'In 5 yrs, NTPC will mine 1/3rd of its coal needs itself'

What are your expectations for power generation growth for NTPC?

We seek to position NTPC as a maharatna enterprise, on course to becoming the largest and best power producer in the world. NTPC is the largest power generating company in India with an installed capacity of over 34,000 mw operating 28 power stations across the country. In 2011-12, we will be adding 5,000 mw and henceforth every year we will be adding 5,000 mw capacity. I can assure you that for power development we will be able to meet whatever target will be given to us.

What are the challenges you perceive in meeting your targets?

The only area of concern is how we will be able to meet our gas commitments, as we don’t have any gas allocation. Owing to this we may face some tough time in 2013-15, as several gas projects are planned in those two years. There will be a sudden dip in our capacity addition, and we have apprised the government in this regard. Given this scenario, it is quite late to do a complete course correction. However, we are doing our bit, and the results will only be visible in 2016-18. We are also getting more into wind, solar and coal-based energy and that too shall help.

There has been some criticism that in competitive bidding NTPC has not won a UMPP. Will you be bidding for a UMPP in the future?

We will generate power and will strive to generate power at the best possible rate. In UMPP too, we will participate in new tenders, but we will only quote a rate which we feel is workable to generate. We don’t want to quote a rate for which the shareholders will have to pay from their pockets. Also, you have to take into account which UMPP is available right now. The initial euphoria of UMPPs has settled down; projects offering R1.17 per unit price did not see the light of the day. We believe that R2.5-3 is the realistic price and we quote that.

What are your views about reports that some power plants are sitting on just five days of coal inventory
NTPC’s coal needs right now are at 140 mt, and by 2017 we will gradually raise it to 300 mt. Our mines will give us about 80 to 100 mt and we will only need 150-160 mt from Coal India and are importing 10% coal. In the next five years, one-third of NTPC’s coal requirement will be mined by NTPC itself. At NTPC, we keep a 11.3 days inventory. Probably we are a little conservative, and we are targeting 15 days’ inventory. We cannot comment on other companies.

It’s just a way of inventory management. The less you keep, the less land you need to store it.

It’s their method of how they handle the coal and the ash. We have to understand that the plant does not require much land, the maximum land is used by coal and ash handling system. It is a matter of how foresighted you are on planning your coal assets. But sitting on three-four days of coal inventory is definitely very risky.