NTPC eyes $50 billion capex to transform into a complete energy company (2024)

The people said that India's biggest power generation company will spend $5 billion each year over 10 years to foray into production of various clean fuels and also towards increasing its power generation capacity.

“The company is looking at a diversified role where NTPC may (methaphorically) stand for ‘national transport, power and chemicals’," the first person cited above said on condition of anonymity. "There are major plans for methanol, ethanol, green hydrogen for transportation and also sustainable aviation fuel (SAF), for which it is already in talks with some airlines."

NTPC will undertake these activities itself with no plans for a subsidiary currently, although green hydrogen would be produced through its existing subsidiary NTPC Green Energy Ltd.

Queries sent to NTPC remained unanswered till press time.

Sustainability is the operative word

Sustainable aviation fuel has been a focus area for energy companies with the government announcing an indicative target of 1% SAF blending in jet fuel by 2027, which may gradually be increased to 2% by 2028 for international flights.

Already, oil refining and marketing companies such as Indian Oil Corporation Ltd (IOCL) and Bharat Petroleum Corporation Ltd (BPCL) have forayed into the space with research underway for various modes of SAF production.

Also read: NTPC eyes 10GW nuclear capacity, new subsidiary

For the production and adoption of methanol as a clean fuel, NTPC is in talks with several shipping lines, the people cited above said.

Its first methanol plant is being constructed at the Vindhyachal Thermal Power Plant in Madhya Pradesh, by Jakson Green, which deals in engineering, procurement and construction (EPC), and operations and management of new energy assets including solar, utility-scale, energy projects, among other green energy projects.

The plant, with a capacity of 10 tonnes per day, is likely to be completed by July, according to the second person cited above.

Thereafter, NTPC plans to set up another methanol plant with a capacity of 100,000 tonnes per year or nearly 274 tonnes per day. “NTPC is planning to set up another methanol plant with a capex of about ₹5,000-6,000 crore. The capacity will be 1 lakh tonnes per year," the second person said.

NTPC's diversification comes at a time when the country is aiming to achieve net-zero carbon emission by 2070.

The company already aims to install cumulative renewable energy capacity of 60 GW by 2032 through its subsidiary NTPC Green Energy Ltd (NGEL).

NGEL is expected to go public in the current fiscal with an aim to raise about ₹8,000 crore. The proceeds would be used for the green energy subsidiary's energy transition projects including in green hydrogen and energy storage.

NTPC also plans to foray into nuclear power generation on its own with a target of about 10 GW in the next few years. Currently it is developing two plants in a joint venture with Nuclear Power Corporation of India Ltd (NPCIL) in Madhya Pradesh and Rajasthan, and is expected to get approval for a wholly owned subsidiary soon from the government, as reported by Mint on 4 June.

Also read: Avaada Energy secures 1,050 MWp solar power project from NTPC

In its annual report for FY23, the company said that is is working with NITI Aayog and has signed a statement of intent for preparing its 'net zero' plan in line with the country’s commitment of becoming net zero by 2070.

The plans for power generation

NTPC is also gearing up to meet the growing demand for power in the country. Noting that thermal power continues to be the mainstay of India's power system and is expected to remain so for the next few years, the first person mentioned above said that the company would set up about 26 GW of the targeted 80 GW additional coal-fired capacity by 2032.

“The company will be doing the capex of not less than $5 billion dollar for the next 10 years for diversification, along with renewable, thermal...everything," said the person.

It will, however, set up brownfield thermal projects, which means it would expand capacity of existing power plants, rather than go for new or greenfield projects. “Brownfield projects would largely not require land acquisition and it would ensure lower expenditure and faster implementation of the projects," the first person said.

Power demand rising

With power demand touching record levels every summer for the past two years, and with a crisis-like situation witnessed in 2021 and 2022 due to low availability of domestic coal and high prices of the imported mineral, the Centre has ramped up efforts to boost coal production and also install additional coal-fired power capacity in the country to meet the rising demand.

The plan is to boost thermal power capacity despite the ambitious target to achieve 500 GW of installed non-fossil capacity.

Also read: India's peak power demand hits another record at 250 GW

The government has said several times that the renewable energy target and net-zero goals would remain intact despite the renewed push for coal.

The NTPC Group, including its joint ventures and subsidiaries, currently has a cumulative power generating capacity of 76.04 GW. Of this, 62.19 GW is sourced from coal, 6.5 GW from gas or diesel, and 7.34 GW is renewable energy, including hydro power projects.