NTPC may put 7.4 GW of preconstruction capacity on hold: IEEFA

Coal Insights Bureau

NTPC may discontinue 7.4 GW of pre-construction capacity as it focuses more on renewable energy, a noted US-based energy research agency has said in a recent report.

“There is also a clear risk of underperformance on its 11.7 GW of underconstruction power plants – evident in the consistently declining utilisation rates in the five years to FY20 due to the addition of new capacity well ahead of demand growth,” Institute for Energy Economics and Financial Analysis said.

NTPC has 11.7 GW of coal-fired power plants under construction and 7.4 GW of coal-fired capacity under pre-construction development stages with various regulatory and environmental approvals pending, the report claimed citing data from Global Energy Monitor’s (GEM) Global Coal Plant Tracker (GCPT).

Under continuing pressure from deflationary renewable energy tariffs, India’s coal-fired fleet’s utilisation rates have collapsed to an unsustainable low of below 60 percent for the last three years while thermal power sector is facing difficulties with getting domestic coal linkages, water unavailability, environmental litigation, financial stress of state-owned Discoms and delays in construction.

The addition of new coal-fired capacity amidst depressed power demand during FY20 cannibalised performance of NTPC’s own capacity.

Based on reported Plant load Factor (PLF) and Plant Availability Factor (PAF), IEEFA estimates that NTPC’s coal plant utilisation factors reduced to 61.2 percent in FY20 from 66.9 percent in FY19.