NTPC plans to foray into power distribution

State-run power producer National Thermal Power Corposration (NTPC) plans to foray into power distribution across the country in a big way.

The company has already started internal discussions on the plan, expected to be finalised in medium future.

“We are exploring the business model for entering power distribution, whether to become a licensee or go for a franchisee route. Besides, we have also started looking at the related opportunities in various states and we will soon start discussions with the state governments on this,” a senior official from NTPC told Business Standard.

However, no investment has been earmarked for the new venture. “The investment proposal will be made according to the available business opportunities. This move will help NTPC in forward integration in energy chain,” the official said.

Entering into new stream of business will be done through its wholly-owned subsidiary NTPC Electric Supply Company Ltd (NESCL).

To begin with, NESCL has already formed a joint venture last year with Kerala Industrial Infrastructure Development Corporation to take up retail distribution of power in various industrial parks developed by it, SEZs and other industrial areas in the area. The JV company — KINESCO Power and Utilities Pvt Ltd — started its operations in February last year. It is also looking to distribute power within 5-10 km across all its stations.

NESCL, set up in 2002, provides turnkey execution of sub-stations and sub-transmission systems and consultancy for project management to utilities. It also sets up networks for supply of electricity in 5 km area around central power generating stations of NTPC.

The company has been planning to enter the power distribution segment for quite some time, but did not have any success earlier. It had earlier proposed to set up distribution networks in Kanpur, Patna and Mangalore among others, but the plan could not fructify.

NTPC, currently, has a capacity of 36,000 Mw. The target is to take the total capacity addition to 66,000 Mw by the end of the 12th Plan.