India's NTPC Plans to Add 128,000 Megawatts of Capacity by 2032

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Written by Richard Finlayson, Senior International Editor for Industrial Info Resources (Sugar Land, Texas)--Targets for additional generating capacity to India's national grid during the 12th Five-Year Plan (2012 -17) are already being modified in the face of coal-feed supply shortages and the inability to move planned projects through the final phases of permitting.

At the beginning of November, the Central Electricity Authority's data showed that 89 power plants with a total capacity of more than 40,000 megawatts (MW) had 'supercritical' coal stocks, or not enough for four days of operation. Half of these plants had fuel supplies for only one or two days, and more than 8,500 MW of generating capacity was stranded with no fuel whatsoever.

In addition to the critical fuel supply situation, the Confederation of Indian Industry has called for reforms in the power sector, stressing the need stop transmission and distribution losses--which is code for "the illegal diversion and theft of power." When theft and agricultural subsidies are combined, almost 40% of power generated has little or no cost recovery, with the resulting system dysfunctions hitting the consumers.

Against the backdrop of a Power Industry struggling to sort out endemic problems, the country's largest power generating company, state-controlled NTPC Limited (BSE:532555) (New Delhi) has announced plans to expand its capacity to more than 128,000 MW by 2032. NTPC has 15 coal-fired and seven gas-fired power plants and six joint venture power projects across India with a total installed capacity of 34,854 MW. This represents 18% of the country's installed capacity. In 2010-11 the company supplied 27% of electrical power generated in India.

The company has 14,000 MW of projects at various stages of implementation and is working on a total of 40,0000 MW of project plans, Although 2032 is 20 years away, the present obstacles to project progress may cause bottlenecking in commissioning new capacity through the next 10 years. If, as seems likely, there is significant project slippage through 2017, NTPC will need a number of factors to play out in its favor to make the ambitious 2032 target a reality.

In the September to mid-October period, about 5,000 MW of NTPC's power stations were shut down because of coal shortages. Many continue to operate on supercritical stocks. A spokesman said that the company is exploring long-term import tie-ups for coal and regasified LNG at competitive prices in the face of local shortages and the poor quality of the coal delivered.

NTPC Chairman and Managing Director Arup Roy Choudhury said that with NTPC's plant load factor exceeding 90%, power generation had picked up. But he said that the use of imported coal was not a viable option for Indian power producers.

For related information see October 20, 2011, article - India's Coal Sector Seeks Reform as Planned Power Targets Threatened.

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