The Hindu Business Line : NHPC eyes carbon trading revenues to boost topline

For the Nimoo Bagzo project, the predicted annual green house gas emission reduction will be 1,80,074 tonnes of carbon dioxide, for the Chutak projects the reduction will be 159,889 tonnes.

Anil Sasi

New Delhi, Aug 25 NHPC Ltd, the country’s largest hydro power generator that is gearing up for a public float in October, is aggressively looking at carbon trading revenue streams to boost topline growth.

While two of its smaller projects – the 45-MW Nimoo Bazgo and the 44-MW Chutak hydroelectric stations in Jammu & Kashmir – have already bagged host country approval, the hydropower major is pursuing CDM registration for its other projects to supplement revenues.

“We have secured benefits from our hydro projects under the CDM scheme in line with the United Nations Framework Convention on Climate Change of 1994. Two of our hydropower projects have already got hosts country approval from the Indian CDM Authority. We are pursuing registration for additional projects and are exploring other carbon trading initiatives, such as voluntary emission reduction, for our projects,” a company official said.

While in case of the Nimoo Bagzo project, the predicted annual green house gas emission reduction will be to the tune of 1,80,074 tonnes of carbon dioxide, for the Chutak projects the reduction will be an estimated 159,889 tonnes. The annual Certified Emission Reductions revenue to be generated from the Nimoo Bazgo and Chutak projects is estimated at Rs 13.58 crore and Rs 12.06 crore respectively.

Under the CDM scheme, an industrialised country that wishes to get credits from a CDM project must obtain the consent of the developing country hosting the project that the project will contribute to sustainable development. Then, using methodologies approved by the CDM Executive Board, the applicant must make the case that the carbon project would not have happened without such benefits, and must establish a baseline estimating the future emissions in absence of the registered project.

The case is then validated by a third party agency, called a Designated Operational Entity, to ensure the project results in real, measurable and long-term emission reductions.

Hydropower projects registered by the CDM Executive Board are eligible to earn CER credits. CER credits can be sold to industrialised countries that are required to meet their green house gas emission reduction targets under the terms of the Kyoto Protocol Treaty of 2005.

NHPC Ltd, which was formerly known as National Hydro Power Corporation, has an installed capacity of 5,200 MW from 13 hydro power plants and plans to increase its generation capacity to 11,000 MW by 2012.

Offer document

The company had filed its offer document with the capital markets regulator, Securities and Exchange Board of India (SEBI), on August 6. Currently, the Centre owns 100 per cent of the company. NHPC has a paid-up capital of Rs 11,500 crore, comprising 1,150 crore equity shares of Rs 10 each.