NTPC To Add 26-GW Brownfield Thermal Capacity To Economise Cost

As part of the Indian government's plan to add 80 GW of thermal power capacity by 2030, NTPC Ltd. will develop 26 GW of proposed capacity as a brownfield expansion closer to the coal mines, a senior company official said.

Expanding power projects that are attached to the pit-head coal mines or that are closer to such mines will help save on cost compared to setting up greenfield projects, Gurdeep Singh, chairman and managing director of NTPC, told analysts recently.

“The completed cost (inflation-adjusted cost) of these projects will come to Rs 10–11 crore per megawatt, while the tariff will be between Rs 3.5–Rs 5/kWh,” Singh said. All the projects will be on a regulated cost-plus basis, and no capacity will be on merchant power, he added.

“We believe its (NTPC’s) regulated equity base will increase with the addition of 26 GW of thermal capacity. An expanding renewable energy pipeline and foray into new business verticals of green hydrogen and pumped hydro storage would drive growth,” Rupesh Sankhe, vice president and power analyst at Elara Securities, said.

Despite India’s push for renewable energy and its plans to add 500 GW of renewable energy capacity by 2030, the country will require at least 80 GW of thermal power capacity by 2032 to meet the rising power demand, which is growing at 7–8% every year.

According to Crisil Ratings Ltd., thermal power will be needed to meet nearly half of the growing annual demand in the near to medium term. With limited new capacity being added, there will be ongoing reliance on existing thermal plants. Additionally, thermal power will continue to be crucial for meeting base load needs due to the inconsistent nature of renewable energy and the lack of reliable storage solutions.

“We will review our decision on setting up brownfield or greenfield projects if we go for capacities beyond 26 GW,” Singh said.

While construction activity for the 9.5-GW capacity has already started, around 8 GW is under the tendering process, and the remainder, 8.5 GW, will be awarded in the next three months, Singh said.

NTPC has an installed capacity of 76,000 MW, of which hydro capacity is 2,925 MW and solar capacity is 2,906 MW.