NTPC leading India’s renewable energy revolution: report

27 May 2017


The country's largest power producer NTPC, long associated with coal-fired power generation, is now all set to lead the country's charge for renewable energy production.

With NTPC accounting for a major chunk of renewabale power projects coming up across the country, state-owned NTPC Ltd is poised to facilitate India's bid to achieve its ambitious national renewable energy targets, says a report.

By facilitating the India's drive toward ambitious national renewable energy targets NTPC is also leading the global energy transition, a report published by US-based Institute for Energy Economics and Financial Analysis (IEEFA).

"Despite its deep historical connection to coal-fired electricity generation technology, NTPC has recently moved to the forefront of India's energy transition and stands to be the country's key new energy enabler" said co-author of the report Tim Buckley, director of energy finance studies, IEEFA.

''The role NTPC is now playing in transforming the Indian energy sector in its ongoing shift away from the increasingly stranded assets of the fossil fuel industry cannot be underestimated,'' said Buckley.

The report, however, notes that NTPC's entry in the country's renewable energy market comes at a time when overseas investors are seeking more opportunities in the country's renewable projects.

The 44-page report titled ''NTPC as a Force in India's Electricity Transition'' showcases how the Narendra Modi government is shifting rapidly towards a low-carbon economy - a step towards achieving the 2015 Paris Climate Agreement aim of cutting greenhouse gases from burning fossil fuels.

NTPC (National Thermal Power Corporation as was earlier called), which accounts for a quarter of India's electricity and is among the top 10 coal-fired power generators in the world, is now playing in transformational role in the energy sector as it shifts away from fossil fuel-based power generation, reports quoted Tim Buckley, IEEFA director of energy finance studies for Australasia as saying.

While NTPC's priority is to underpin growth in power generation, it would now increasingly turn to renewable sources like solar power where costs have fallen below that of coal-fired power.

''With the average new solar tariff in 2017 below NTPC's coal-fired power tariff for its existing fleet, it is clear that renewable energy offers a cheaper way to provide power,'' report co-author Buckley said.

Solar prices hit a record low twice this month. On 10 May, India finalised a new auction at the Bhadla solar park in Rajasthan with the award of a power tariff at a record low Rs2.62/kWh ($0.040/kWh), 12 per cent below the previous record low Rewa solar tariff awarded only just three months ago in Madhya Pradesh.

Two days later, the auction for the remaining 500MW solar capacity came in at Rs2.44/kWh ($0.038/kWh), down yet another seven per cent.

This tender was also for projects at the Bhadla Phase IV solar park. ''The ongoing Indian electricity transformation, which can be increasingly spearheaded by NTPC, will have global ramifications not least for the thermal coal sector which faces a technology driven structural decline,'' Buckley said.

Energy minister Piyush Goyal's plan to cease thermal coal imports by the end of this decade is being led by NTPC which has already stopped them this past fiscal year. ''Coal exporters that are looking to India to prop up volumes as China continues to reduce coal consumption are going to be disappointed,'' he said.

India's renewables boom is attracting the attention of a diverse range of leading overseas investors, including banks, utilities, pension funds and asset managers. They include Goldman Sachs, JP Morgan, Morgan Stanley, the Macquarie Group, Sembcorp, Enel, EDF, Engie, SoftBank and Brookfield.

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