Exclusive | No more wind energy; NHPC will focus on solar power, says official

NHPC Ltd is also actively looking at pumped hydro projects.

NHPC Ltd does not plan to invest in wind energy and will focus only on solar power for its renewable energy portfolio, the PSU’s director (finance), RP Goyal, told Moneycontrol.

“Whatever we are going to do in the renewable energy (RE) segment, it is going to be solar only. Wind energy is not our focus and there are no projects planned on that front,” Goyal said.

NHPC has a 50 megawatt (MW) wind energy farm in Rajasthan’s Jaisalmer district, which was commissioned in 2016. The project’s performance has been below the committed generation due to high intermittency of wind. “Our lone wind project in Jaisalmer has not been satisfactory. Building that project cost us more than what building a solar farm of the same capacity (50 MW) in Tamil Nadu did, and it is giving us lower returns than the solar project,” said Goyal. “So, our experience with wind projects has not been good. On the other hand, our solar project has exceeded its committed generation.”

Also read: All tenders for India's biggest hydropower project to be awarded by December: NHPC Ltd.

The miniratna aims to remain a hydropower giant, Goyal added. NHPC currently has around 9,000 MW under construction, of which two projects — the Dibang multi-purpose hydropower plant of 2,880 MW and Subansiri Lower of 2,000 MW — will be the biggest hydel projects in India. At least 15 percent of the existing hydroelectric capacity (nearly 47,000 MW) in the country has been set up by NHPC Ltd.

“There are plenty of opportunities in hydro. So, we will remain a hydro-driven company. We will maintain an 80:20 ratio, where 80 percent is hydro because our human resources are limited, and 20 percent will be renewables,” said Goyal. “In renewables, as I said, we will do solar projects, but selectively, keeping at least a 12 percent return on equity (ROE). We will not go below 12 percent.”

The company currently has 1,040 MW solar projects under construction and these will come up in Gujarat (600 MW), Rajasthan (300 MW), Andhra Pradesh (100 MW) and Odisha (40 MW). Another 125 MW, with 50 MW of floating solar in Kerala, is at the tender stage.

NHPC Ltd also has a green energy subsidiary, NHPC Renewable Energy Ltd (NREL). However, the company’s renewable assets are yet to be transferred to NREL. Goyal said it would be done eventually as the company will be looking at raising funds through an IPO or stake sale of NREL.

Centre gives NHPC 22 GW target for pumped storage

The Central government has asked NHPC to explore pumped storage projects totalling a capacity of 22,000 MW (22 GW), the senior official said.

“We are working on pumped hydro storage projects quite actively. We have recently signed MoUs with the governments of Odisha, Andhra Pradesh and Maharashtra. We are also exploring opportunities in Madhya Pradesh and Gujarat,” Goyal said.

Pumped storage hydropower is a type of hydroelectric energy storage system that the Indian government is promoting as battery energy storage systems remain largely unaffordable. Pumped hydro storage is a configuration of two water reservoirs at different elevations that can generate power as water moves down from one to the other (discharge), passing through a turbine.

First tender under Centre's RE bidding trajectory floated

As part of the bidding trajectory set by the Ministry of New and Renewable Energy (MNRE) for four Central PSUs, NHPC Ltd has invited bids from select developers for setting up 3,000 MW (3 GW) inter-state transmission system (ISTS) connected solar power projects across the country.

The last date to submit the bids online is August 3 and the bids will be opened on August 11. The winning bidder will have to commission the project within 18 months of signing the power purchase agreement (PPA).

“As per the trajectory, we have been given a target to bid out 10,000 MW (10 GW) each year. As per this model, there will not be any CapEx from our side. We will only be the facilitator, wherein we will arrange one developer and one buyer. We will align both of them and we will earn 7 paise in this transaction,” Goyal said.

The MNRE has appointed NTPC Ltd, Solar Energy Corporation of India (SECI) Ltd, NHPC Ltd and SJVN Ltd as the renewable energy implementing agencies (REIAs) for floating tenders and opening of bids for a total of 50 GW every year. Per the trajectory, SECI and NTPC will have to invite bids for 15 GW each of RE projects, while NHPC and SJVN will have to seek bids for 10 GW each in the ongoing financial year.