectations of growth,” he said.
Singh said NTPC’s long term strategy is aligned to the country’s growth plans emanating out of the commitment to provide 24X7 uninterrupted quality power to all at competitive rates. Including the addition of 325 MW by its JV at Patratu, NTPC has commissioned 10,125 MW in the Twelfth Five Year Plan so far, and aims to commission around 4,500 MW more during FY17.
Despite being a market leader in power generation in the country, Singh said NTPC is ready with the strategies and action plans to leverage its strengths for greater contribution to the power sector and the economy.
Sharing the major highlights of NTPC’s performance during FY16, Singh said the generation of 263.42 BUs of electricity by NTPC Group, which was around 24% of the total power generation in India from nearly 15% of the national generation capacity, underscoring high productivity.
Then operation of NTPC’s coal based stations stood at an average Plant Load Factor (PLF) of 78.61% against all India PLF of 62.29% and an average Availability Factor of 88.06% on bus bar during the year.
Three of NTPC stations were ranked the topmost stations of the country, recording more than 90% PLF, and 11 stations (including those under JVs) among the top 25 stations.
On NTPC’s coal operations, the company has commenced mining operations from the western quarry in Pakri Barwadih from May 2016. With about 7 billion metric tonnes of geological reserves estimated at its ten coal blocks, the Company expects to produce about 107 million metric tonnes of coal per annum.
Coal sampling and determining the grade of coal being the important steps having impact on the quality and price of coal as also on the cost of generation, MoUs for third party sampling and analysis of coal have been signed which will further drive down the cost of generation.
Such analyses have been started and are to be carried out pan-NTPC at loading and unloading ends by Central Institute for Mining and Fuel Research (CIMFR), a laboratory of Council of Scientific & Industrial Research (CSIR). This would help in transparently assessing the quality of coal and enable resolution of differences with coal companies.
Cheaper Power to Customers
With initiatives of Ministry of Power and Ministry of Coal, rationalization of coal linkages has been brought about for optimization of transportation cost and de-congestion of railway network.
Singh said that NTPC has moved forward on coal freight rationalization thereby reducing coal transportation costs. With improved domestic coal supplies, the Company has been able to minimize import of coal. With these steps, NTPC has been able to reduce the tariff by 14 paise (~4.3%) in Q1 FY17 as compared to Q1 FY16.
Strong investor confidence
NTPC has the highest credit rating from domestic agencies, reflecting its leadership position in the country’s power sector and strong financial profile. Its international ratings are at par with sovereign ratings.
The high investor support and confidence is seen in the success of the Company’s Green Masala Bonds, the first from an Indian Corporate. Considering the great interest displayed by investors, the Company upsized the bond issue, from an initial target of ₹1000 crore to ₹2000 crore. It was priced at an attractive yield of 7.48% with 5 year tenure. These are ‘green’ bonds with third party assurance, and Climate Bonds Initiative certification – to be used for financing the renewable energy projects of the Company.
NTPC also raised tax free bonds of ₹1000 crore, which received an overwhelming response. With a proactive and prudent approach to fund raising backed by a stellar record of delivering projects on time, NTPC has been able to reduce its average cost of borrowings to 7.67% as compared to 8.07% in the previous year.
The Company also placed bonds of Rs. 3542.50 crore in current fiscal in the domestic market at very competitive coupon rate ranging from 7.47% to 8.10% for maturities upto 15 years.