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NTPC Ltd
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Good morning, ladies and gentlemen. Welcome to the NTPC Limited Q2 FY '22 Earnings Conference Call, hosted by DAM Capital Advisors. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Mohit Kumar from DAM Capital Advisors. Thank you, and over to you, sir.
Thank you, Liza. On behalf of DAM Capital, I welcome you all to the Q2 FY '22 earnings conference call of NTPC. We have with us from the senior management of NTPC, Director of Finance, Mr. A.K. Gautam; Director of Human Resources, Mr. Dillip Kumar Patel; Mr. Ramesh Babu, Director of Operations; Mr. Chandan Kumar Mondol, Director of Commercial; and Mr. Ujjwal Kanti Bhattacharya, Director of Projects. Without further ado, I will now hand over the call to Mr. Gautam and we request you to introduce the management team, followed by your opening remarks and the Q&A session. Over to you, sir.
Thank you. Thank you, Mohit. A very good morning to everybody. First of all, apologies for being slightly late. I, A.K. Gautam, Director of Finance, welcome all of you to the Q2 FY '22 concall of NTPC Limited. I have with me, Sri Dillip Kumar Patel, Director of Human Resources; Sri Ramesh Babu, Director of Operations; Sri Ujjwal Kanti Bhattacharya, Director of Projects. I have also with me the other team members of NTPC. The company had announced the unaudited financial results for the second quarter and half year of FY '22 on 28th October 2021. The key performance highlights for the quarter and half year ended 30th September 2021 have already been disclosed on both the stock exchanges. Now I will touch upon operational highlights for Q2 and H1 of FY '22. NTPC stand-alone gross generation in Q2 FY '22 is 74.81 billion units. H1 FY '22 is 146.56 billion units as compared to 67.67 billion units and 127.86 billion units in the corresponding previous period, registering an increase of 10.55% and 14.63%, respectively. Gross generation of NTPC Group in Q2 FY '22, is 19.97 billion units and in H1 FY '22 is 176.78 billion units as compared to 77.93 billion units and 145.88 billion units in the corresponding previous period, registering an increase of 16.74% and 21.19%, respectively. In H1 FY '22, we have added 2,160-megawatt to our commercial capacity, comprising 800-megawatt at a Darlipalli, 660-megawatt at Tanda, 15-megawatt solar capacity at Bilhaur, 25-megawatt floating solar capacity at Simhadri and 660-megawatt at Nabinagar. With this, the commercial capacity of NTPC has become 53,225-megawatt on stand-alone basis and 66,650-megawatt for the group as on 30th September 2021. NTPC Group has already commissioned 1,390 megawatt of -- projects under EPC mode. 3,017 megawatt of solar projects, including ongoing projects of NTPC Renewable Energy Limited are presently under implementation. 3,365-megawatt capacity has been born through tariff-based competitive bidding, for which power purchase agreements are yet to be signed. In addition, 3,100-megawatt capacity is under [ pending ].For H1 FY '22, three coal stations of NTPC were among the top 10 performing stations in the country in terms of PLF. Korba station was ranked 1st, with PLF of 92.88%, followed by Darlipalli with 88.28%, and Sipat with 88.11% PLF. During H1 FY '22, PLF of coal stations of NTPC was 69.63% as against the national average of 67.70%, thereby maintaining a spread of almost 12%. During the period, we have suffered losses due to grid restrictions and fuel supply. The generation loss due to grid restrictions in the whole base stations was 36.82 billion units in H1 FY '22 as compared to 61.19 billion units in H1 FY '21. For the gas-based situation, the loss was 14.99 billion units in H1 FY '22 as compared to 12.33 billion units in H1 FY '21. The generation loss on account of fuel supply constraints was 3.43 billion units for H1 FY '22. Now I will touch upon the status of grid supply. During the H1 FY '22, metallization of coal against ACQ was 94.14% as against 87.43% in H1 FY '21. Coal supply during H1 FY '22 was 90.08 million metric tonne comprising of 89.20 million metric tonne of domestic coal and 0.88 MMT of imported coal. The coal supply during the corresponding previous period was 78.75 million metric tonnes, with 78.40 million metric tonne of domestic coal and 0.35 million metric tonne of imported coal. NTPC has achieved a total coal production of 5.54 million metric tonnes during H1 FY '22. H1 '21 was 4.46 million metric tonne. Cumulatively, 37.90 million