Thu, Nov 03, 2011 | Source : CNBC-TV18
India is in the midst of a massive power crisis with shortage of coal being cited as one of the key reasons. However, speaking to CNBC-TV18, Arup Roy Choudhury, CMD of state-run power generator NTPC said, things have definitely improved in the last couple of weeks.
The mining space was under severe stress of late with a barrage of issues ranging from political agitation to worker strikes. “We also had the aftereffect of the monsoon season to deal with,” Choudhury said adding. “…but all seems well going forward, and the generations have again picked up.”
NTPC’s plant load factor or PLF is up over 90%, informed Choudhury. He expects power generation to be much better in the third quarter compared to the previous one.
On the issue of imported coal, Choudhury said, it is not a viable option for Indian power producers. “We have to look at power generation through domestic coal,” he stated.
An important government meeting is scheduled today to consider imposing duty on imported power equipment. According to Choudhury, any increase in import duty will be a negative for NTPC. “It will have a direct ramification on power prices,” he added.
Last week, boosted by a better-than-expected top line growth, NTPC posted a 15% rise in net profit at Rs 2,424 crore during the second quarter of the current fiscal.
Below is the edited transcript of Choudhury’s interview with CNBC-TV18. Also watch the accompanying video.
Q: How bad is the coal shortage situation now? Is it a bit better than how it was three weeks back when we were hearing things like companies are working with one week supply or do things remain as difficult as that?
A: Well has definitely improved. If one can see how supply from our stations are growing. We had a critical situation where we had everything coming at one go. We had the Telangana agitation, Coal India’s strike for a day. We also had after effect of heavy monsoon. So that is over now and generations have picked up again. It is looking good at the moment.
Q: Will PLFs go up significantly now?
A: As of now today our PLFs are more than 90%.
Q: Do you see a temporary respite or a durable solution to the raw material issue because these things keep coming back and some of the private producers are still talking about fairly tight supply?
A: I don’t think I should make a bigger comment. But NTPC is a generating company and we have demonstrated time and again that with everything being available we are able to generate at the highest level.
Internationally also we are the number one company in capacity utilisation. But the main fear is coal and I don’t think imported coal is a solution because it increases the cost of power. So we have to look at domestic coal mining and exploit our reserves.
Q: We also hear that the Coal Ministry is almost set to restore the five captive coal block allotments to NTPC in a week but earlier there was a talk of cancellation on ground of delays in development. Have you heard anything on that front?
A: Yes you are right. It is going to get restored any day. We have been given connection for another 8,000 megawatt capacity. We received a letter saying that we will be given captive mines for that. So that improves our position. We will be able to do a majority of our own coal needs through our domestic mining in the next three to four years.
Q: There is an important meeting today in afternoon where the government is meeting to consider imposing duty on imported power equipment. If that comes through how could it affect companies like you who use such equipment? Could it be negative?
A: Well we are driving at reducing the cost of power. One of the important components is fixed cost which goes by cost of imported equipments or equipments. There is already a 15% purchase preference which is being enjoyed by domestic suppliers. Any increase beyond this is only going to load price of electricity.
India is in the midst of a massive power crisis with shortage of coal being cited as one of the key reasons. However, speaking to CNBC-TV18, Arup Roy Choudhury, CMD of state-run power generator NTPC said, things have definitely improved in the last couple of weeks.
The mining space was under severe stress of late with a barrage of issues ranging from political agitation to worker strikes. “We also had the aftereffect of the monsoon season to deal with,” Choudhury said adding. “…but all seems well going forward, and the generations have again picked up.”
NTPC’s plant load factor or PLF is up over 90%, informed Choudhury. He expects power generation to be much better in the third quarter compared to the previous one.
On the issue of imported coal, Choudhury said, it is not a viable option for Indian power producers. “We have to look at power generation through domestic coal,” he stated.
An important government meeting is scheduled today to consider imposing duty on imported power equipment. According to Choudhury, any increase in import duty will be a negative for NTPC. “It will have a direct ramification on power prices,” he added.
Last week, boosted by a better-than-expected top line growth, NTPC posted a 15% rise in net profit at Rs 2,424 crore during the second quarter of the current fiscal.
Below is the edited transcript of Choudhury’s interview with CNBC-TV18. Also watch the accompanying video.
Q: How bad is the coal shortage situation now? Is it a bit better than how it was three weeks back when we were hearing things like companies are working with one week supply or do things remain as difficult as that?
A: Well has definitely improved. If one can see how supply from our stations are growing. We had a critical situation where we had everything coming at one go. We had the Telangana agitation, Coal India’s strike for a day. We also had after effect of heavy monsoon. So that is over now and generations have picked up again. It is looking good at the moment.
Q: Will PLFs go up significantly now?
A: As of now today our PLFs are more than 90%.
Q: Do you see a temporary respite or a durable solution to the raw material issue because these things keep coming back and some of the private producers are still talking about fairly tight supply?
A: I don’t think I should make a bigger comment. But NTPC is a generating company and we have demonstrated time and again that with everything being available we are able to generate at the highest level.
Internationally also we are the number one company in capacity utilisation. But the main fear is coal and I don’t think imported coal is a solution because it increases the cost of power. So we have to look at domestic coal mining and exploit our reserves.
Q: We also hear that the Coal Ministry is almost set to restore the five captive coal block allotments to NTPC in a week but earlier there was a talk of cancellation on ground of delays in development. Have you heard anything on that front?
A: Yes you are right. It is going to get restored any day. We have been given connection for another 8,000 megawatt capacity. We received a letter saying that we will be given captive mines for that. So that improves our position. We will be able to do a majority of our own coal needs through our domestic mining in the next three to four years.
Q: There is an important meeting today in afternoon where the government is meeting to consider imposing duty on imported power equipment. If that comes through how could it affect companies like you who use such equipment? Could it be negative?
A: Well we are driving at reducing the cost of power. One of the important components is fixed cost which goes by cost of imported equipments or equipments. There is already a 15% purchase preference which is being enjoyed by domestic suppliers. Any increase beyond this is only going to load price of electricity.
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