NTPC sets sights on 128 gw capacity target by 2032

NTPC is hoping to raise its installed capacity to 128 gigawatts (gw) by 2032 from the current level of 32 GW planned in the long term.The company has targeted a share of 16% in gas-based power generation capacity. These projections are encouraging as the company is not into gas-based generation in a big way.

NTPC’s vision to have 16% gas-based power generation capacity by 2032 is based on the assessment that role of merchant plants will be critical in addressing the country's fast-rising peak power shortfall, NTPC chairman RS Sharma said.However, the question is how feasible is this plan?NTPC is running about 4,000 mw gas-based power generation capacity at places like Anta, Auraiya, Faridabad and Kayamkulam.

But its experience with gas-fired power plants has not been that good, at least until additional gas becomes available from Reliance Industries' D6 block in the Krishna Godavari basin. Before that, these plants were facing serious shortages of APM gas.

NTPC had to rely on costlier naphtha as an alternative fuel to fire these installed generation capacities. There were few takers for naphtha-generated power. State electricity boards took power supply from these plants as the last option. While domestic gas availability is projected to further improve over the coming years, it is unlikely to be enough for meeting the country’s growing energy needs. There will still remain a big gap to be met with imported LNG.

Not only LNG, India’s coal import is also projected to rise as domestic supplier Coal India is hard-pressed to meet the country’s coal demand.NTPC’s ability to implement its corporate vision will critically hinge on cost competitiveness of LNG vis-a-vis imported coal.

Meanwhile, India’s peak power shortfall is growing by the year. The country can meet its rising peak power demand from gas-based and hydro power plants only. While there are serious constraints in expediting hydropower generation capacity because of long gestation period and implementation risks, gas-based power generation capacity can be added at a fast pace provided gas is available.

Setting up gas-based merchant plants is the best option for India to tackle its growing peak power shortfall. Since tariff determination for merchant power plants is outside the purview of electricity regulatory commissions, they can easily absorb imported LNG.