NHPC plans thermal foray, to start power trading

The National Hydroelectric Power Corporation (NHPC), India's second largest power generating firm, plans to foray in coal-fired projects and begin inter-state trading of electricity, as it plans to become a 10,000 Mw company by 2012 from about 3,750 Mw at present.

The public sector company has also revived plans to set up a 500 Mw project in Nepal and will take up two projects in Bhutan with a total capacity of 1,600 Mw as part of its overseas expansion.

"We are looking to set up a coal-based power plant in Madhya Pradesh and have approached the state government for a coal mine, but nothing has been decided as yet," NHPC Chairman and Managing Director S K Garg said reporters here.

Preliminary discussions had been initiated through the Narmada Hydroelectric Development Corporation, a joint venture of NHPC and Government of MP, that already had two hydel projects in the state, he said. He said as part of its diversification strategy, the company would also enter the power trading business. He, however, ruled out plans to start electricity distribution or gas-based generation plants.

NHPC's thermal plans follows the hydro foray by NTPC Ltd, formerly called the National Thermal Power Corp.

The state-run NTPC is the country's largest generating company with a total capacity of more than 25,000 Mw and has already started construction on various hydel projects in Himachal Pradesh and Uttaranchal.

Elaborating on NHPC's overseas projects, he said with political situation in Nepal stabilising, the company had revived plans to set up the 500-Mw Upper Karnali project.

NHPC had started negotiations on the project about three years ago, in a joint venture with the Nepal Electricity Authority, but talks came to a halt after King Gyanendra's coup last year followed by intense political turmoil and violence by Maoist guerrillas.

In Bhutan, where it had earlier built the 60-Mw Kuricchu project on a turnkey basis, the NHPC would establish the Mangdechu and Punatsangchhu projects with a combined capacity of 1,600 Mw, he added.

Garg said the company was adding about 2,480 Mw capacity in the 10th plan and would add about 6,300 Mw capacity in the 11th plan period (2007-12) to become a 10,000 Mw firm.

The PSU, currently, operates ten power projects with a total capacity of 3,755 Mw and is constructing another 13 projects across the country. These include the 2,000-Mw Lower Subansiri project in Arunachal Pradesh, the 800-Mw Parbati-II, 520-Mw Parbati-III, the 231-Mw Chamera-III in Himachal Pradesh and 510-Mw Teesta-V project in Sikkim.

The company would be investing about Rs 60,000 crore over the next 6-7 years, he said, adding of this about Rs 20,000 crore would come through budgetary allocation while the remaining would be raised through borrowings or internal accruals.