metric tonne of coal has been excavated from Pakri Barwadih, Dulanga and Talaipalli coal mines until 30th September 2021. Cumulative expenditure of INR [ 7,500.45 ] crore has been incurred on the development of coal mines still at 30th September 2021. NTPC has become the first energy company in India to declare its energy compact goals as part of new and high level dialogue on energy. NTPC has set a target to install 60 gigawatts of renewable energy capacity by 2032. NTPC is also aiming a 10% reduction in net energy intensity by 2030. Further, NTPC has declared that it will form at least two international alliances groups to facilitate clean energy research and promote sustainability in energy value chain by 2025. During H1 FY '22, NTPC has commissioned India's largest floating solar project of 25-megawatt FSP at Simhadri. During H1 FY '22, NTPC Renewable Energy Limited has won 775-megawatt capacity under various competitive bids, comprising of 105 megawatt at the rate of INR 2.35 kilowatt per hour -- kilowatt hour and 220-megawatt at a rate INR 2.33 kilowatt hour in [indiscernible], Shajapur Solar Park and 450-megawatt, average INR 2.34 in [indiscernible] hybrid center. During H1 FY '22, NTPC has won 1,990 megawatt in ANR CPSU scheme to tranche 3 at the rate of INR 44.95 lakh per megawatt of VGS with a tariff of INR 2.45 per kilowatt hour. This capacity will enable reduction of over 3 million tonnes of CO2 every year. NTPC was the single largest capacity winner. And together with this capacity, NTPC and NTPC Renewable Energy Limited now has over 6.3-gigawatt capacity won through competitive biddings. This shall pave the way for NTPC plan for attaining 60 gigawatt earning capacity by 2032. Further, the CPSU scheme shall also promote [indiscernible] since projects help to necessarily use domestic content. NTPC Renewable Energy Limited signed the MOU, with Union Territory of Ladakh to set up country's first green hydrogen mobility project in the region. The MOU will enable NTPC to help Ladakh develop a carbon-free economy based on renewable sources and green hydrogen. NTPC has planned to supply [ 5 hydrogen buses ] to start with the leap in the region and probably will be setting up a solar plant and a green hydrogen generation unit in late -- towards this end. This will put Leh as the first city in the country to implement a green hydrogen-based mobility project. This would be [ geovation ] mobility in true sense. NTPC has become signatory to the prestigious UN Global Compact's CEO Water Mandate, joining a [ record league ] for companies that focus on efficient water management and recognizes the ever-growing importance of water stewardship and have working -- have been working to conserve this precious nature resource -- natural resource. NTPC have already taken a series of majors across each plant's location on sound water management. NTPC will further invite the 3Rs: reduce, reuse, recycle, for water conservation and management while carrying out its core business activity of power generation. The CEO Water Mandate is a UN Global Compact initiative to demonstrate commitment and efforts of companies to better their water and sanitation agendas as part of long-term sustainable development goals. NTPC signed an MOU with Uganda Electricity Generation Company Limited, a government of Uganda company for cooperation in power sector. NTPC has signed a MOU for cooperation in overseas power sector with rights in [ NHPC ] for taking up infrastructure-related projects, power development and capacity building O&M, RMU and consultancy assignments outside India. Environmental management, the company has taken following initiatives for preserving environment. Flue Gas Desulphurization systems are under various stages of implementation for 63.86-gigawatt of group capacity. FGD systems have already been commissioned for 1,340-megawatt capacity. FGD system package for 59.94-gigawatt capacity are under implementation and FGD system packages for 2.58-gigawatt capacity are under various stages of pending.For compliance with NOx control, combustion modification has already been implemented at 25 units to 11.55 gigawatts of thermal capacity. Supply and installation of low NOx combustion system for 10 gigawatt of capacity is under implementation. However, for DeNox system, package for 42.61 gigawatt are under process. Now I will touch upon the financial highlights for the H1 and Q1 of FY '22. Gross sales for Q2 FY '22 is INR 28,148.52 crore as against corresponding quarter of previous