With a total installed capacity of 34,194 MW, NTPC is more than 10 times bigger than its nearest competitor in the private sector, Tata Power. The company, which has around 18 per cent of the total national power capacity, contributes 30 per cent to its total power generation.
NTPC Chairman and Managing Director Arup Roy Choudhury says that is a result of better capacity utilisation. "In the last financial year, we achieved a plant load factor (PLF) of 88.29 per cent against the national average of 75.07 per cent, which means that the company has utilised its fuel optimally and effectively." In order to secure this fuel, NTPC is using a multi-pronged strategy.
|NTPC is focusing on backward integration by acquiring and developing coal mines|
It aims to reduce its dependence on coal, from around 85 per cent at present to 56 per cent by 2017
Seven NTPC thermal power stations fi gure among the top 10 stations in the country in terms of plant load factor
First, it has signed a 20-year contract with Coal India to ensure 90 per cent of coal supplies for its existing plants at a 40 per cent discount to imports. At the same time, it is pursuing coal block acquisitions in Indonesia and Mozambique apart from scouting for mines in Australia and Canada through a joint venture.
NTPC has also ventured into coal mining. However, out of eight blocks allocated to NTPC by the coal ministry, five have been deallocated on charges that it is not serious about developing them.
"We are hopeful that the government will reconsider its decision," says Choudhury, 54, who moved to NTPC last year in September after serving as CMD of the National Buildings Construction Corporation where he became the youngest-ever public sector CEO. Still, shortage of coal and delays in capacity expansion could affect the company's operating efficiencies and hence its earnings. In 2010/11, the company blended 7.8 per cent of its coal consumption with imported coal, up from 4.9 per cent in 2009/10.
Higher blending translates into higher cost of power generation. For every increase of 10 percentage points in blending, the cost of generation goes up by 30 to 40 paise per unit.
Choudhury admits that imports will likely continue. But he points out that NTPC has come a long way in project execution. From 68 months, project execution time is down to 39 months, as with Dadri brownfield and Jhajjar greenfield projects, he says.