To meet the growing demand, the government has announced to continue relying on coal with nearly 80 GW of new coal-fired capacity planned by 2030
Scaling up renewable energy: The allocation to the new and renewable energy sector increased 99 percent to Rs 10,222 crore in 2023 from Rs 956 crore in 2014-15. Between 2013-14 and now, India’s installed pure renewable energy capacity (excluding hydropower) has almost quadrupled to reach 132 GW from 28 GW in 2013-14.
National Green Hydrogen Mission (NGHM): Since renewable energy alone would not be enough to meet India’s energy needs, the central government has attempted to get into new energy sources such as green hydrogen. The Union Cabinet approved the NGHM on January 4, 2023, with an initial outlay of Rs 19,744 crore, including Rs 17,490 crore for incentives. The government’s aim to produce at least 5 MMT of green hydrogen annually by 2030 under the NGHM would require 60-100 GW electrolyser capacity and 125 GW renewable energy.
India’s power sector is regulated by the CERC with an availability-based earnings model (fixed RoE on power generation assets) and, thus, the regulated tariff model provides strong earnings visibility for power-generation companies.
Additionally, with improved coal stocks at thermal power plants, plant availability factor (PAF) has improved and, thus, we expect fixed cost under-recoveries to decline for power companies.
NTPC
- Healthy expansion plans with significant capacities under construction
- NTPC has also entered into a JV for nuclear power generation.
- The PLF of NTPC’s coal stations was 76.40% as against the national average of 68.51%.
- MoU with the Maharashtra government for green hydrogen projects
- NGEL plans for green hydrogen and derivatives (green ammonia, green methanol)
- With renewed focus on RE (130 GW by FY32), we believe re-rating drivers like improving ESG scores
Quick notes on some terms:
PLF - Plant load factors (PLFs)
A cost-plus basis is a way of charging for a product or service where the price includes the cost of production or service plus a profit
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