NTPC Q4 results Strong, Renewables Take Centre Stage for Future

NTPC ended fiscal year 21 with a renewable capacity of 1.86GW, aims for 60GW by 2032

NTPC Limited, announced its Q4FY21 numbers on Saturday. The state-owned power company reported strong results, partly due to the base effect of low power demand from last year’s Covid hit demand.

In the previous fiscal year, net profits were Rs.14,969.40 compared to a total of Rs.11,191.98 in 2019-20.

The consolidated net profit was Rs. 4,649.49 crore, up from Rs. 3,315 crores in the previous quarter (Q3FY21) and up from Rs. 1,629.86 crore in the previous year (Q4FY20).

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Reflecting a steady performance improvement in both power and revenue generation, the NTPC group generated 314.07 BU (billion units) in 2020-21, compared to 290.19 BU in the previous year earing a  total income of Rs 1,15,546,83, up from the previous year’s Rs 1,12,372,58 crore in 2020-21.

What surprised analysts however was the new ambition shared by NTPC management, on renewables. NTPC has doubled its RE target from 30 GW to an audacious 60 GW by CY32.  Coming soon after it announced it’s 30 GW ambitions last year, the new numbers indicate a major shift in how the power major sees the market changing.

It plans to commission about 13GW of renewable energy capacity by FY24, bringing the total to 15GW.

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NTPC’s current operating RE capacity is 1.35 GW, with 2.9 GW under construction and 3.3 GW in different phases of tendering, according to a few highlights from the earnings call. The company also has a low cost of capital, which facilitate the winning of RE bids.

The company will also participate in 5GW auctions in the future, as well as the CPSU programme. The cumulative RE capacity increase goals for FY22, FY23, and FY24 are 3GW, 8GW, and 15GW, respectively.

In FY21, NVVN (NTPC Vidyut Vyapar Nigam Limited)  transacted 18.5BU (up from 14.5BU in FY20), a 28 per cent increase. It inked an MoU with SDMC to build a 10MW ground-mounted solar facility with charging infrastructure.

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Under the Ultra Mega Renewable Energy Power Park and Central Public Sector Undertaking programmes, Damodar Valley Corporation and NTPC Renewable Energy have signed a memorandum of understanding for the development of floating solar plants and projects in Jharkhand and West Bengal.

As one of the more efficient PSU’s, NTPC has always been entrusted with key initiatives in the power sector, and it was a matter of time before the government turns to it to make a harder push on renewables too. However, while welcome in terms of meeting the larger goals the country has set and needs to achieve, there is also the risk that NTPC, and other energy PSU’s will crowd out private sector participation in the sector, something considered vital till now.