NTPC to load cheaper power first, plans new despatch schedule
NTPC, India’s largest thermal power producer, is planning a power despatch schedule by which cheaper power will be loaded first.
The move aims to reduce the cost of power for state-owned power distribution companies (discoms) that are facing financial difficulties.
This approach will replace the existing merit order despatch of power, which is based on availability.
Company officials said if cheaper power was made available, the demand would also pick up and states could plan their power supply accordingly. About half of NTPC’s 40.4-Gw coal-based installed capacity, generates power at ~3 or below. The company will be adding a 5,000 Mw coal-based capacity this year.
“The average tariff of NTPC has not increased in the past five years and remained in the range ~3.233.25 per unit. This is despite the cost of coal increasing by 35 per cent during the same period. We have recovered the fixed cost for most of the power plants and thereby plan to pass on the cheaper electricity in an efficient manner across the country,” said a senior official.
NTPC is in discussion with Power Grid Corporation, the central transmission utility, to execute the plan. The company is planning to load cheaper power first into the grid and plan the despatch in accordance with tariffs. It will meet the supply schedule of the states it has signed power purchase agreements (PPAs) with but the source of power will be tariff-based.
Costlier power, left after fulfilling all requirements, will meet the peak demand, which is over and above the contracted capacity.
The move is in line with a recent proposal of the Centre to introduce flexibility in scheduling generation. It provides flexibility in replacing thermal power with renewable power against a given schedule. This will help in the growth of renewable power and grid balancing, the policy envisaged.
NTPC has been reorienting its power supply planning and schedule over the past one year. Business Standard recently reported that NTPC would back down thermal power at some of its units to blend it with renewable energy and sell them together.
Officials said the company had placed a tender to procure 2,000 MW of solar and wind power, which would be blended with non-pithead units, which are far from coal mines.
Last year, NTPC had decided to maximise output per unit by running efficient plants at a higher plant load factor (PLF) and this includes pithead plants.
Plants located more than 500 km from coal mines operate at a lower PLF. NTPC aims to operate them as peaking units as the share of renewable energy increases in the grid.
NTPC registered 6 per cent generation growth in the last financial year with generation touching 265 billion units. The maharatna is now a 50,000-Mw power-generating company running at a PLF of 76.46 per cent (as of April 2018), higher than the national average PLF of 64.9 per cent.