Why NTPC Is Showing Lesser Interest In RTC & FDRE Tenders?

NTPC Has Planned 60 GW Of Renewable Capacities By 2032.

India’s public sector power giant NTPC Limited has now explained why it is shy when it comes to Round-The-Clock (RTC) and Firm and Despatacble Renewable Energy (FDRE) tenders. The response from the NTPC management came to the fore when a query was raised regarding the lesser participation of the group in renewable tenders.

The NTPC management said that while it is planning to boost its renewable portfolio, it is taking part in selective RTC and FDRE tenders due to the inherent risks associated with these projects. This comes at a time when the CPSE (Central Public Sector Enterprise) has planned to add 60 GW of renewable energy capacity by 2032.

As per the official data by NTPC, the group has commissioned 4 GW of renewable projects. The top management of the firm in its recent investors call explained that the firm also analyse the likely returns from these renewable projects.

“Our participation is selective in a sense that we are participating in pure-play solar and wind also. But when it comes to some structured bids like RTC and FDRE, there we are evaluating the mix and what is the stipulation, what is the guaranteed parameters. And based on the risk profile in each of this and the returns expectation, we are selective in that approach,” the management of the company told investors.

Looking At Returns

It also added, “However, it is not that we are staying away from Bidding. We are being only selective because we have to look at the returns profile also, the risk also. So, we go about it very judiciously on that. Not for — not solely for the purpose of adding capacity but we are trying to calibrate the different aspects of the project and then taking a call on that.”

The management also elaborated on its collaborations with states for renewable projects. It said that Joint Ventures (JVs) with states often aid in ease of land availability for large renewable projects. It also said that the transmission network is now not a major issue for the firm.

“We we are following a strategy – a dual strategy of creating land banks through separate tenders. We are also – as I was mentioning to you that we are tying up in a big way with the state governments. Rajasthan and Maharashtra, which I mentioned, where essentially the partnering is because the state governments have better control over land. So, this would ensure that the JV partner brings the land on the table. We bring our Operational expertise & Finance. So by this methodology, we are ensuring the land,” the company said.

It also added, “As far as transmission connectivity is also concerned, we are not facing any major challenges here, and we have a early-mover advantage also. And the other issue is that because of taking up large-sized projects up to 1.5 to 2 GW then there is a mandate that naturally, the transmission evacuation has to be arranged over there. So, we are scaling up the size at the individual location in order to ensure that transmission doesn’t become a constraint.”

Year-Wise RE Trajectory

NTPC said that it targets to have a total operational capacity of 19.4 GW by FY27. It also has made a trajectory of renewable capacities accordingly. As per the plan, the group has planned to add 3 GW of capacities in FY25 alone.

“See, as far as the capacity expansion in renewable is concerned, this will be done majorly through the NGEL, the 100% subsidiary. The current year, the capacity addition expected is 3 GW. Next year, it will be 5 GW. And the year next, it will be 8 GW. So, by FY27 operational capacity will be 19.4 GW,” the management said in its investors call. It also said that it is likely to complete its 1 GW Pumped Storage Project (PSP) at Theri by December this year.

The management also clarified its stand on the signing of PPAs (power procurement agreements) and the awarded projects.

“The operational capacity is close to 4.3 GW. Now I will classify it into 2 further categories, a further 12 GW is contracted and awarded for which there are some PPAs have been signed, all documentations done. A further 11 GW is at different stages, these are definitive projects where there is a commitment. But however, the documentation in terms of award, in terms of PPA are in various stages, and we hope to take this into the control this year. So, we will have with this a clear pipeline of 25 GW of RE project comprising of solar, wind,” the management said in the investors call.