Aim to grow capacity by 410 MW in FY17: NHPC

Hydropower company NHPC has recently commissioned two units of Teesta low dam hydro-electric project, Stage IV. The company’s current generating capacity stands at 6587 megawatts (MW), said KM Singh, Chairman & Managing Director of the company. In an interview to CNBC-TV18, Singh said the plan is to grow its capacity by 410 MW in FY17. Currently, the company has a total capacity of 6800 MW. The merchant price of power is Rs 2.50 per unit, he said, adding that some of company’s discoms are under stress.Below is the verbatim transcript of KM Singh’s interview with Latha Venkatesh and Sonia Shenoy on CNBC-TV18.Sonia: Can you start off by telling us what the operational updates have been for the quarter gone by, what has the total commissioning been that NHPC has done and how much is the capacity at currently? A: Presently our generating capacity is 6,587 megawatt including the 1,500 megawatt of the joint venture NHDC. Standalone, it is more than 5,000 megawatt from the 18 projects of NHPC. This Teesta Low Dam Project Stage IV (TLDP-IV) in West Bengal, we have commissioned two units of TLDP-IV, 40 megawatt each unit we have added during this year. Sonia: From this 6,587 megawatt of generating capacity that you have currently, how much do you think it could grow by say in the next 12 months or so? A: TLDP-IV balance two units, we are expecting to commission it by July. In June third unit, 40 megawatt and fourth unit, again 40 megawatt in July and same financial year, FY16-FY17, our plan is to commission our Kishanganga project which is 330 megawatt in Jammu and Kashmir (J&K). We are going to add around 410 megawatt during next financial year.Latha: At the moment you have 6,500 megawatt and you are going to add 410 megawatt by the end of Fy17?A: Yes. End of FY16-FY17 we will add further 410 megawatt. Latha: So you will be almost 7,000 megawatt by end of year? A: Yes. Latha: How much are you selling, are there buyers for all this, are discoms having a problem, is all this in power purchase agreement (PPA)?A: We are having long-term PPA but even then there is a crisis in the power market. Some of the states they are refusing to buy the power, even having these long-term PPA. We have no option to sell the power through trading because we cannot keep our machine idle. Whatever we can get, either around Rs 2.50 up down, maybe up to Rs 3 depending on the market positions, we are selling around 20 percent of the power.Latha: The merchant price for power now is between Rs 2.50 and Rs 3? A: Yes it is around Rs 2.50. It varies about Rs 3 and Rs 2.25 depending on the market position. This is only temporary crisis I can say. Sonia: I just wanted to ask you about this news report that was I reading which suggested that Jindal Power has approached NHPC asking it either to take over its hydro power projects worth almost 5,400 megawatt or to form joint ventures. Can you throw more light on what is the update; is there any progress that has been made on that? A: It is very initial stage. After joining on September 23 2015, my first visit was our Lower Subansiri project and then Itanagar. I met the Chief Minister (CM) of Arunachal Pradesh; he has asked to do this Middle Subansiri projects earlier. However, afterwards, Arunachal government has given to private sectors. I told CM of Arunachal Pradesh first either you withdraw with the private entrepreneurs, whoever is doing the project, then you can request us then we can think of and do the due diligence.Afterwards, we got the letter from Jindal Power also. They were offering three projects. They were asked to do due diligence and if possible we can go in a joint venture move or whatever after that it is in between agreement is there. Latha: Should we expect a deal and by when? A: Any deal which is not techno commercial viable, it is not possible. Depending on the sale of the power, until and unless anybody can do the business, nobody is going to agree for that. Being a government company, we cannot accept even a joint venture less than 51 percent. Second thing, if it is viable, then we can enter and that too we have to go for the government process, PIB, CCEA and everything, only we can start the project. Sonia: So we should not expect anything in this calendar year? A: This calendar year, from today it started, one year is there. We can’t say anything. After this Assam election, there may be some improvement. Our Lower Subansiri project, which was commissioned in December 2011, can be started out after Assam elections. Lower Subansiri project is a 2,000 megawatt project. As on date it is highest capacity in the country which is under construction presently. We will start it and around four years from the date of start it will take to commission it. Other than that in Arunachal Pradesh, we are having 2,880 megawatt Tawang project for which DPR we have submitted but some additional investigation has been asked by the CSMR. We have conducted it and very soon we will get the result and after that Tawang-I and Tawang-II, total 1,400 megawatt, that is also DPR has been submitted for the same.