NTPC Green Energy Limited-An Opportunity

NTPC Green Energy Limited (NTPC GEL) – An Opportunity

During last three years Public Sector Stocks such as Railtel Corporation (RAILTEL), Rail Vikas Nigam Limited (RVNL), Indian Renewable Energy Development Company (IREDA) have shown tremendous performance and gave multifold returns to investors within a very short period. In present scenario energy sector is the hot sector as the Government of India is fully focused on energy sector including solar, wind, hybrid, and storage solutions to align with India’s broader renewable energy goals and will support its ambitious targets of achieving 500 GW of non-fossil fuel-based capacity by 2030. With continued investments and technological advancements, NTPC Green Energy is likely to significantly contribute to India’s journey towards a cleaner and more sustainable energy future.to make India and  PSUs related to energy sector.

Company Overview

• Full Name: NTPC Green Energy Limited
• Parent Company: NTPC Limited
• Incorporation: NTPC Green Energy was established as a subsidiary to manage and expand NTPC’s renewable energy portfolio.
• Headquarters: New Delhi, India
• Industry: Renewable Energy (Solar, Wind, Hybrid, and Energy Storage)
• Website: NTPC Green Energy

1. About the Company – A Public Sector Undertaking (PSU)

NTPC Green Energy Limited (NTPC GEL) is a wholly owned subsidiary of National Thermal Power Corporation Limited (NTPC), a state-owned electricity generation company in India. NTPC Limited is the largest power utility in India, primarily engaged in the generation and distribution of electricity from coal-based power plants. In line with India’s transition towards sustainable energy and a carbon-neutral future, NTPC has launched NTPC Green Energy Limited (NTPC GEL) as part of its strategic pivot to renewable energy.

NTPC Green Energy focuses on the development, implementation, and management of renewable energy projects across India, with a key emphasis on solar, wind, and hybrid power projects. The company is part of NTPC’s broader vision to achieve a cleaner energy mix, reduce the carbon footprint of its operations, and contribute to India’s renewable energy goals.

2. Initiatives by NTPC Green

NTPC Green Energy aims to become a significant player in the renewable energy sector in India and to help NTPC achieve its carbon-neutral goals. The company’s long-term vision is to provide sustainable and clean energy solutions, contributing to India’s energy security and supporting the country’s climate action commitments with the following objectives.

• Development of renewable energy projects (solar, wind, hybrid).
• Transitioning NTPC’s energy mix towards a greater share of green energy.
• Building and operating energy storage solutions to enhance grid stability.
• Supporting India’s ambitious renewable energy targets of 500 GW of non-fossil fuel-based power by 2030.

3. Key Areas of Operation

NTPC Green Energy focuses on the following major areas:

 a) Solar Power

NTPC has undertaken numerous large-scale solar projects across India under NTPC Green Energy. The company develops and operates both ground-mounted and floating solar power plants.

• Solar Capacity: NTPC plans to significantly expand its solar power generation capacity in the coming years. As of 2023, NTPC’s installed solar capacity stands at approximately 2.5 GW, with plans to increase it to 10 GW by 2032.

 b) Wind Power

Wind energy is another key focus area for NTPC Green Energy. The company is involved in setting up large-scale wind farms in India.

• Wind Capacity: NTPC has already developed a capacity of about 1.1 GW in wind energy and is working towards increasing its wind power footprint.

 c) Hybrid Power Projects

NTPC GEL is also focusing on hybrid energy solutions, which combine both solar and wind power to ensure a more reliable and consistent power supply.

• Hybrid Projects: NTPC is developing several hybrid renewable energy projects, combining wind and solar power generation to enhance efficiency and grid stability.

 d) Energy Storage Systems (ESS)

To address the intermittent nature of renewable energy, NTPC Green Energy is exploring and deploying energy storage solutions (such as battery storage) to balance supply and demand effectively.

• Energy Storage Initiatives: The company is collaborating with technology providers to integrate advanced storage systems with renewable generation capacities.

 e) Green Hydrogen

NTPC is also exploring the potential of green hydrogen production using renewable energy. This could be a key element in the company’s plan to decarbonize its operations and diversify its renewable energy offerings.

• Green Hydrogen Projects: NTPC has initiated a pilot project for green hydrogen production at its facility in the country.

4. Strategic Goals and Future Plans

NTPC Green Energy’s growth is cantered around a few key strategic goals:

 a) Aggressive Renewable Capacity Expansion

NTPC aims to expand its renewable energy portfolio significantly in the coming years. As of now, NTPC has announced plans to achieve 60 GW of renewable energy capacity by 2032, which will form a major part of the company’s overall capacity mix.

 b) Carbon Neutrality and Sustainability

As part of India’s Nationally Determined Contributions (NDCs) under the Paris Agreement, NTPC has committed to achieving net-zero emissions by 2070. NTPC Green Energy will play a crucial role in this by significantly increasing its renewable energy capacity.

 c) Partnering with Global Players

NTPC Green Energy is also focusing on collaborations with global and local partners in renewable energy technologies, financing, and operations. The company has signed agreements with various stakeholders, including technology providers and financial institutions, to fund and deploy renewable energy projects.

 d) Investment in Research and Development

The company is investing in R&D, particularly in areas like energy storage technologies, hybrid power plants, and smart grid solutions to ensure the efficient integration of renewable energy into the national grid.

