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Board gives green signal to investment in 2 solar projects: NTPC

Board gives green signal to investment in 2 solar projects: NTPC


NTPC board has approved investment in two solar projects with an estimated cost of Rs 3,104 crore, said AK Jha, Director-Technical at NTPC in an interview to CNBC-TV18.

One of the two projects, situated in Rajasthan, has 260 MW capacity with 4 blocks of 65 MW each. The second project is located in Madhya Pradesh with 5 blocks of 50 MW each. Both projects are expected to be commissioned by March 2017, he said. Jha also added that the company plans to ramp-up its own solar capacity to 10 GW by FY22. Below is the transcript of AK Jha’s interview with Sonia Shenoy and Reema Tendulkar on CNBC-TV18.

Sonia: If you can take through what the plans are with respect to these two projects?

A: Actually, we have placed the order for two projects. One is in Rajasthan for 260 megawatts with four blocks of 65 megawatt each and this will be commissioned by March, 2017 that is 12 months time. And the other order which has been placed for Madhya Pradesh – five blocks of 50 megawatts each. And this will also commissioned by March, 2017.

Reema: Could you give us a sense of what the solar power tariffs are because I was reading and article a few months back, earlier this year, which said that solar power tariffs have hit a new low of Rs 4.34 per unit in Rajasthan. So, what are the kind of tariffs that you expect?

A: We have seen some of the very low tariffs in solar which was earlier, which could not have been thought of. But then these tariffs, these lower tariffs have come under the national solar mission where the developers are to generate and they have to sell. The entire responsibility is with those private developers. So, we have to see that really how much of them will, they will be viable to generate at that price. But I am sure that they must have done their financial engineering and technical getting properly. But, definitely, these were quite a surprise for the sector. But even if you look at generally, the solar tariff cost has been coming down because when we were doing Andaman five megawatt, that time the engineering, procurement and construction (EPC) cost was around Rs 12 crore per megawatt. And when we ordered Andhra Pradesh last year, the cost was Rs 6.36 crore per megawatt and when we have ordered Rajasthan and Madhya Pradesh this year, the rates are Rs 5.36 crore per megawatt. So, there is a significant fall even in the domestic pricing of the solar panels. So, the main reason probably is the volume because initially, it started with 5-10 megawatts, small steps, but now we are getting into 250 megawatts and that kind of a scale. So, probably that is another reason that scales have been able to bring down the prices.

Sonia: So, you told us that by March, 2017, you will have 500 megawatts of solar capacity that you will have approved and will come on stream, but can you tell us also about the additional 24 gigawatts that was expected to be commissioned by FY20, that was your earlier capital expenditure (Capex) plan that you had spoken about. Are you on track or would you be looking to downsize that?

A: Two things. On the solar front, we have already operating capacity of 110 megawatts and we have the capacity under construction of 760 megawatts. And we have capacity under bidding which is 1,750 megawatts. So, by end of this year, we will be ordering all the 3,200 megawatts of solar which will come one year after the date of ordering or one year to 18 months time. On the capacity Capex plan other than solar which are very much on track on the 24,000 megawatts which we discussed last time. This year also, we have been able to commission 2,255 megawatts of capacity which is more than what we had targeted and we are very sure that these targets of 24,000 megawatt capacity addition will be received in time.

Reema: Since we have you, if you could just give us a check on how the demand is, what the plant load factors (PLF) you are operating at and what we can expect in the coming quarters?

A: There is definitely, we all know, this is not a hidden secret, the demands have not been rising at the rate at which the capacity addition is rising. And, a lot of capacity, you know that in the last 2-3 years the capacity addition has been phenomenal compared to the demand and compared to any period in the past 5-year plans. So, we have been operating at around similar capacity level, load factors level at 78 percent this year, roughly my figure, 78 percent load factor. And I see that maybe going into the future with the Ujwal DISCOM Assurance Yojana (UDAY) scheme getting successful gradually, one by one states will be coming into the black from the red. The demand is only going to increase. So, I have a lot of expectations that these load factors have already seen the lowest and it will only increase.

Sonia: When you say only increase, can you give us a number because way back in FY15, you had about 85 percent PLF, is there any chance of that coming back in FY17?

A: It will come back, but not in FY17. That is my estimate.

Reema: And what would the average tariffs look like for the coming quarter considering that we have seen a decline in tariffs?

A: On the thermal side?

Reema: Yes, on thermal, solar, on a blended basis, if you could give us a sense of what the average tariffs of NTPC could look like.

A: We have been trying to reduce the tariff on the thermal side by rationalising the coal and reducing the import of coal. And we have reduced this year, the import of coal, by more than 42 percent. And as the Coal India production increases, the coal import will get reduced and therefore, the tariff will come down. I will not be able to give you any figure as to how much it will be, but definitely it will further go down. On the solar side also, the tariffs are already going down, but in the short-term, it will stabilise at certain levels and then probably because a lot of players have come in and how do they perform, that will decide whether the people will still remain aggressive in their bidding or they will like to be slightly conservative. So, in the short-term the solar tariffs are going to stabilise around this price, but in the long-term they will definitely further come down.

Anand Gupta Editor - EQ Int'l Media Network


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