NTPC is sitting pretty but this has not stopped it from eyeing more business in terms of operation and maintenance (O&M) contracts of thermal plants. “We are very aggressive as far as capacity addition is concerned. Around 18,000 MW is under construction and 14,000-15,000 MW will be awarded in the next nine to 10 months," said RS Sharma, Chairman and Managing Director. He spoke about the roadmap ahead and the likely diversification of operations. Excerpts from the interview:
Are you looking at operations and maintenance as a new vertical, going by recent talks with Bangladesh where NTPC seems open to taking up O&M contracts of its thermal units?
It is an exciting opportunity and an excellent vertical. We have asked Bangladesh to give us some of their existing and proposed plants for O&M as it is one of our core strengths. On the domestic front too we have given proposals to some plants that are not operating well. This is part of our overall strategy. Apart from fuel sourcing, our global presence should also be in O&M and we are focussing on that.
Will you confine yourself to a 2,000-MW project with the Nuclear Power Corporation of India or expand the scope of the MoU?
The first plant will be in a joint venture. If the Government allows us to go ahead at a later date, we will be keen to go on our own. So far, the strategy has been to acquire the expertise. NPCIL has identified six-seven sites and one will be given to the joint venture company (to be incorporated after the Atomic Energy Commission clears the MoU).
What are NTPC’s capacity addition plans?
We are very aggressive as far as capacity addition is concerned. Around 18,000 MW is under construction and 14,000-15,000 MW will be awarded in the next 9-10 months. This year, the capacity addition will be 2000 MW. About 4,000 MW will be added next year and another 4,000 MW in 2011-12. Most of the capacity had been ordered out in 2007-08 as it takes 36-42 months. There are plans for adding 45,000 MW by 2017, of which about 13 per cent, or 10,000 to 11,000 MW, will be renewable. We have identified sites for renewable energy in Karnataka, Gujarat and Rajasthan. The major chunk of solar power addition of 300 MW will come from our existing thermal plants where surplus land is available. Wind power will be about 700 MW.
Have you have placed orders for 2014-15?
It will be ordered in 2010-11 and tenders will be for about 14,000 MW.
What is the capex earmarked for capacity expansion?
It is Rs 1.22 lakh crore up to the Eleventh Plan. For the next year, it is Rs 17,000 crore and Rs 25,000 crore for the year after. The debt-equity ratio will be 70:30 where equity will come from internal accruals and the rest from banks, bonds and the like.
Is the Government proposal to clear 10 per cent merchant power sale by NTPC on?
It is very much on. We are installing 2,000 MW merchant capacity. Of the 18,000 MW under construction, merchant capacity will be 2,000 MW. We will shore this up in the future too. Of the gas capacity expansion we undertake, some of them shall go on merchant capacity.
What is your target for merchant capacity?
That will depend on the market. We are planning seven-eight per cent merchant capacity of 75,000 MW.
What do you have to say on reports of NTPC not furnishing an undertaking to Coal India for facilitating imports?
We are open as far as Coal India is concerned. I have had a discussion with its Chairman and the NTPC Board will decide on the issue. We want to work with Coal India and have two coal mines in a joint venture.
Are you looking at operations and maintenance as a new vertical, going by recent talks with Bangladesh where NTPC seems open to taking up O&M contracts of its thermal units?
It is an exciting opportunity and an excellent vertical. We have asked Bangladesh to give us some of their existing and proposed plants for O&M as it is one of our core strengths. On the domestic front too we have given proposals to some plants that are not operating well. This is part of our overall strategy. Apart from fuel sourcing, our global presence should also be in O&M and we are focussing on that.
Will you confine yourself to a 2,000-MW project with the Nuclear Power Corporation of India or expand the scope of the MoU?
The first plant will be in a joint venture. If the Government allows us to go ahead at a later date, we will be keen to go on our own. So far, the strategy has been to acquire the expertise. NPCIL has identified six-seven sites and one will be given to the joint venture company (to be incorporated after the Atomic Energy Commission clears the MoU).
What are NTPC’s capacity addition plans?
We are very aggressive as far as capacity addition is concerned. Around 18,000 MW is under construction and 14,000-15,000 MW will be awarded in the next 9-10 months. This year, the capacity addition will be 2000 MW. About 4,000 MW will be added next year and another 4,000 MW in 2011-12. Most of the capacity had been ordered out in 2007-08 as it takes 36-42 months. There are plans for adding 45,000 MW by 2017, of which about 13 per cent, or 10,000 to 11,000 MW, will be renewable. We have identified sites for renewable energy in Karnataka, Gujarat and Rajasthan. The major chunk of solar power addition of 300 MW will come from our existing thermal plants where surplus land is available. Wind power will be about 700 MW.
Have you have placed orders for 2014-15?
It will be ordered in 2010-11 and tenders will be for about 14,000 MW.
What is the capex earmarked for capacity expansion?
It is Rs 1.22 lakh crore up to the Eleventh Plan. For the next year, it is Rs 17,000 crore and Rs 25,000 crore for the year after. The debt-equity ratio will be 70:30 where equity will come from internal accruals and the rest from banks, bonds and the like.
Is the Government proposal to clear 10 per cent merchant power sale by NTPC on?
It is very much on. We are installing 2,000 MW merchant capacity. Of the 18,000 MW under construction, merchant capacity will be 2,000 MW. We will shore this up in the future too. Of the gas capacity expansion we undertake, some of them shall go on merchant capacity.
What is your target for merchant capacity?
That will depend on the market. We are planning seven-eight per cent merchant capacity of 75,000 MW.
What do you have to say on reports of NTPC not furnishing an undertaking to Coal India for facilitating imports?
We are open as far as Coal India is concerned. I have had a discussion with its Chairman and the NTPC Board will decide on the issue. We want to work with Coal India and have two coal mines in a joint venture.
Courtesy: Business Line
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