"Contribution of NTPC Ltd. to National Economy"

Electricity is central to achieving economic, social and environmental objectives of sustainable human development. In the present digital age electricity has emerged as the most crucial and critical input for sustaining the process of economic as well as social development. Development of different sectors of economy is not possible without matching development of the Power sector. Though the Indian power sector has achieved substantial growth during the post-independence era, the sector has been ailing from serious functional problems during the past few decades.

India, today, has an installed capacity of 1, 59,398 MW. Despite the recent slowdown, the country experienced a peak deficit of 12 per cent during FY 10.Power is one area of infrastructure where India lags far behind even in comparison to other developing countries. India’s per capita consumption of power stands at 706 kwh. As compared to this, the per capita consumption in China and US is 2,060 kwh and 13515 kwh respectively. In order to achieve annual GDP growth rate of 8 -10 per cent, the generation capacity must grow at a minimum of 8 to 9 per cent every year. According to the Expert Committee on Integrated Energy Policy, 778 GW and energy requirement of 3,880 billion kWh by 2031-32 if the country's GDP grows at the rate of 8%. At 9% GDP growth rate, the capacity requirement will be 960 GW and energy requirement will be 4,806 billion kWh by 2031-32.This translates into a capacity addition of over 30,000 MW every year for the next 22 years.

Genesis & Growth of NTPC

The Electricity (Supply) Act of 1948 provided for, among other things, setting up of the State Electricity Boards (SEBs) in each State, with the responsibility for generation, transmission and distribution of electric power. In 1975, the above act was amended to facilitate establishment of large regional power stations in the central sector. In the same year, National Thermal Power Corporation Ltd. was incorporated o 7th November, 1975 with the mandate for planning, promoting and organizing integrated development of thermal power (including Associated Transmission Systems) in the country. Today NTPC Ltd. is the leading power generating schedule ‘A’ Navratna Company of Government of India with a diversified portfolio. NTPC Ltd. has a vision “A World class integrated power major, powering India’s growth, with increasing global presence.”

NTPC commissioned its first unit at Singrauli in February 1982. Since then NTPC has grown to be the largest power generation utility in the country with a commissioned capacity of 31134 MW as on March 31, 2010 with 15 coal based and 7 gas based stations, located across the country. In this process, besides being India’s largest generation utility, NTPC has also grown to be the sixth largest thermal generating utility in the world, putting India on the global power utility map. Although NTPC’s market share of the total installed capacity of the country stands at 18.79% of the total national installed capacity but it contributes 28.60% of total power generation due to its focus on high efficiency.

In 1997, the Department of Public Enterprises granted Navratna status with powers of autonomy to the boards of nine PSEs, including NTPC. The objective was to turn these selected public sector enterprises into global giants. This status has helped NTPC in the speed of implementation of power projects, absorption of new technologies and formation of JVs in the core generation as well as support service businesses.

NTPC was among the first few PSUs to enter into a Memorandum of Understanding with the Government in 1987-88, and has since been signing the MOU with the Government every year. NTPC has maintained its performance under the ‘Excellent’ category (the best category) for the 21th consecutive year.

In October 2004, NTPC launched its Initial Public Offering (IPO) consisting of 5.25% as fresh issue and 5.25% as offer for sale by Government of India. NTPC thus became a listed company in November 2004 with the government holding 89.5% of the equity share capital. The issue was a resounding success.

Apart from power generation, which is the mainstay of the company, NTPC has already ventured into consultancy, power trading, ash utilization and coal mining. To reflect the diversification of business operations beyond thermal power generation to include, among others, generation of power from hydro, nuclear and renewable energy sources and undertaking coal mining and oil exploration activities on 28th oct. 2005 the name of NTPC was changed to NTPC LTd. On 3rd February 2010 NTPC Ltd again enters the capital market with its further public offer (FPO) of 5% govt. holding of 41.27 crores equity shares.

NTPC Ltd. ranked 317th in the ‘2009, Forbes Global 2000’ ranking of the World’s biggest companies. At NTPC people before Plant Load Factor is the mantra that guides all HR related policies. NTPC has been awarded No.1, Best Workplace in India among large organizations and the best PSU for the year 2009, by the Great Places to Work Institute, India Chapter in collaboration with The Economic Times. Recently on 10th April 2010 NTPC awarded with SCOPE meritorious award 08-09 for best practices in Human resource management by HE President of India.

The concept of Corporate Social Responsibility is deeply ingrained in NTPC's culture. Through its expansive CSR initiatives NTPC strives to develop mutual trust with the communities that surround its power stations.

