NTPC seeks to tie up with Coal India, BHEL

NTPC continues to reel under coal shortage, seeks to secure supplies with these tie ups

NTPC is keen to join hands with Coal India Ltd (CIL) and Bharat Heavy Electricals Ltd (BHEL) to augment its generation capacity and capability, which have been hit by coal shortage.

Minutes of a July meeting of an advisory group on integrated power development, headed by Suresh Prabhu, said, “NTPC’s performance was affected in recent years, and continues to be so, by the general situation of the coal shortage in the country. While this is true, it is also a fact that NTPC could develop the coal blocks allotted to it from 2004.”

In 2013-14, the thermal power producer’s dependency on imported coal increased to 10.39 million tonnes (mt) from 9.09 mt in 2012-13. For this financial year, the figure is expected to rise to 17 mt. The company’s fuel costs rose to Rs 12,765 crore in the June 2014 quarter, 35 per cent more than in the corresponding period last year, while revenue from operations rose 16 per cent during the same period.

In a note to investors, NTPC said the robust business models of private entities in the sector offered substantial competition.

Company officials said to improve efficiency in fuel optimisation and power generation, they were considering an active partnership with CIL and BHEL. “The research and development efforts, led by NTPC, might be integrated and network with BHEL, CIL and other organisations. A 10-year programme, aimed at breakthroughs in ultra critical technology, carbon emission reduction, inexpensive solar power systems, etc, should determine the agenda on this front,” NTPC said in the presentation to investors.

It added it was trying to scale up in the wake of a shift towards ultra-modern technology and efficient power generation. “Internal project management of NTPC needs to be strengthened to make a visible change in the outcome on its engagement in the redevelopment of coal mines. The road map on a development strategy, along with targets of production, could be an important element of NTPC’s memorandum of understanding with the power ministry,” the company said in its presentation to the advisory group.

Despite the fact that the private sector’s capacity is 1.3 times NTPC’s, its generation is lower than the public sector entity’s. Currently, NTPC has 22,414 Mw of projects under construction, while private entities account for 54,286 Mw. While NTPC generates 251 billion units of power, the cumulative power generation by private companies was 216 billion units.

NTPC is set to commission its first hydro project of 1,499 Mw by the end of this financial year.