NTPC To Move Ahead on Separate Renewable Energy Arm

Wire agency PTI reports that NTPC Limited has received a ‘go ahead’ from the Niti Aayog and Department of Investment and Public Asset Management (DIPAM) to set up a wholly-owned company for its renewable energy business. The move formalises NTPC’s plans in the renewable space.

For many observers, a massive shift by the largest power generator in the country, has been considered a key to the achievement of renewable energy targets and growth of the sector, as the public sector NTPC has the funds, expertise, and familiarity to negotiate the issues that have been a stumbling block for many private sector developers.

As the biggest thermal power generator, NTPC is also uniquely positioned to create space for renewable energy by taking an appropriate call on old thermal power plants, as they near their normal end of life cycle.

NTPC will incorporate the planned wholly-owned subsidiary under the provisions of the Companies Act, 2013. That will also mean a sharper focus on renewables, with its own CEO and targets now. In doing this, NTPC moves on a  path already taken by a key private sector player, Tata Power, which has also gone the subsidiary route for a whole hearted focus on renewable energy. Tata power has already declared its intention to stay away from fresh thermal power development.

The publicly listed NTPC currently has a  total installed power generation capacity of 62.9 GW, with 70 Power stations  at a group level comprising of 24 Coal, 7 combined cycle gas/liquid fuel plants, 1 hydro, 13 renewables along with 25 subsidiary & JV power stations.

The group has over 20 GW of capacity under construction, including 5 GW of renewable energy projects.

For  NTPC, the move was inevitable once it targeted generation of  nearly 30 per cent of its overall power capacity of 130 GW from renewable energy sources by 2032. In the more medium term, the firm hopes to develop 10 GW of solar capacity by 2025 itself.

For NTPC, the sharper focus would help, but challenges remain. As the  default final resort for power projects in trouble, especially where managed by other state owned entities, recent years have seen the firm take on a significant amount of capacity across thermal and  hydro for instance. These acquisitions can take time to  digest, even for a firm as large and experienced as NTPC in the power sector.

The form has also been a vehicle for a roll out of infrastructure in the Ev space, with EV charging stations, besides a goal to be a major player in the storage space too. Add to that, its ambitions in the power distribution space, where it is keen on taking on the license for Delhi state, and you have a firm whose management literally has its hands full.