The Hindu Business Line : NTPC eyes direct sales to bulk users

NTPC Ltd is planning to unshackle the hegemony of State electricity boards (SEBs) in its customer base and is looking at direct sale of power to bulk consumers. The State-owned company — the country's largest power generator — is targeting at least five to seven per cent sale of electricity directly to industrial consumers over the next five years.

As a step in the direction, NTPC is looking to setting up merchant plants and earmarking unallocated power from its new projects to bulk consumers, either through spot market deals or bilateral arrangements. India Inc can, thereby, buy power from the utility directly without having to go through the SEBs, thereby getting assured quality power, while NTPC, which currently sells its entire generation to SEBs at break-even cost through the power purchase agreements (PPA) route, stands to get better price from industrial consumers.

NTPC, which has an installed capacity of 26,194 MW at present, is planning to expand its generation capacity to about 51,000 MW by the year 2012. "While the tripartite agreement and improvement in cash flow of our customers have helped to keep our collections at 100 per cent level, we are looking at around five to seven per cent sale of energy to bulk customers over the next five years. We are looking at possibilities to identify and initiate work on sizeable amount of merchant power capacity," an NTPC official said.

The implementation of the Electricity Act 2003 had opened up several business opportunities for existing power sector players such as NTPC, including the possibility of direct supply to large customers, retail supply, distribution and power trading. NTPC plans to capitalise on this by widening its customer base to include direct supply to big industrial houses, besides continuing to sell to the various SEBs. The company is already setting up a power plant in Nabinagar in Bihar for supplying power exclusively to the Railways.

As per plans, NTPC plans to sell power directly from the four new hydel projects that it is setting up in Uttaranchal.

NTPC, which currently sells power at an average cost of Rs 1.57 per unit, hopes to get between Rs 5 and Rs 6 per unit from the sale of power from these plants, especially during peak hours.

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