NLC India Aims to Invest Rs 24,000 Crore in Renewable Energy Projects by 2030, Says CMD M Prasanna Kumar – EQ Mag

Prasanna Kumar Motupalli, chairman and managing director of the central PSE, gives an outline of the company’s growth trajectory in an interview with Manish Gupta.

State-run NLC India Ltd (formerly Neyveli Lignite), is setting up its first coal-based supercritical power plant in Uttar Pradesh and India’s first lignite-based power unit in Tamil Nadu. It has also firmed up plans to set up 6 gigawatt (GW) of renewable energy capacity with an investment of Rs 24,000 crore by 2030. Prasanna Kumar Motupalli, chairman and managing director of the central PSE, gives an outline of the company’s growth trajectory in an interview with Manish Gupta. Excerpts:

How was NLCIL’s performance, in physical and financial terms, in FY23?

In FY23, we generated power at an all-time high of 30 billion units (BU), of which 2.25 BU is green power. We have become carbon-neutral in mining operations as our power requirement for mining operations is 1.25 BU whereas we are generating green power of 2.25 BU.

In FY23, we also achieved highest ever coal production of 10 million metric tonne (MT). Last fiscal, we awarded 300 MW solar plant at Barsingsar in Rajasthan. As on date, we have 50 million metric tonne mining capacity, 30 MT of lignite and 20 MT of coal. We want to take it forward to 80 MT by 2030.

We achieved capex of Rs 3,308 crore as against a target of Rs 2,920 crore. Our topline was at record Rs 16,165 crore and our bottomline was Rs 1,426 crore.

What are the targets for FY24?

We seek to sustain the pace of growth in FY24. We recently commissioned a 10 MW solar unit in the Neyveli township in the ongoing efforts to make it a smart city. Out of that 10 MW, we are envisaging 4 MW for hydrogen generation. A 300 MW project Rajasthan in FY24 with an investment of Rs 1,800 crore is set to be completed. Coal extraction activities at Pachwara south block in Jharkhand will start by January-February. It has a peak rated capacity of 9 MMT per annum.

We also intend to award 3×800 MW ultra super critical units at Talabira as a pithead station with Talabira mine in Odisha. There is also a target to award 2×660 MW super critical lignite based power plant at Neyveli, which will be the first of its kind in the country.

As on date there is no super critical boiler for lignite. We want to complete 200 MW solar capacity addition under CPSU scheme. The new green subsidiary, NLC India Renewables Ltd (NIRL) will likely increase the competitiveness in the bidding for such RE projects.

FE: What is the capex plan for this fiscal and beyond?

NLC: As we target to be a 17 GW company by 2030, out of which 11 GW thermal and 6+ GW will be in the renewables. The capex requirement for this capacity addition is around Rs 75,000 crore, around Rs 24,000 crore for the renewable energy and around Rs 50,000 crore for the thermal capacity. We are also aggressively moving ahead for lignite-to-methanol project. We plan to award the project in current financial year.

We require to make Rs 20,000 crore equity investments under the capex plan. As on date, the profit is more than Rs 1,400 crore and with the commissioning of our new project at Ghatampur in Uttar Pradesh, this will be feasible. The plan is to commission 3 x 660 MW super critical boilers at Ghatampur in the current financial year. With addition of operation of these three units and operation of our solar capacity in the coming years, the bottomline will increase. Internal resources are enough to raise the funds.

FE: How do you plan to raise the balance Rs 55,000 crore?

NLC: As NLCIL is a triple A star rating company, we will not have any problem in raising the debt. Recently, we could raise funds at a low of 7.25%. As on date, the funds are being raised as loans. Bonds and debentures are also under consideration. In the current financial year, the capex requirement for n Gujarat and Rajasthan projects are finalised. We have already tied up Rs 1,000 crore loan recently and raised Rs 500 crore at the start of the fiscal.

FE: What is the status of lignite-to-methanol plant in Neyveli?

NLC: As on date, this project is ahead of all the gasification projects that are going on in the country. We have already finalised the technology provider. Four parties are interested in participating in the bidding — Petrofac, L&T, Thermax and Mega Engineering. They are very much interested to participate in tendering. We are hopeful that we will be concluding this tender in next two months. By September-October, we will be able to award this contract. The estimated capex requirement for this is around Rs 4,500 crore. There’s a good market for methanol in pharmaceutical and auto industries.

FE: What are the plans of NLC India Renewables Ltd?

NLC: As on date, we have renewable projects worth Rs 6,000 crore in operation. This will be a 6,000+ MW RE company by 2030 for which Rs 24,000 crore capex is required. Recently, we won 300 MW capacity at Khavda solar park in Gujarat, and are going to get another 300 MW in green-shoe option. It is also participating in solar park in Rajasthan for 810 MW, and more capacities are on the anvil in Uttar Pradesh also. We are in touch with UP government for land on lease, so that we can install around 800 MW solar capacity in UP.