India’s leading power producer NTPC Limited has set a goal to diversify its fuel mix in line with the country’s clean energy generation targets. By 2032, non-fossil fuel-based generation capacity will make up nearly 30 per cent of NTPC’s portfolio. In October 2020, NTPC Limited incorporated a wholly owned subsidiary, NTPC Renewable Energy Limited. Overall, 2020 has been a good year in the company’s journey to scale up its renewable portfolio. Starting with a 923 MW tender for solar power issued in December 2019, NTPC issued several large-scale tenders over the year. In February 2020, it floated a tender for 1.2 GW of interstate transmission system (ISTS)-connected solar energy capacity, 1,170 MW of which was awarded in August 2020. In the same month, it tendered 600 MW of ISTS-connected wind capacity. Aside from tendering, NTPC has also won several projects. In November 2020, it won 90 MW of solar projects in Kerala State Electricity Board Limited’s auction for 200 MW of capacity, quoting the lowest tariff bid of Rs 2.97 per kWh. In an interview with Renewable Watch, Mohit Bhargava, executive director, renewable energy, NTPC Limited, spoke about a range of issues, the company’s plans to add renewable capacity, and his vision for renewables. Excerpts…
How has the renewable energy sector evolved over the past decade?
The renewable sector has seen tremendous growth in the past decade. From 17 GW in 2010, we have now reached 89 GW of operational renewable energy capacity. This translates into a compound annual growth rate of nearly 18 per cent. Meanwhile, the power sector as a whole grew by about 8 per cent. Additionally, more than 50 GW of renewable energy projects are either under construction or have been bid out. It is now clearly established that renewable energy, particularly solar photovoltaic (PV), is the cheapest source of power and is well positioned to grow on its own strength.
What is the size of NTPC’s current renewable energy portfolio? How has renewable project development been affected by Covid-19? Are there any new tenders expected from NTPC?
NTPC and its subsidiaries have over 1 GW of operational capacity and another 2.5 GW of capacity under construction. Project execution works were hampered due to the necessary restrictions imposed to contain the spread of the Covid-19 virus. Project activity has now picked up and we are committed to completing our project works within the revised contractual schedule as permitted by the government for all renewable energy projects. Recently we won another 560 MW in two tenders. Further, nearly 4 GW is operational in developer mode and another 2 GW is in the pipeline.
What are some of the key challenges facing the renewable energy sector at present?
Inadequate availability of land and transmission infrastructure remain the key challenges. In the wake of the pandemic, discoms have also been facing issues in releasing payments. This is an evolving sector and some issues will always remain.
What are your views on the investment climate in the renewable energy space?
Renewables are now clearly established as the growth vehicle of the power sector. The strong participation from not just domestic bidders but also foreign players in the recent auctions very clearly indicates the inherent attractiveness of the renewable energy space.
“Renewable energy has enough maturity of its own to sustain growth. It is now enuinely cost competitive and can make its mark in a market scenario.”
What is your perspective on the recent utility-scale tenders for wind and solar? What do you think of the current and future tariff trends?
The recent solar tenders have been heavily oversubscribed, and with every tender, the previous record low has been surpassed. Equipment prices and the rate of financing have been favourable for quite some time and hence, softening of tariffs can be seen. The general consensus is that in due course the rates will go down even further; however, these will be guided by equipment prices, cost of financing and other factors.
What has been your experience with emerging technologies such as floating solar and wind-solar hybrids?
NTPC is the leader in the floating solar space. We have 237 MW of floating solar projects under construction, with another 140 MW under tendering. We have not been very successful with wind so far, but we are keen to fill this gap in our portfolio and are working on wind as well as wind-solar hybrids.
What is your opinion on the current state of transmission infrastructure and the stability of the grid? What will be the trend for energy storage applications in the coming years?
India currently has a transmission capacity of 0.41 million ckt. km, and it is growing at the rate of 5-6 per cent per annum. The grid is well managed at all levels: state, regional and national. The success of the power sector in switching off lights for 9 minutes at 9 p.m. on April 5, 2020 is noteworthy and shows the strength of the grid operator.
But India’s demand and capacity requirements remain huge, so the transmission companies have a large target to achieve. Storage costs remain high, but pumped hydro and batteries offer good buffers in terms of large-scale storage. We expect storage costs to come down in line with various reports, and storage to play an increasingly large role. Green hydrogen promises to be a viable large-scale storage solution in the coming years, whether in gaseous, liquid or chemical compound forms.
“Green hydrogen has huge potential and enormous scope, as it couples with various sectors such as power, mobility, fertilisers, steel, chemicals, marine and aviation. Going forward, we are looking at green hydrogen becoming a big part of our renewables portfolio.”
What do you think is the potential and scope for green hydrogen in India? What are the new initiatives you expect in this space?
I think the world has started realising that the answer to the challenges in renewable energy integration, large-scale storage and elimination of fossil fuels could be green hydrogen. Green hydrogen has huge potential and enormous scope, as it couples with various sectors such as power, mobility (including bus, train, trucks and cars), fertilisers, steel, chemicals, marine, and aviation. There are an estimated 30 million cars on Indian roads, with an aggregate capacity of 1,500 GW in terms of engine power, which far exceeds the power generation capacity of 430 GW. So, mobility offers huge potential and scale as far as economical adoption of green hydrogen is concerned.
At NTPC, we are working on pilot projects with green hydrogen for fuel cell buses and cars, pilot projects on the production of green methanol, projects to introduce fuel cell-based trains on select routes, and so on. Projects to blend a small fraction of hydrogen in city gas networks under stringent testing conditions may also emerge. There also exists a possibility of manufacturing green ammonia using green hydrogen and then using it to replace natural gas-based ammonia for fertiliser production. Going forward, we are looking at green hydrogen becoming a big part of our renewables portfolio.
What is your vision for the renewable energy sector in the future?
The renewable energy sector is the future, and the low prices quoted in recent bids show the maturity of the sector. With the recent policy amendments, round-the-clock tenders can also become a promising option, which clearly supports NTPC’s decision to not go for any greenfield coal-based projects in the future. We strongly feel that renewable energy has enough maturity of its own to sustain growth. It is also time to move away from power purchase agreement-based growth in this sector. It is now genuinely cost competitive and can make its mark in a market scenario. The growth momentum in the renewable energy space clearly shows that the ambitious target of 450 GW by 2030 is very much achievable. A new entrant in the space is green hydrogen, which can support other sectors with surplus renewable energy power during the day, a few years from now.