 "Deregulate power sector, let there be a market play: Dr Arup Roy Choudhury")
NTPC is aggressively adding capacity and is chasing 10,000 Mw through acquisition of stressed assets. NTPC Chairman and Managing Director Arup Roy Choudhury explains the company’s strategy in an interview with Sanjay Jog. Edited excerpts:
NTPC’s first-quarter profit has dipped. What affected the company’s performance?
Demand for coal-based power is poor because of regional imbalances and inadequate transmission. NTPC has about 25,000-Mw capacity at pit-head stations where the cost is Rs 1.80-2.50 per unit. Despite this, the plant load factor is 70-75 per cent because states are unable the pick up the power. The pit-head stations are mostly in Uttar Pradesh and Madhya Pradesh. As the states are unable to procure power, it is going waste.
NTPC has the cheapest power. The moment system demand increases, NTPC’s entire power gets sold. But till then, who will take the power and how it will be transmitted are issues.
Some states are buying costly power...
Political decisions in some states dictate they ‘’must’’ buy power even at Rs 4.50 per unit against NTPC’s cheaper electricity. Since power is a concurrent subject, there is a need to put our heads together and work out a solution.
The time is opportune to deregulate the power sector. Power is a product for sale. There is a buyer and a seller. What is the problem? NTPC can provide discounts to states that buy more power from it. There will be market play, which is not there now in a regulated power sector.
When will you produce coal from your mines?
Coal production from the first mine should start soon. Most of our coal blocks are in Jharkhand.
When do you plan to issue green bonds?
We are talking to people. The green bonds will be a global rupee bond worth $1 billion. The first tranche will be worth $500 million. We are yet to receive clarification from the income tax department on the withholding tax.
I recently met the member of the Central Board of Direct Taxes in this regard. After we receive the clarification, the bonds are on.
NTPC’s first-quarter profit has dipped. What affected the company’s performance?
Demand for coal-based power is poor because of regional imbalances and inadequate transmission. NTPC has about 25,000-Mw capacity at pit-head stations where the cost is Rs 1.80-2.50 per unit. Despite this, the plant load factor is 70-75 per cent because states are unable the pick up the power. The pit-head stations are mostly in Uttar Pradesh and Madhya Pradesh. As the states are unable to procure power, it is going waste.
NTPC has the cheapest power. The moment system demand increases, NTPC’s entire power gets sold. But till then, who will take the power and how it will be transmitted are issues.
Some states are buying costly power...
Political decisions in some states dictate they ‘’must’’ buy power even at Rs 4.50 per unit against NTPC’s cheaper electricity. Since power is a concurrent subject, there is a need to put our heads together and work out a solution.
The time is opportune to deregulate the power sector. Power is a product for sale. There is a buyer and a seller. What is the problem? NTPC can provide discounts to states that buy more power from it. There will be market play, which is not there now in a regulated power sector.
When will you produce coal from your mines?
Coal production from the first mine should start soon. Most of our coal blocks are in Jharkhand.
When do you plan to issue green bonds?
We are talking to people. The green bonds will be a global rupee bond worth $1 billion. The first tranche will be worth $500 million. We are yet to receive clarification from the income tax department on the withholding tax.
I recently met the member of the Central Board of Direct Taxes in this regard. After we receive the clarification, the bonds are on.
What is NTPC's strategy to acquire stressed assets?
Inorganic growth is good for both company as the investment gives quick returns. It is also good for the stranded capacity and also for the country in general. NTPC is already in as expression of interest has been issued and done some evaluation. Maharashtra has recently approached though NTPC is already in talks with MP, Rajasthan, DVC and Jharkhand. All these are inorganic.
NTPC will first handle this then will consider acquisition of stressed projects of private sector. NTPC has thought of 10,000 MW for inorganic growth. If it won't be done from the state sector, NTPC will then look at stressed projects of the private sector.