Will NLC power to 20,000 MW by 2025?

M. Ramesh | | Updated on: Jan 09, 2022
One of the lignite mines at the Neyveli Lignite Corporation. Photo: T. Singaravelou

One of the lignite mines at the Neyveli Lignite Corporation. Photo: T. Singaravelou



Capacity additions are in full steam, says Sarat Kumar Acharya, who has been credited with bringing energy into the PSU’s operations

For years, successive Chairmen and Managing Directors of NLC India Ltd (formerly, Neyveli Lignite Corporation) would give high targets for the next three years and then….nothing. Even if they were not to blame personally, things were just not moving at the public sector mining-cum-power company. This point illustrates this: In the 60 years to March 31, 2015, the company had built installed power capacity of 2,750 MW.

Thus, when Sarat Kumar Acharya, who assumed the CMD’s office on October 1, 2015, said last year that NLC would be a 20,000 MW company by 2025, it only evoked sceptic amusement. However, things are finally moving at the company.

In a few months, the company will commission two units of 500 MW in Neyveli, adding 1,000 MW in replacement of an aged 600 MW plant. The net addition of 400 MW could well be a turning point for NLC. Work is under progress for an additional 9,969 MW of capacity, including 1,209 MW of wind and solar, but not counting 3,000 MW of possible acquisitions, for which talks are on.

Has Acharya, an old hand in the power industry who had earlier worked for NTPC and BHEL, managed to ginger up activity at the languid PSU, or has he just been lucky? The answer is probably a mix of both, but many officials of the company say that Acharya brought in energy into the operations.

In the two years up to March 2017, NLC added 1,680 MW of capacity, taking the total to 4,430 MW, or by 60 per cent. Admittedly, part of this addition, at least the two units of 250 MW each of the ticklish ‘CFBC plants’, were long overdue for commissioning.

The ‘circulating fluidised bed combustion’ boilers, unique here in both size (250 MW each) and fuel (lignite) constituted a ‘headache’ unit, with unrelenting teething problems that had no solutions on any shelf. They caused major heartburn between NLC and BHEL, which made the boilers.

“We were made guinea pigs,” said Acharya, in a chat with this correspondent in January. NLC suffered financial damage. But over time, the two plants have stabilised and are now said to be working at 200 MW capacity and even if NLC is yet to gain a complete mastery over CFBC, it is well on the way to doing so — expertise that is likely to stand it in good stead in future. Like his predecessors, Acharya is also sore with BHEL, a former employer of his, but asked if NLC would not sue BHEL for compensation, Acharya only says, “I will not say anything like that.”

Of course, part of the capacity additions that happened during Acharya’s time was inheritance. However, there has been a marked jump in the project pipeline.

Be it bidding out for wind and solar projects, angling for acquisitions or trading any surplus power, there has been noticeable improvement now. The owner of the company, Government of India, will surely be happy — dividend payout increased from ₹470 crore for 2014-15, to ₹1,122 crore for 2016-17. Net profit for the first three quarters of 2017-18, at ₹957 crore, was 10 per cent higher than in the corresponding period of last year. Notably, the last quarter of last year was hugely profitable due to a 55 per cent rise in revenues and a host of tax write-backs.

For one who believes the future of coal (and lignite) is secure for the next 20 years, Acharya has gone in for a major push into renewables. At the beginning of the current financial year, NLC had 41 MW of wind and 140 MW of solar, to which another 500 MW of solar will be added by the end of this year, and 709 MW more in next year.

On the anvil is a proposal to sign a power purchase agreement with the Railways to sell green energy from 1,000 MW capacity — if the agreement materialises, NLC will set up another 1,000 MW of wind and solar.

Data provided by NLC shows that the company counts on a project pipeline of 3,571 MW and a further 3,000 MW of capacity additions through acquisitions to reach 20,971 MW by 2025. Even allowing for slippage, the achievement is very likely to be far closer to the target than previously. In the background of the power capacity additions lie the company’s efforts in securing or opening coal and lignite mines.

NLC wants to try its hand in newer areas. It has started trading “surrendered” power, or electricity that it generated over and above its committed to supply in its schedules for the following day. This way, it would earn ₹220 crore this year. Asked if the company would like to be allowed to sell coal or lignite, Acharya replied “why not?”

But more than these, NLC’s thrust into the future manifests itself in terms of rejuvenated R&D forays.

Acharya speaks of carbon capture and storage and underground coal gasification, but these are for the deep future; for now, the company has two projects whose impact might be felt in the medium term. For instance, an agreement is to be signed any time now with an Australian company called Environmental Clean Technologies, for know-how to make carbon clumps out of lignite that could be used in steel plants in the place of coking coal. Another project is for solar drying of lignite (lignite is mined wet).

The CMD had said in 2011 that the company’s installed power capacity would touch 10,000 MW by 2017; the actual achievement turned out to be 40 per cent of it. But by the current looks of it, Acharya’s target of 20,000 MW by 2025 will see better success. Asked to comment on his personal role, Acharya said he only brought in a “sense of urgency” to his people. “I am perhaps a little restless,” he said.

Published on February 18, 2018
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