India?s largest power generator NTPC is aggressively pursuing a plan to raise its installed power generation capacity to 75,000 gigawatt (gw) by 2017 from the current 31 gw, even as it seeks to ensure fuel security for its envisaged capacity through backward integration into captive coal mining and oil & gas exploration. Besides, it is also diversifying into non-conventional power generation areas like nuclear, hydro and renewable sources. NTPC has strong presence in power distribution and trading as well. It has also set up a joint venture with Bhel to manufacture power equipment. NTPC chairman RS Sharma spoke to Noor Mohammad on various issues critical to the company?s future growth. Excerpts:
NTPC has floated tender for bulk ordering of supercritical units. The bids were opened recently. What is the bidders? response?
We have received five bids in the turbine-generator category while two for boiler supply. Bidders? response is quite good. However, we expected more competition in the boiler category.
When do you expect to finalise the contract for bulk ordering?
Evaluation of techno-commercial bids will be completed in two months? time. After that, we will invite price bids. We expect to award the contract by July-August this year.
How would bulk ordering of 660-mw capacity supercritical equipment help NTPC? You have stipulated equipment manufacturing in India as a key condition for participating in the bidding. Can you explain what exactly the conditionality is?
We expect to bring down our equipment cost. It should not be difficult, given that many players are participating in the bidding race. Besides, order is to be placed for bulk supply and not just for one project.
Because of the tender conditionality, many joint venture players are setting up manufacturing facilities in India. That would go a long way to address problems relating to supply management for projects in the country. The credit for this should go to NTPC.
Under the ?phased manufacturing plan? condition in the tender document, we have set milestones on land acquisition and investment approval for the development of manufact- uring facility in India that contractors must comply with.
You have floated tender for bulk supply of 660-mw supercritical units. How do you plan to procure 800-mw units?
We also plan to procure 800-mw supercritical units through the bulk ordering route. We expect to issue the tender in three months? time for the supply of seven units.
Chinese contractors are implementing many private and state power projects in India, but they seldom bid for NTPC?s projects. Why?
Anyone can participate in bidding for supply to NTPC?s projects provided they meet our qualification requirements. Our plants need to run at 94-95% plant load factor (PLF) level.
You have targeted to add more than 17,000 mw power generation capacity under the 11th Plan. How much of this do you expect to achieve?
We are trying to complete all projects, except Barh-I and Lohari Nagpala that are facing delays. All critical requirements, including fuel linkage for these projects, are in place.
How much capacity addition have you envisaged under the 12th Plan?
We have envisaged 34,000 mw capacity for placing order. Of this, 28,000 mw is targeted for completion during the 12th Plan, while the rest can be commissioned under the 13th Plan.
Your capacity addition target for the 12th Plan looks ambitious, given that NTPC has added only 31,000 mw capacity since its inception in 1982. Your comments?
We are indeed very optimistic about meeting our 12th Plan capacity addition target. We have reasons for this. For one, many private players are setting up equipment manufacturing capacity that is expected to improve significantly the supply management for power projects in the country. These private players are also expected to expand their manufacturing capacity. Besides, public sector equipment supplier Bhel is also expanding its manufacturing facility to 20,000 mw a year. So, as per current projections, we should have a manufacturing capacity of 40-50 gw a year in the country for the next Plan.
Second, we expect to finalise contracts for all 12th Plan projects in one-and-a-half years? time, that is, well before the Plan begins.
Third, NTPC is setting up an online facility for round-the-clock monitoring of power projects. This is expected to become operational soon.
NTPC has got into captive coal mining in a big way. Would it help the company bring down its fuel cost?
By 2017, we expect to meet about 20% of our coal requirement from captive sources. This would help us in ensuring fuel security for our power projects. Besides, this would also help lower costs and improve the quality of coal supply.
NTPC has entered the exploration & production (E&P) business. What synergy will it bring to your main business of power generation?
We have participating interests in five exploration blocks. While oil production from these blocks can be sold, gas supply will be used for meeting the fuel requirement of our power projects. So, this would help us to ensure fuel security for our gas-based power projects.
Domestic coal production is unable to keep with the country?s fast-growing demand. NTPC, too, is importing coal on a regular basis to meet domestic fuel shortages for its power plants. But it has not entered into any long-term contract for importing coal…
We meet about 8-10% of our coal requirement through imports. While coal imports are currently being made under annual contracts, we are also working on a long-term contract model for importing coal for our power projects.
NTPC has set up a joint venture with Bhel for manufacturing equipment. Will you source equipment for your power projects from the JV?
NTPC has an arm?s length relationship with the JV. So, it will be required to compete with other suppliers for NTPC?s orders. Initially, some orders can be placed on the JV. But, in the long term, it has to sustain in the market.
Post-January 2011, NTPC would have to compete for power projects. How prepared is the company?
We are ready for that.
The commissioning schedule for some of your power projects was drawn up keeping in mind the timing of the Commonwealth Games in Delhi. Are these projects on time?
We are setting up power projects at Dadri in UP and Jhajjar in Haryana to meet additional electricity requirement of the national capital during the Commonwealth Games. While the first 490-mw unit of the Dadri project has been commissioned, the second one will be completed in July. About 90% power from the plant will be supplied to Delhi. Meanwhile, we also expect to commission by August half of the envisaged capacity of the Jhajjar project, which is being developed as a joint venture with the Haryana government. Additional 1,150 mw power will be available to Delhi from these two projects.
NTPC is already supplying 2,361 mw power to the national capital, which will reach 3,511 mw after these two units are commissioned.
