Lockdown will bring more focus on hydropower, fuel our expansion: NHPC CMD

NHPC has five hydropower projects with an installed capacity of 4924 MW under construction

Power demand has seen a record fall during the ongoing lockdown, owing to closure of industrial activity. This led to more than 50,000 Mw of coal-based capacity shutting shop. Share of hydropower in total energy generation increased to 12.43 per cent in April, from 10 per cent last year. Perfect for balancing grid stability and meeting peak demand due to its flexible nature, hydro power is at the helm during the current fluctuating demand scenario. A K Singh, Chairman and Managing Director, NHPC Limited tells Shreya Jai in an interview that this will bring renewed focus on hydropower which will fuel NHPC’s expansion plans. Edited excerpts:

Q: During the ongoing lockdown, while electricity consumption has gone down but share of hydropower has increased. How is NHPC managing the change in demand pattern and peak demand curves?

A: Out of our 72 units, 66 are available for power generation and depending on the inflow in the river units are available for power generation at full capacity. Our five hydro power stations aggregating to a total capacity of 1548.2 MW are purely ‘Run-of the-River’ (RoR). Loktak plant (105 MW) has a reservoir while the remaining capacity of 3798 MW are from RoR schemes with pondage.  These units with pondage/ reservoir are being utilised for providing diurnal peaking demand.

Q: How are NHPC units functioning to ensure steady supply?
 

A: My immediate priority after the lockdown was announced was to ensure that the operations of power stations continue smoothly. The first step was ensuring that our premises remain sanitised and all precautions are in place for keeping our employees safe. We immediately identified the key minimum manpower necessary for operations at the power houses and the rest of the manpower was assigned work from home. Our medical team at work site/power stations ensured proper screening of all manpower.  I am proud of the fact that my employees didn’t let me down and ensured operation of all the 24 power stations.  

Q: Are NHPC’s units relying on automation and remote monitoring in the current situation?
 

A: We have deployed sufficient numbers of manpower at all power stations of NHPC. Just before the Covid-19 lockdown we had successfully remote operated one of our power stations. Next we are trying for remote operations of our two projects in Ladakh region. However, going forward, automation and remote operation will be a key part of our planning. For the older power stations there may be technological issues but for the new power stations certainly we shall keep an eye on remote operations.

Q: Hydropower was the backbone of maintaining grid stability during the 'Lights Off' event on April 5. What is your takeaway from this event?
 

A: Management of the grid is a challenging and critical task, rarely appreciated by common electricity consumers. I have always stressed in my interactions with policy makers that hydropower is an extremely important component of the energy basket of the country and ignoring it will be at our own peril. The 9PM-9Min event of April 5, 2020 showcased the technical superiority of hydropower in managing the grid in critical times. Now with the increased integration of wind and solar, it is imperative that corresponding capacity addition is carried out in the hydro sector. Hereafter, I foresee increased focus on hydropower.

Q: NHPC's capital expenditure was expected to cross Rs 5,000 crore in the last fiscal. Can you update on that? Additionally, what is the capex plan for the current financial year?
 

A: Our capex last year was around Rs 4,155 crore, including equity investment in joint ventures, which is around 9 per cent more than our MOU target of 3,806 crore. Our capex plan for the current financial year is Rs 5,253 crore, including the equity investment of Rs 603 crore in the subsidiaries.

Q: NHPC acquired two stranded private hydro power projects via the insolvency court route. Are you eyeing more capacity?
 

A: I see any stranded hydro project as a loss to the nation not only in terms of generating capacity but also as a strategic asset. We must harness the full hydro potential available in the country. We have already acquired Lanco Teesta Hydro Power Limited (Teesta-VI) and JAL Power’s Rangit-IV projects through NCLT route. We are open for acquisition of more projects where we find synergies with our existing portfolio.

Q: What is the company's plan for solar and wind power projects? Also, is the company exploring hybrid power projects of hydro plus solar?
 

A: We are already operating one wind and one solar power station. Solar shall contribute a considerable part of our capacity in the next couple of years. We also successfully concluded the tender of 2,000 MW solar capacity. We are exploring ‘Hydro-Solar’ hybrid projects in Ladakh region. Hybrid power projects through floating photovoltaic (FPVs) in combination with hydropower is also an area where we are interested. Recently there was discussion in the ministry about development of the Pump-Storage scheme in the country and we are also exploring the possibility to venture in this field after due diligence technical and financial studies.

Q: Finance ministry recently announced, central generating stations would give a discount on the tariff at which state-owned power distribution companies procure power from them. What is the quantum of discount NHPC will offer under this scheme and how will it impact the company's earnings?
 

A: In hydropower’s case there are no variable charges as fuel cost is zero. For hydro power stations the tariff consists of capacity charges and energy charges and the fixed cost component is part of both. Thus, for hydro power the entire tariff virtually consists of fixed cost. We are waiting for final details of applicability of discounts to energy charges etc. in case of hydropower. It would be prudent to wait for the final details before assessing the financial impact. This is a difficult time for the nation and we would do our part in alleviating the pain of our fellow countrymen.

Q: What additional capacity is under construction?
 

A: Presently construction works are going on in five hydro power projects with a total installed capacity of 4924 MW (2000 MW SLP, 800 MW Parbati-II, 500 MW Teesta-VI, 1000 MW Pakal Dul and 624 MW Kiru H E Project). Besides this 11 Hydro Projects with installed capacity of 7790 MW (520 MW Teesta-IV, 600 MW Tawang-I, 800 MW Tawang-II, 2880 MW Dibang, 195 MW Kotli Bhel-IA, 540 MW Kwar, 850 MW Ratle, 770 MW Chamkharchhu, 66 MW Loktak D/s, 120 MW Rangit-IV and 449 MW Dugar Project) are under various stages of clearance.