NTPC contribution to National Economy

NTPC Ltd. generates electricity that lights homes, brightens villages, irrigates fields, powers businesses and moves the railways. With pan-India presence and perspective, NTPC is supplying power through its large and efficient fleet of power generating stations with total capacity of 31,134 MW. It has 22 stations, consisting of 113 units of different sizes, vintage and technologies but all have one common feature, that of generating power at high efficiency levels. NTPC’s stations and projects are located in 16 States and the Union Territory of Delhi. It supplies power to 24 States and 5 Union Territories. After the completion of its Bongaigaon Thermal Power Project in Assam, it will be supplying power to all the 28 States of India. NTPC has been described as a 'magnificent national enterprise’ It is a precious national asset and a profitable business enterprise.

In year 2009-10 NTPC recorded a generation of 218 BUs against target of 210 BU. Eleven (11) coal based stations of NTPC achieved a PLF of more than 90%.This is against 77.5% of the national average PLF for the year 2009-10.The PLF of NTPC all coal stations is 90.81% for the yr. 2009-10.The gas based power stations of NTPC Ltd. Also registered a remarkable improvement during the year mainly due to the availability of gas from KG D-6 gas block.In the yr. 2009-10 all gas based stations of NTPC Ltd. Achieves more than 75% PLF. As per MOU, NTPC Ltd. Committed to generate 226000 Million Units (MUs) of electricity in the year 2010-11 from its plants.

The Compound Annual Growth Rate (CAGR) of power demand for the last five years has been 6.80% as against power supply CAGR of 5.88%. The CAGR of NTPC Ltd. power generation has been higher at 6.79%. Strong appetite for electricity consumption in the country translates into robust growth outlook for power players like NTPC Ltd.

NTPC Ltd. paid highest ever interim dividend of Rs 3 per equity share being 30% of the paid-up equity share capital of the Company amounting to Rs. 2473.64 crore for the Financial Year 2009-10. Out of this, an amount of Rs. 2090.21 crore was paid to Govt of India holding 84.5% of NTPC’s paid up equity

For achieving the higher growth rate of 8-9% of national economy power ministry has set a target of 78,700 MW capacity addition target for XIth plan (2007-12). Being the biggest power company of India NTPC ltd. has set a capacity addition target of 21,941 MW for (2007-12) which it will achieve by setting 23 new units of power plant.Concerted efforts are being made to enhance power supply at a rapid pace and meet growing electricity requirements. NTPCLtd. is playing a major role in this national endeavor.

NTPC is in an extremely good position to grow in this scenario of growing power demand.NTPC provides growth momentum to the sector creates benchmarks of operational excellence and promotes sustainable energy development. It is committed to develop and provide reliable power, related products and services at a competitive price, integrating multiple energy sources with innovative and eco-friendly technologies.NTPC has 5 subsidiaries and 15 joint ventures which strengthen its business model aimed at related diversification and integration along the energy-value-chain as an effective growth strategy.NTPC’s stock remained the most resilient during the recent phase of market slowdown and turbulence, demonstrating that NTPC has the strength to maintain its course even in rough weather. Strong asset base of over Rs. 1 trillion or Rs. 1 lakh crore, robust business model, prudent strategies, growth oriented market and its corporate strengths guarantee steady progress of NTPC over the long term.

NTPC Ltd’s Participation in the development of power sector.

Partnership in Excellence - CEA has identified 26 stations which are operating at a PLF of less than 40%. These stations would have a “Partnership in Excellence” with better performing utilities, so as to achieve an improvement in performance in the shortest possible time.NTPC has been entrusted the responsibility of 14 stations out of the identified 26. Site office has been opened at all the 14 stations and experts have been posted at all sites. The teams will aim to implement the customized O&M systems and will carry out one cycle of overhauls.

Distribution Reforms and Up gradation management (DRUM)

A Collaborative effort of Ministry of Power and USAID was launched in 27.01.2005 with NTPC Power Management Institute business.

R&M of SEB stations - The 10th Plan envisages R&M of an installed capacity of 11,055 MW with a target of achieving 75-80% PLF and 20 years of Life Extension. NTPC has taken up consultancy services for a few of these stations.

APDRP (Distribution) - NTPC has been identified as the Lead Advisor cum Consultant (AcC) for implementation of APDRP programme targeted at improvement of distribution sector in 12 states.

Rural Electrification programme under Rajiv Gandhi Gramin Vidyutikaran Yojana (RGGVY) – Turnkey Execution Of rural electrification work in more than 40000 villages

Conclusion

In the process of realizing its Vision to become “A world class integrated power major, powering India’s growth, with increasing global presence”, and for achieving GDP annual growth rate of 8-9% by 2017 NTPC Ltd. is going to be have 75,000 MW generation capacity with diverse fuel mix with coal based capacity of around 53000 MW, 10000 MW through gas, 9000 MW through Hydro generation, about 2000 MW from nuclear sources and around 1000 MW from Renewable Energy Sources (RES).NTPC is poised to have about 47 mtpa coal production from its mines, 25 billion units power trading volume and an employee strength of about 35,000 by the year 2017. Thus NTPC is firmly on course to become a huge and integrated energy corporate and contributor to national economy.