year gross sales of INR 24,617.54 crore, adjusting an increase of 14.34%. On a half year basis, there is an increase of 12.74% in the gross sales, that is from INR 48,033.77 crore in H1 FY '21 to INR 54,155.63 crore in H1 FY '22. Total income for Q2 FY '22 is INR 29,273 crore as against corresponding quarter of previous year. Total income of INR 26,023.33 crore, registering an increase of 12.49%. On a half year basis, there is an increase of 12.05% in the total income, that is from INR 50,044.33 crore in H1 FY '21 to INR 56,075.25 crore in H1 FY '22. Profit before tax for Q2 FY '22 is INR 3,730.50 crore as against INR 3,666.93 crore in the corresponding quarter of the previous year. On half year basis, profit before tax is INR 7,269.26 crore as against INR 6,564.72 crore in H1 FY '21, registering an increase of 10.73%. Profit after tax for Q2 FY '22 is INR 3,211.91 crore as against INR 3,504.80 crore in the corresponding quarter of the previous year. On half year basis, PAT is INR 6,357.54 crore as against INR 5,974.96 crore in H1 FY '21, registering an increase of 6.40%. Total income of the group for H1 FY '22 is INR 63,486.27 crore as against corresponding period of previous year total income of INR 55,472.32 crore, registering an increase of 14.45%. Profit after tax of the group for H2 FY '22 is INR 7,134.67 crore as against INR 6,443.55 crore in the corresponding period of the previous year, registering an increase of 10.73%. During the H1 FY '22, we have accounted dividend income of INR 736.73 crore from our subsidies and joint venture companies as against INR 556.73 crore received during H1 FY '21. Now I will put an update on various other financial activities. The total regulated equity as on 30th September 2021, was INR 67,823.61 crore. Now on mobilization. NTPC has issued the bonds aggregating to INR 6,996 crore during H1 FY '22. These includes INR 3,996 crore at the rate of 6.87% on 20th April 2021 for a period of 15 years. Another INR 3,000 crore have been issued at the rate of 6.69% on 30th September 2021 for a period of 10 years. Average cost of borrowing for H1 FY '22 is 5.96% as compared to 6.37% in H1 FY '21. NTPC Renewable Energy Limited has signed working capital facility of INR 505 crore with Bank of Baroda, and signed its first green term loan agreement of INR 500 crore at a very competitive rate with the Bank of India for its 470-megawatt solar projects in Rajasthan and 200 megawatt solar projects in Gujarat. Now an update regarding CapEx. In H1 FY '22, we have incurred a group CapEx of INR 15,137.67 crore as compared to INR 12,983.14 crore in the previous period. The capital outlay for FY '22 on a stand-alone basis has been estimated at INR 23,736 crore for NTPC. Now I will briefly touch upon some of NTPC Group companies. NVVN, our trading subsidiary, transacted 11.98 billion units during H1 FY '22 as against 8.29 billion units during H1 FY '22, registering a growth of 44.51%. NVVN has signed an MOU with Tirumala Tirupati Devasthanams for setting up of solar projects, 5-megawatt ground-mounted and 2-megawatt roof to solar. Airport Authority of India has authorized NTPC with the [indiscernible] for setting up total 45-megawatt of solar rooftop ground-mounted solar capacity is spread over its 44 different airports under RESCO CapEx mode. NTPC continues to win laurels and awards in various fields. Major awards received in H1 FY '22 are as follows: NTPC has received PSU award for the year 2020 and roll of honors from Dalal Street Investment Journal in the category of Maharatna of the Year and the most efficient and profitable Maharatna of the Year manufacturing in recognition and appreciation of the contribution made in the year 2020. NTPC has been recognized as a great place to work for the 15th year in a row by Great Place to Work Institute. NTPC is the only PSU to consistently feature in India's top 50 best workplaces. This year, NTPC ranked 30th up from 47th position last year. NTPC has featured among the LinkedIn's Top Companies 2021, India. In recognition of the digitization effort, NTPC has been huge for digital PSU award in Maharatna category, in sales PSU Award 2021. NTPC has received Dun & Bradstreet India's top PSU award 2021. NTPC has received the Champion of Champions trophy for NTPC Corporate Communications under various categories at the 15th Global Communication Conclave organized by Public Relations Council of India. These were some of the highlights I wanted to share before we begin the question-and-answer session. Thank you.
