The country?s largest power producer, NTPC, is hopeful that the power sector will get special attention under the new government that has indicated its commitment to infra- structure development. With a task to scale up its generation capacity to 1,28,000 MW by 2032, NTPC is betting on rapid capacity expansion, partly through acquisition of private sector projects. It is also looking to accelerate its captive coal mining plan that has got stuck for want of state government support. In an interview with FE?s Subhash Narayan, NTPC chairman and managing director Arup Roy Choudhury dwells upon the company?s growth strategy in a difficult market environment. Excerpts:
The country has seen a change of government at the Centre. The new government brings with it fresh ideas and a new style of functioning. What are your expectations?
The new government has started well by having one minister to look at both coal and power sectors. I welcome this change. The two complement and supplement each other for the growth of the energy sector. I feel that to make the arrangement more effective, the government should do a second-level merger, at the official level. There could be one energy secretary?maybe a technocrat?and two additional secretaries heading the departments of coal and power each. This could go a long way in ensuring minimum government and maximum governance.
NTPC is dealing with a vexed payment issue with the BSES discoms in Delhi. Though the issue has been resolved for now, what could be a lasting solution to this recurring problem?
Let me first clarify that the issue is not a dispute between NTPC and BSES, as it is made out to look like. We are only fighting for our legitimate payment. We are supplying power (to the discoms) and need to be paid for it; in the same way we pay Coal India for getting fuel. If we stop paying to Coal India, the whole cycle will stop. What I feel is that BSES discoms should not only clear all the dues but they should also do it on time, and regularly, so that every time the matter does not go to the apex court. We will also appraise the new power minister of the issue for guidance.
NTPC?s plan to develop its captive mines does not seem to be moving according to the plan. Do you foresee more problems in operationalising these mines? Does it impact your capacity addition programme?
I feel that the change of government at the Centre will also bring about a change of perception about our projects in several states. I expect that we will get some support from Jharkhand now to get going on our captive mines. We have already lost three million tonnes of coal production so far from the Parkri Barwadih mines. Once the law and order issues are resolved at this mine, production can start immediately. We are also making progress in our other mines. But, even if we fail to get our mines operational according to our earlier targets, the company would not suffer. Domestic coal would have offset our imports, but as we are fully compensated for the fuel cost, the company would not suffer even if we have to rely on imported fuel. Besides, consumers are not suffering, as they are not consuming at the desired levels.
If consumers are not consuming enough power why has NTPC lined up grand acquisition plans for power projects?
We should understand that per capita consumption of power in India is just 900 units. This will only grow going forward, thus, creating massive demand. We should not wait for the demand to shoot up before accelerating the pace of the capacity addition programme. That would delay things by another four-to-five years. It is good to start early. Besides, we also have to have about 1,28,000 MW of capacity by 2031. Not all of this can be our brownfield or greenfield projects. Some of this has to come from acquisitions. And for NTPC, acquisition in a low-demand market does not mean losses as the current regulations provide for us a fixed cost, even if tied buyers are not buying power.
So do we see some acquisitions in the current financial year?
We are optimistic, and hope that there is something by March. We have kept about R10,000 crore for acquisitions. An evaluation committee has been set up to scan the bids, which will then be passed on to the sub-committee of the board before it is put up for approval. The broad idea would be to acquire a project that makes economic sense, is running and comes to us cheap.
What does NTPC think about the plan to export power to neighbouring countries?
We are already giving 250 MW to Bangladesh. But one should understand that our transmission network (inadequate capacity) is not geared to support export of power. Besides, we should not supply power to neighbours at regulated tariff. We want that rather than export of power, Indian companies should be encouraged to set up projects in neighbouring countries. That is what we are doing in Bangladesh and Sri Lanka. As for export, we are willing to supply power from the 2000 MW Ratnagiri Project to Pakistan.