5. Achievements and Milestones

NTPC Green Energy has made significant strides in its renewable energy initiatives:

• Capacity Addition: NTPC has successfully commissioned over 1,500 MW of renewable energy capacity in the last 3-4 years.
• Solar Parks: NTPC has developed several large-scale solar parks, including in states like Rajasthan, Telangana, and Uttar Pradesh.
• Green Energy Procurement: The company has signed long-term power purchase agreements (PPAs) with both public and private sector companies for supplying green energy.
• Recognition: NTPC has received accolades and certifications for its commitment to sustainable energy development, including recognition from international bodies for its green energy projects.

6. Financial Performance

NTPC Green Energy is a subsidiary of NTPC Limited and hence its financials are consolidated with that of the parent company. However, as NTPC transitions towards cleaner energy, NTPC GEL’s contribution to the overall revenue is expected to rise.

• Investments: NTPC has allocated a significant portion of its capital expenditure (CAPEX) for renewable energy projects. It is expected that the subsidiary will attract investment both from domestic and international investors.
• Funding & Loans: NTPC Green Energy has secured funding through various loans and joint ventures to support its projects. The company is working towards reducing its cost of capital through various green financing mechanisms, including green bonds.

7. Challenges

Despite the substantial progress, NTPC Green Energy faces some challenges:

• Grid Infrastructure: The integration of large-scale renewable energy into the national grid requires significant infrastructure investment and regulatory support.
• Land Acquisition: For large solar and wind farms, land acquisition remains a challenge due to land availability and regulatory approvals.
• Intermittency of Renewable Power: The intermittent nature of wind and solar power generation requires effective storage solutions and backup power systems, which increases the cost of development.
• Technology Costs: Although the cost of renewable technologies has fallen in recent years, energy storage and grid stabilization technologies still represent a significant capital cost.

8. List of On-going projects

Here are some ongoing projects of NTPC Green:

• Green Hydrogen Mobility Projects at Leh.
• Auraiya Ground Mounted Solar PV Project: Located in NTPC Auraiya, Uttar Pradesh
• Bilhaur Solar PV Project: Located in Bilhaur (District Kanpur), Uttar Pradesh
• Bhadla Solar PV Project: Located in Bhadla Solar Park, Jodhpur District, Rajasthan
• Mandsaur Solar PV Project: Located in Mandsaur, Madhya Pradesh
• Shambhu Ki Burj: A solar project in Rajasthan
• Bhadla-II: A solar project in Rajasthan
• Bhainsara: A solar project in Rajasthan
• Bhuj Solar: A solar project in Gujarat
• Dayapar- I: A wind project in Gujarat

NTPC Green also has an umbrella company called NGEL, which manages the company’s green business initiatives. NGEL’s goal is to be the leader in NTPC’s green energy journey and achieve the target of 60 GW

Remark

NTPC Green Energy Limited (NTPC GEL) is poised to become a key player in India’s renewable energy sector. By leveraging NTPC’s established infrastructure, expertise in large-scale energy projects, and strategic focus on sustainable development, NTPC GEL is playing a critical role in the country’s energy transition.

The company’s focus on solar, wind, hybrid, and storage solutions aligns with India’s broader renewable energy goals and will support its ambitious targets of achieving 500 GW of non-fossil fuel-based capacity by 2030. With continued investments and technological advancements, NTPC Green Energy is likely to significantly contribute to India’s journey towards a cleaner and more sustainable energy future.

IPO DETAILS

1. NTPC Green Energy IPO Details are Given Below

 

* The total proceeds will be utilized by the company for development.

Note: Some IPOs include an OFS portion (Offer for Sale), where the proceeds raised through the IPO are paid to existing shareholders who are offering their shares to be sold in IPO.

Before subscribing to any IPO, it is important to verify this fact regarding the amount of OFS, as the proceeds raised under OFS are directly paid to the existing shareholders and are not utilized by the company for development.

2. Financials of NTPC Green Energy Limited

Remark:

Net worth of NTPC Green will be increased from Rs.8,189.18 crore to Rs.18,189.18 crore by the amount of IPO Proceeds of Rs.10,000 crores. Accordingly, Debt/ Equity Ratio will also be reduced from 1.91 to almost Zero which is positive for the company.

3. Key Performance Indicators (KPI)

Debt equity ratio is given as 1.91% which will be reduced to almost Zero after receiving the IPO Proceeds of Rs.10,000 crore.

Disclaimer

The content provided on this website is for informational purposes only and should not be construed as professional financial, investment, legal, or tax advice. The information presented on this site is based on the author’s opinions, research, and publicly available information, and is intended for general guidance. It is not a substitute for consulting with a qualified financial advisor or other professional.