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NTPC, a government-owned ‘Maharatna’ company, is aiming to become an amalgamated power entity with interests across the supply chain — from coal mining to power transmission and distribution (T&D).
It expects to get access to 70 million tonnes of coal annually from the ongoing reallocation of captive mines. This will entail an expense of around Rs 50,000 crore over 30 years.
“Our coal requirement will increase at a galloping rate after 2018, when the power projects sourcing coal from these captive mines start operating,” NTPC’s director (finance), K Biswal, told reporters.
Of the 107 applications or technical bids received for 43 coal blocks put under the ‘allotment criteria’, NTPC has placed eight, for the richest ones. The allotment is being done by the coal ministry. NTPC had lost all but one of the mines allocated to it in the past two decades after a Supreme Court judgment cancelled these allocations last year.
By 2017-18, the company’s total coal requirement will jump to 220 million tonnes, of which around 30 mt will have to be met through imports. “We will make sure our total imports do not go beyond 10 per cent of our requirement,” said Biswal.
The company is looking to borrow Rs 15,000 crore in 2015-16, including the Rs 10,000 crore required for bonus debentures. The firm’s capital expenditure for 2015-16 is Rs 23,000 crore; it will rise to Rs 25,000 the next year. NTPC will also look at raising Rs 4,500 crore through external commercial borrowings.
With strong financials, the firm is looking to venture into the allied T&D business in the coming financial year.
“We are in a strong position to enter related businesses. We are already venturing into coal mining. The next step is forward integration by starting our own T&D business,” said Biswal.
NTPC controls 20 per cent of India’s total installed thermal power capacity. Around 25 per cent of the power it generates is wasted as aggregate transmission & commercial losses.
The company says its plans are likely to reduce the cost of power transmission and make use of existing infrastructure in coal-rich but power-deficit areas. “We have the capital and efficiency to take care of the integrated chain. The massive capacity addition that NTPC is planning needs strong plans to support it,” said a senior executive of the company.
The company has expertise in T&D at its off-sites and the residential colonies around its power plants.
Inferior quality of coal hits its operations and expenditure, with around 30 per cent of total coal received being discarded. With captive mines catering to its demand, the company is hoping to decrease its dependence on Coal India, said senior executives. “This will also help us blend imported coal with that from our captive mines, further reducing the cost and improving efficiency,” said Biswal.
In a nutshell
- NTPC expecting 70 million tonne worth of coal mines from ongoing re-allocation
- Focus on forward integration: to venture into power transmission and distribution
- This would make NTPC an amalgamated power company handling whole supply chain
- To build 20,000 mw solar power plants in coming 5 years
- Looking to acquire operational power plants
