NTPC in JV with Japan co, ADB

For state-run generation utility NTPC, the answer is blowing in the wind. Stung by high fuel costs, the company is chasing a green deam by forming a joint venture with the Asian Development Bank and Kyuden International Corporation, a wholly-owned subsidiary of Japan’s Kyushu Electric Power Company , for producing power from renewable sources.

The joint venture has set a target of achieving a capacity to produce 500mw — primarily from wind power plants and small hydel projects — within three years. The venture will eventually look at setting up such plants abroad in future. NTPC will initially hold 50% in the venture and the other two partners will have 25% each. The move is part of NTPC’s strategy of adding 1,000 mw green capacity to its portfolio in the long term. This is aimed at rationalising fuel usage and better manage peak load. Besides, such actions will improve the company’s green footprint and help it secure a bigger pie of the carbon credit market.

Initially, GE Energy Financial Services of the US and Brookfield Power Company Ltd of Canada were also part of the venture. But they later exited in the wake of the global downturn. The joint venture aims at taking in one more strategic partner in the next 12 months. After induction of the new investor, NTPC’s equity will come down to 40.3% and the three other partners will have 19.9% each.

Of the 1,000 mw green capacity , 650 mw is to be added through wind energy by 2017. NTPC is assessing various potential locations for wind farms in association with the Centre for Wind Energy Technology (C-WET ), a research and development institution under the Ministry of New and Renewable Energy. NTPC has expertise for capacity addition in wind energy and other renewable sectors but to put 50 mw of wind farm on fast-track , the company has approached C-WET as consultant. NTPC’s foray into wind power comes after similar strategies adopted by other companies such as ONGC, HPCL, Tata Power, Reliance Energy and BP.