‘NHPC working on Rs 26k-cr capex

NHPC has been spearheading the government’s green drive in the power sector, harnessing the huge hydro power potential of the country. With an installed capacity of about 5300 MW, the company is among the largest power producers in India, and has ambitions to be a top hydro power producer globally. The company has projects of about 15,000 MW in the pipeline for implementation over the next decade. NHPC, which had an IPO last financial year, now aims to expand its overseas presence. Its director finance and chairman & managing director ABL Srivastava spoke to FE’s Subhash Narayan about recent developments in the hydro power sector and, more specifically, in the company. Excerpts:

Hydro power is increasingly becoming an important source of power generation. What kind of potential do we have?

India is endowed with abundant hydro power potential of about 149 gw (giga watts), of which only 25% has been developed so far. The untapped potential provides ample opportunities to hydro power developers. NHPC, on its part, is executing 12 projects with an aggregate capacity of of 5322 MW. Though these were part of the Eleventh Plan (2007-12) projects, some of the projects may now spill over to the next Five-Year Plan.

Three projects with an aggregate installed capacity of 1150 MW—namely Teesta-V (510 MW) in Sikkim, Omkareshwar Power Station (520 MW) through NHDC in Madhya Pradesh and Sewa-II (120 MW) in Jammu & Kashmir—have been commissioned during this Plan. The construction work on six more projects of over 1200 MW is in full swing. The installed capacity of NHPC at the end of this Plan period is likely to be around 6500 MW and we are aspiring to become a 9500 MW company by the end of 2013.

For the next Plan, NHPC proposes to add 1895 MW of new projects together with 2960 MW of capacity spilling from the Eleventh Plan projects. In addition, the company is working on a capex of Rs 26,000 crore for its future capacity addition.

Hydro power companies face many barriers like the long-gestation period of projects. How does NHPC overcome these barriers?

Construction of hydroelectric projects is a challenging task that not only involves meticulous planning and huge investments but also numerous unforeseen hurdles that can stall work at any point of time. Law and order, geological surprises, contractual complexities, delay in obtaining statutory clearances, difficult logistics, inclement weather conditions, poor infrastructure, land acquisition problems, dearth of trained manpower and additional demands by state governments have been the major impediments to the progress of hydro power projects.

NHPC is addressing these issues with focused attention so as to accelerate the pace of hydro power development in the country. The company has now started executing projects in a definite time-frame. This capability has been demonstrated by the early completion of the 300 MW Chamera-II Project in Himachal Pradesh, 1000 MW Indira Sagar Project and 520 MW Omkareshwar Project in Madhya Pradesh.

NHPC is going beyond hydro electric power into thermal and renewable energy. What is the progress on these fronts?

NHPC will not enter into thermal power generation on its own. This initiative will be carried out by our subsidiary NHDC— joint venture between NHPC and the Madhya Pradesh government. This company will set up a 1320 MW thermal project at Revapur in Khandwa district. Another thermal power project of 1320 MW at Shahpura in Jabalpur district has also been offered to NHDC. Besides, NHDC has been allocated site in the state for 100 MW wind power project in the Kukru region of Betul district.

Is NHPC contemplating any overseas expansion of its operations?

Our expertise in hydro power development is being utilised in countries like Bhutan, Myanmar and Tajikistan. NHPC has entered into agreement in Bhutan for providing engineering & consultancy services relating to pre-construction activities of Mangdechhu Hydroelectric Project (720 MW) in that country. Besides, the company has been contracted to prepare DPRs of 670 MW Chamkarchhu-I and 1800 MW Kuri-Gongri HE projects in Bhutan. NHPC has been designated as the executing agency for the 1200 MW Tamanthi and 642 MW Shwezaye hydro power projects in Myanmar.

What role has NHPC played in the preservation of the environment?

NHPC is deeply committed to the preservation of the environment even as it meets its objectives of harnessing hydro power. NHPC has given paramount importance to executing and operating its projects in an environment-friendly and socially responsive manner. The company conducts comprehensive environmental impact assessment (EIA) studies, on the basis of which environment management plans (EMPs) are prepared to address the concerns of environment conservation. In the event of any adverse impact on the environment from its construction activities, the company takes care to mitigate such impact through compensatory measures.

How will competition affect NHPC?

As per the CEA assessment, the hydro power potential of the country is 1, 48,701 MW, out of which only about 37,000 MW has been developed so far. The balance, approximately 75% of the total potential, still remains to be tapped. NHPC will continue to remain the number one in hydro power development irrespective of competitions in the sector.