National Hydroelectric Power Corp. (NHPC), the country’s largest hydroelectric power generation company, may diversify into thermal power. “Just because we are present in the hydel power generation, it is not binding on us to remain there. Right now, we are concentrating on the hydel power sector. We may review our operations and go for thermal or geo-thermal power generation,” said S.K. Garg, chairman and managing director, NHPC.
This move of NHPC may bring it into direct competition with NTPC Ltd, another government-owned company whose mainstay is thermal power generation.
However, NTPC has already entered the hydel power generation business. Of the 22,596MW of power generating capacity it plans to add in the next five years, 2,866MW will be hydro-power. The company plans to set up two hydel projects in Arunachal Pradesh.
A senior NTPC executive said that given India’s need for power, there was room for more companies in thermal power generation. “The country needs a lot of power to be added to boost the economy. There is a lot of scope for others to enter the sector and help achieve the generation targets,” added the executive who did not wish to be identified.
It is comparatively easier to set up a thermal power project than a hydroelectric one due to the issues relating to preparation of detailed project report (DPR), relocation and resettlement, and environmental surprises such as floods, all of which delay the latter.
NHPC has an installed capacity of 4,200MW and plans to increase its power generation capacity to 10,000MW by 2012. The company is currently engaged in the construction of 12 projects aggregating a total installed capacity of 5,322MW. It registered a net profit of Rs925 crore in 2006-07 on a turnover of Rs1,963 crore.
A senior power sector analyst based in Mumbai, who did not wish to be identified, said: “NHPC has tremendous project management skills and capability. This will help it when it enters the thermal power generation sector.” However, he said that the company did not have “the core strength to develop thermal projects.”