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NTPC to re-tender Rs600 crore contract for wind power plant

NTPC to re-tender Rs600 crore contract for wind power plant
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First Published: Thu, Oct 01 2009. 01 15 AM IST
Updated: Thu, Oct 01 2009. 10 32 AM IST
New Delhi: State-owned NTPC Ltd plans to again ask for bids to farm out a Rs600 crore contract to set up a 100MW wind power project as some firms who placed bids for an earlier tender failed to meet requirements and the utility also wanted greater participation.
“The board has approved re-tendering of the 100MW wind farm package after revisiting the qualifying requirement,” said an NTPC executive who didn’t want to be identified.
Wind power firms Suzlon Energy Ltd and Vestas Wind Technology India Pvt. Ltd had shown interest in the earlier tender. “The tender will be issued shortly, within two to three weeks,” another NTPC executive said on condition of anonymity. The official added that Suzlon and Vestas are still interested.
The wind power project is part of a strategy of NTPC, India’s largest electricity generator, to reduce its dependence on thermal energy. NTPC generates 30,644MW of power and plans to use sources such as wind, hydro, solar, biomass and geo-thermal energy to generate 1,000MW by 2017.
The firm has signed an agreement with the Asian Development Bank for generating 500MW of renewable energy. In addition, NTPC also plans to spend Rs6,000 crore to set up two wind power projects of 500MW each in Karnataka and Maharashtra.
Setting up wind power generation capacity will also help the utility to claim tax breaks for up to 10 years and avail depreciation benefits of up to 80% on investment in the first year of a project’s operation. NTPC turned in a net profit of Rs7,827.40 crore on a revenue of Rs42,182.40 crore in 2008-09 and has cash reserves of Rs44,393 crore.
While a Suzlon spokesperson did not respond to Mint’s queries at the time of going to press, Vestas could not be contacted.
“The reason for NTPC to get into renewable energy generation is to show their concern for environment as a significant portion of their capacity is coal based,” said Madanagopal R., an equity research analyst at Mumbai-based brokerage Centrum Broking Pvt. Ltd. “This size of order in the wind energy space at this time will help companies in the wind energy space such as Suzlon or Vestas.”
India has a wind power generation capacity of around 10,242 MW, which is not even 7% of the total power generation capacity of 1,50,000MW in the country. While it takes a capital investment of Rs4 crore to build generating capacity of 1MW from coal and gas, the same costs around Rs6 crore for wind power.
With the recent renewable energy tariff norms announced by India’s Central Electricity Regulatory Commission, a project developer stands to earn 19% return on investment in new projects.
This will help renewable power firms get higher profits and thus attract increased investment.
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First Published: Thu, Oct 01 2009. 01 15 AM IST