Our capital expenditure was impacted in the first few months of Covid-19, when the lockdown was in force. With the easing of curbs by the government, our capital works picked up momentum.
State-run NTPC saw its capex impacted during the first few months of the lockdown last year, but as the curbs were eased, its capital works picked up momentum. Its CMD Gurdeep Singh tells FE’s Anupam Chatterjee that the company has almost undone what was lost and is confident of achieving the capex target at the end of the current fiscal.Excerpts:
NTPC plans to have a production capacity of 1,30,000 MW by 2032, with 30% of this being from non-thermal sources. What makes you optimistic about the future of renewable energy in the country?
Renewable energy has acquired critical importance in the total energy space across the globe. The cost of solar power has been declining dramatically for years, and it has become the cheapest option available on a standalone basis. The government’s push for green energy, stringent environmental norms, availability of cheap finance options for renewable projects, coupled with growing energy demand in the country, will keep the renewable sector growing rapidly in the future.
Did Covid-19 hamper your capital expenditure plans for FY21? Could you reveal the size of your capex in the ongoing fiscal and the main areas you have spent on?
Our capital expenditure was impacted in the first few months of Covid-19, when the lockdown was in force. With the easing of curbs by the government, our capital works picked up momentum. They are in full swing now. So, while capex was low in the first quarter, we have almost undone what we lost, having achieved 70% of the capex target for FY21. I am confident we will achieve the target by the end of the fiscal. In what reflects on its resilience, NTPC added 1,799 MW of commercial capacity even during the Covid-19 period.
How do you plan to increase coal production from your captive mines? What else is the company considering to cut coal imports?
At present, we have three captive mines, namely Pakri Barwadih, Dulanga and Talaipalli, under operation. Production from these mines stood at 11.15 MT in the last fiscal, which was an increase of 52.5% over the previous year. Two more mines are being readied and we hope to start operating them soon. A separate mining subsidiary, NTPC Mining Limited (NML), has been incorporated to speed up mining activity. We are at an advanced stage of transferring the Pakri Barwadih mine to the NML. By 2030, we aim to meet 40% of our coal requirements from captive mines. As for imports, NTPC has not placed any new contracts in recent times, with its total coal requirements being met from domestic sources and captive mines.
NTPC has signed an MoU with Siemens for the production of green hydrogen from the company’s renewable energy plants and the use of the fuel in transportation. Could you share your plans on futuristic energy sources?
We are actively pursuing the green hydrogen portfolio which aligns well with NTPC’s large renewable growth plans. We are working with various agencies besides Siemens to take forward that agenda. We have launched a pilot project for the production of green methanol at one of our sites. We are also working on green hydrogen-based mobility and green ammonia. We hope that these initiatives will grant us a significant share of the hydrogen economy.
As part of capital restructuring, NTPC’s board had sometime back approved a share buyback of up to Rs 2,275 crore. Could you throw some light on the company‘s capital restructuring plans?
The buyback was undertaken under extant DIPAM guidelines and keeping the market situation in mind. Due to reduction in the equity base, it has helped improve the return on equity, thereby increasing shareholders’ value in the long term.