Power India found that National Thermal Power Corporation (NTPC) has almost halved its target of capacity addition for the next five years.
As said by Mr. Arup Roy Choudhury, Chairman, NTPC is now targeting to add around 14 gigawatt (GW) of projects till March 2017 down from the earlier target of 29 GW.
Current capacity of NTPC is around 37.5 GW.
We believe that, the reason behind reducing the capacity addition targets are
- Fuel shortages
- Issues regarding land acquisition for power plants.
- Shortages of coal and natural gas,
- Prolonged bureaucratic processes
- Delays in getting environmental clearances
- Financial health of SEBs
As said by Mr. Choudhury:
"We don't doubt our capabilities to meet the earlier targets but give me the fuel to run the plants. Problems faced in acquiring lands for setting up new plants is no secret either."
Delays in acquiring land also prompted NTPC to go slow on awarding equipment contracts, hurting the company's net profit in the January-March quarter.
State utilities are the main buyers of NTPC's electricity but they have limited resources to purchase more due to mounting losses, currently pegged at about 800 billion rupees. Lower purchases push NTPC to cut its generation.
The cutback in capacity addition is a setback to policy makers in India who are trying to chalk out ways to mitigate coal and natural gas shortages and boost electricity generation in Asia's third-biggest economy.
Mr. Choudhury, however, is hopeful that NTPC will become a 128 GW company by 2032. "Things shall improve in the long run for the power sector. Several government agencies are working to ensure the same."
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