NTPC to award contracts for 4.8GW coal power projects in next three years

NTPC is now aggressively looking at expanding the capacities of its existing thermal power plants, apart from identifying a few brand new projects.

After awarding the contract for a 1,320 megawatt (MW) thermal power project in Odisha’s Talcher, state-run NTPC Ltd has finalised awarding contracts for four more coal-fired power projects over the next three years, NTPC Ltd's management said in a post-Q2 result conference call on October 29. These four projects will add 4.8 gigawatts (GW) of electricity generation capacity to the country.

NTPC Ltd, which is India’s biggest electricity generation company (genco), is going to set up new thermal power units at Sipat (1x800 MW) in Chattishargh, Singrauli (2x800 MW) in Uttar Pradesh, Darlipali (1x800 MW) in Odisha, and Lara (2x800 MW), again in Chattisgarh. All these four projects will be expansion projects wherein additional units will be added to the existing thermal power plants.

The expansion plan comes at a time when the Central Electricity Authority (CEA), an advisory body to the power ministry, has stated that India expects its annual power demand to grow at an average of 7.2 percent over five years ending March 2027. This is nearly double the growth rate of over 4 percent seen during the last five years till March 2022.

NTPC is now aggressively looking at expanding the capacities of its existing thermal power plants, apart from identifying a few brand new projects. “We are going by the requirement of the country. Accordingly, we have been told by the Government of India to add capacity in the order of 7,000 plus MW (7 GW). We have identified many other projects. Each of our existing projects has an expansion capacity. So, adding 660 MW here or there can be possible,” said Ujjwal Kanti Bhattacharya, Director (Projects) during the conference call.

“Large projects like Meja, for example, 2x660 MW and Telangana, 3x800 MW are possible. But, we are working on this from various points of view like coal availability, environmental clearance, and actual requirement in the grid. So, we are a bit cautious, though we are steadily moving ahead,” he said.

The contract for the proposed plant at Lara will be awarded by March 2023. For the Sipat project, the same will be done in the second quarter of FY 2024 and the one at Singrauli will be awarded by FY 2025. For the Darlipali plant, the NTPC is currently resolving forest land issues and if that is cleared early, work will be awarded by FY 2024, senior officials at NTPC Ltd said.

Besides these, NTPC Ltd has already awarded a contract to BHEL for a 2x660 MW (1,320 MW) thermal power plant at Talcher, Odisha. Being built at an estimated cost of about Rs 11,000 crore, the first unit of the Talcher thermal power plant will be commissioned by August 2026 and within that financial year itself, i.e., FY27, the entire project will be completed, a senior NTPC official said.

NTPC will be spending about Rs 50,000 crore on these five projects (including Talcher), which comes to an annual CAPEX of about Rs 12,000 crore on coal power projects.

India has committed to turning net zero by 2070. But as a country that still derives about 75 percent of its electricity from coal, it has been clear that while renewable energy capacity growth will be high, coal-based plants will still play an important role.

In fact, at COP26 last year, India took a firm stand to “phase down” the use of coal instead of “phase out.” This was aimed at easing the financing challenges of coal-based projects. The power crisis the nation faced this March-April, as coal supply dwindled amid a heat wave and a pick-up in demand, highlighted just how important coal-based power continues to be in the country.

With climate change becoming a reality, countries across the world made a stronger commitment to reduce the use of what is described as the “dirtiest fuel” by climate change activists – coal. But the global energy crisis after Russia invaded Ukraine has refuelled interest in coal in countries from Europe to Asia. Denmark, which sources over 60 percent of its electricity from renewable energy, has asked its biggest energy firm Ørsted to continue or restart operations at three fossil fuel facilities to ensure energy security.

In July, the UK government directed its Department for Environment, Food and Rural Affairs (DEFRA) to temporarily relax conditions for the running of coal-fired plants in winter. In view of the energy crisis, the government had said that some of the coal-based plants that were to shut this year may continue to operate.