Even as NTPC does not meet the criteria, the Maharatna Central Public Sector Enterprise is financially sound with respect to liquidity for carrying out electricity trade, it added.
The Central Electricity Regulatory Commission (CERC) has granted NTPC the licence for inter-state trading in electricity, even though the power generation behemoth fell short of having the necessary requirements. CERC said that it “relaxed the current ratio and liquidity ratio requirement in public interest in view of the policy of the government of India for promoting renewable energy”.
The net worth of NTPC is Rs 93,415 crore with a current ratio of 0.88 and a liquidity ratio of 0.74— falling short of the regulatory requirements of maintaining minimum current ratio and liquidity ratio of 1:1 for getting a trading licence. Trading licence requires a net worth of Rs 50 crore.
The ministry of new and renewable energy has identified NTPC as the nodal agency for 20,000 MW solar and wind power plants through it. The company would buy power from renewable power generators and sell the same to one or more distribution companies, which requires a trading licence.
NTPC has already selected developers for 1,150 MW of wind and 2,000 MW solar power projects through competitive bidding, where tariffs of Rs 2.67/unit for solar and Rs 2.87/unit for wind (including trading margin of Rs 0.07/unit) had been discovered. Various discoms have already agreed to buy 7,150 MW power from this scheme. NTPC claims that since it is the intermediary agency, renewable developers quoted such low tariffs as they were sure of getting payments on time.
Even as NTPC does not meet the criteria, the Maharatna Central Public Sector Enterprise is financially sound with respect to liquidity for carrying out electricity trade, it added. NTPC reported a net profit of Rs 11,750 crore in FY19 on a standalone basis, registering a year-on-year increase of 13.6% and its revenue grew 8.2% to Rs 92,180 crore.
NTPC’s earlier petition for trading licence was rejected by CERC in 2016, when the regulator suggested NTPC to use the existing trading licence of its subsidiary — NTPC Vidyut Vypar Nigam (NVVN). However, NTPC said that it would cause adverse financial implications as NVVN would have to pay GST on transaction between NTPC and NVVN.