September 08, 2008

NTPC to invest USD 3.3 billion to expand capacity

Mr T Sankaralingam chairman of National Thermal Power Corporation said that it will spend USD 3.3 billion or 18% more on adding power generation capacity, mainly coal fired generation capacity, in the year starting April 1st 2008 to help meet growing demand.

India’s government estimates the nation loses an estimated 2 percentage points of annual growth to electricity shortages and has plans to add 78,577 MW by 2012 to help beat peak hour shortages of up to 13% and NTPC plans to raise its output to 51,000 MW in the next 5 years.

Mr Sankaralingam said that “We are trying our utmost to ensure we meet our capacity addition targets keeping in mind the growing demand.’’ He added that it will spend USD 2.8 billion in the year ending March 2008.

He said NTPC will add 3 new coal fired units in northern India by March 2008, increasing its generation capacity to more than 30,000 MW from the current 28,334 MW. He added that “Most of this will be coal fired, considering LNG prices are becoming prohibitive. We have decided to postpone plans to set up new gas fired power projects by 2 years. We believe it is a very wrong time to get into the LNG market. We expect prices to settle by 2009-10.’’

It is noted that NTPC plans to invest as much as USD 1.3 billion on buying stakes in coal mines abroad and is in talks to import natural gas from Nigeria where it is negotiating a contract to build a 700 MW gas fired plant. It is also in talks to buy coal from Indonesia. Out of the total investment, USD 127 million will be invested through NTPC’s joint venture with state owned steelmakers Steel Authority of India Limited, Coal India Limited, National Mineral Development Corporation and Rashtriya Ispat Nigam Limited.