Need to step up power capacity addition to improve HDI: NTPC

India needs to accelerate its power generation capacity addition to improve its Human Development Index (HDI) ranking, NTPC CMD A K Jha said.
"India's per capita consumption and emission are one of the lowest globally, however to evolve on Human Development Index(HDI), which is dismal at 135 , the country needs to accelerate power capacity addition", said Jha.
He expressed the views in a panel discussion on "Climate Change and Generation of Thermal Power- improvements in Conventional Systems" at COP- 21, Paris.
Jha stated that the share of India in CO2 space is mere 2.8 per cent but still it has to embark upon largest renewable energy (RE)program to reach 175 GW RE capacity by 2022.

However, since clean energy is not available 24x7, India has to look for adequate balancing power from coal as it does not have enough gas and oil resources, he added.
Stressing that coal is not an option but compulsion for India, Jha spoke about research being carried on Advanced Ultra Super Critical technology by different countries to enhance efficiency of coal plants. However, there is an urgent need to cooperate and share the developments regarding this.

On this occasion, Power Ministry Joint Secretary Anil Kumar Singh said that despite renewable addition, India will need to use coal to generate balancing power so as to provide affordable 24x7 power to the people.

(REOPENS DCM50)
The placement of rupee-denominated offshore bonds for funding renewable projects, or "green masala" bonds, by NTPC on August 3, will pave the way for developing the offshore rupee bond market (or "masala" bonds) for companies, according to S&P Global Ratings.
The India-based power generator's issuance is the first public placement of masala bonds by a corporate, after Adani Transmission Ltd raised Rs 5 billion in masala bonds from Credit Suisse AG in a private transaction.
NTPC is considered a benchmark credit by some investors for pricing other corporate bonds from India.
"We believe falling bond yields globally are a crucial factor in achieving convergence on pricing of masala bonds -- something that has been elusive in the past," said S&P Global Ratings credit analyst Abhishek Dangra.

Investors facing falling yields (the sovereign yield on India has declined by about 80 basis points [bps] over the past 12 months) are now more forthcoming to invest at rates seen as low in the past.
Issuers on the other hand are able to borrow at competitive costs via these bonds, compared with funding from banks and domestic capital markets, due to fall in yields. For instance, NTPC's INR 20 billion green masala bond yields about 7.48% for a five-year tenor, about 10 bps lower than the comparable domestic borrowing rate.
However, a 5 per cent withholding tax applicable on offshore rupee bonds may more than offset this benefit.

"In our opinion, masala bonds will help diversify the funding base for companies and attract a selective investor base that is comfortable with rupee exposure because the high hedging cost will negate any pricing premium over dollar bonds," said Dangra.
"Nevertheless, factors affecting price convergence will continue to play an important role in the success of the masala bonds market.