NTPC to revisit its core business plan

NTPC Ltd, India’s largest power generating company, is revisiting its business plan drafted till 2032 to keep in line with the government’s latest initiatives. According to the company’s senior executives, renewable energy and adherence to new environment norms will change NTPC’s capex plans.

“We have envisaged 128 Gw (gigawatt) of power generation by 2032. With the increasing push to renewable energy, we plan to generate 11 per cent of our total capacity from renewable energy sources. Most of it would be solar power,” said Gurdeep Singh, chairman and managing director, NTPC.

Singh added that the company had earmarked capex for meeting the norms set under the new emission and water usage norms. “The cost of power production would increase by Rs 50 lakh per Mw (megawatt). This roughly translates into a 50-60 paise increase in the final customer tariff.” The current cost of power production is Rs 5 crore per Mw. NTPC registered an annual profit of Rs 10,243 crore during FY16 and the total income for the year stood at Rs 71,696 crore, which is 4.8 per cent lower than the income in FY15. It also witnessed a decline in its plant load factor (PLF, the utilisation ratio of power generation unit) to 78.6 per cent, which is lower than its PLF of 80.2 last year.

Company executives said NTPC plants had to back down 12.9 per cent of its generation capacity in FY16 owing to low demand, compared with 8.9 per cent earlier.

However, the loss in demand was offset by reduction in coal prices. The company’s energy cost came down to Rs 1.69 a unit in February 2016 from Rs 2.03 a unit a year ago. The decrease in price was due to rationalisation of linkages and reduction in imported coal consumption. NTPC has planned a capex of Rs 30,000 crore for FY17. “We would raise Rs 6,000-7,000 crore from international bond markets; the balance would come from domestic sources. As for buyback, NTPC does not have cash reserves for that,” said K Biswal, director (finance), NTPC. The company’s cash reserves stood at Rs 4,000 crore for the year ended March 2016.

POWER PLANS
  • Share of renewable energy to increase to 11 per cent

     
  • Retrofit of old plants on cards; capex of Rs 20,000 crore approximately

     
  • Cash reserves at Rs 4,000 crore; company denies any buyback

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