Ministry of Power Signs Pact with Three State-Run Utilities for Augmenting Generation (1)

The Government of India’s Ministry of Power (MoP) signed a Memorandum of Understanding (MoU) with three state-run major power utilities: SJVN, NTPC, and Power Grid Corporation of India Ltd (PGCIL) to increase power generation and transmission capacity.

As per the agreement, SJVN would generate 9,680 million units (MU) of electricity in a year.

Further, the MoU has set SJVN a capital expenditure (CAPEX) target of ₹28.8 billion (~$393 billion) and a turnover target of ₹28 billion (~$382 billion) along with other targets related to operational efficiency and project monitoring.

With an installed generation capacity of 2,016 MW, SJVN has already paid a dividend of ₹8.64 billion (~$117 million) to its shareholders for FY 2019-20 against ₹8.44 billion (~$115 million) paid during the previous financial year.

Recently, SJVN bagged two solar projects: a 100 MW project at Dholera Solar Park and another 100 MW at Raghanesda Solar Park at tariffs of ₹2.80 (~$0.038) /kWh and ₹2.73 (~$0.037)/kWh, respectively.

SJVN is also setting up 13 hydropower projects in Himachal Pradesh, Uttarakhand, Nepal, and Bhutan. It is also developing a 1,320 MW Buxar thermal power project in Bihar.

For  NTPC, the agreement targets 340 billion units (BU) of power. Apart from these, NTPC would also focus on 15 million metric tons of coal production, and the MoU has set ₹210 billion (~$2.8 billion) for its CAPEX, besides ₹980 billion (~$13 billion) of revenue from operations.

Interestingly, NTPC recently said that it was going to refrain from acquiring land for new thermal power projects.

The Power Grid Corporation of India (PGCIL) agreement is related to various parameters such as financial, physical, and project execution.

According to PGCIL, the company and its subsidiaries have transmission lines measuring  164,511 circuit kilometers, 249 sub-stations, and over 414,774 megavolt-ampere of transformation capacity as of August 31, 2020.

PGCIL has been in the center of power transmission network development in India. It recently started the commercial operation of the first leg of the 6 GW Raigarh-Pugalur high voltage direct current transmission project.

The Green Energy Corridor project is a dedicated transmission network for renewable energy, conceptualized by PGCIL in 2011 at a whopping ₹400 billion ($5.8 billion). About 33 GW of renewable capacity addition has been envisioned in the 12th Plan for the eight renewable energy-rich states in the country.

PGCIL is already constructing the inter-state transmission network to connect renewable energy-rich states (Green Corridor-I). The work is underway on Green Corridor-II (for solar parks) which will connect six solar parks in Andhra Pradesh, Madhya Pradesh, Karnataka, Rajasthan, and Gujarat.