Should we open up for questions?
Yes.
[Operator Instructions] The first question is from the line of Apoorva Bahadur from Investec.
Congratulations on a good set of numbers. Sir, I wanted to understand this upcoming MBED implementation. What sort of impact do you see of this on NTPC? And how much would you see as a fair brokerage to be paid -- to be exchanged for the power distribution [indiscernible]?
I'll ask [indiscernible] commercial person to answer this question, please. [indiscernible]?
As far as this MBED current speculation that is proposed to be implemented, we probably will not be affected in any way because capacity charges are protected through the bilateral contract settlement mechanism. Similarly, the energy service would also be at the energy charges as per the regulated tariff. We don't foresee any impact due to implementation on our regulated plans.
Sir, and [indiscernible] will be payable to the exchange on whichever exchanges power schedule. Any update on that?
You're asking about the trade margin that...
Yes, sir.
We are not aware. I think this is being deliberated in the ministry or regulatory level. We aren't aware of any changes that the trading margin for power exchanges are being contemplated or not.
Okay. Got it, sir. Sir, secondly, if you could share some of your insights around, say, space, again, looking to sign thermal PPAs given the current shortage, which we witnessed. So is there any discussions around that? Or any update on our plans, which were due for thermal PPAs?
Can you repeat?
Basically, new thermal capacity?
I'm Ujjwal Bhattacharya, let me answer this. We are in discussion with government of Orissa for 2 infrastructure 660-megawatt power project that [indiscernible] very next to our own [indiscernible] thermal power project. This is what is at the very advanced stage of negotiation. PPA has already been signed with GRIDCO and other beneficiaries earlier.
Okay, okay. Sir, just a couple of bookkeeping questions. If you could help us with the fixed cost under recovery PLF incentive and the surcharge income for the quarter? Or any other one-offs if it were there?
Fixed charges under recoveries is around just INR 55 crores in the half year and INR 22 crores in the quarter. It is not much. This is variation. For the figures, if you want the exact figures, they are INR 441 crores in the April to September half year as against INR 497 crores in the corresponding half year of the previous year. If you want for the quarter, during the current quarter, it is INR 249 crores as against INR 271 crores in the corresponding quarter of the previous year.
This was the PLF incentive?
Pardon?
Yes.
Yes. Incentive in the current half year is INR 236 crores as against INR 279 crores in the corresponding half year of the previous year. For the quarter, it is INR 66 crore as against INR 137 crores in the corresponding quarter of the previous year.
Okay. Sir, just one last question, if I may. I mean are there any other one-offs which was there during the quarter?
During the quarter, there are no one-offs. If you see, there is a reduction in surcharge by about -- around 600 -- INR 711 crores in the half year as compared to INR 500 crores in the quarter variation.
We'll move on to the next question. That is from the line of Puneet from HSBC.
Just a bit of clarification on this reduction in surcharge. This INR 711 crores, is this surcharge income? Or is it the reduction versus the previous half?
It is a reduction previous -- versus previous half. If you want absolute numbers, in the half year, April to September '21, it is INR 420 crores as against INR 1,130 crores in the corresponding half of the previous year.
And for the quarter?
And for this quarter, it is INR 755 crores versus INR 657 crores in the corresponding quarter of the previous year.
Okay. And this is largely a function of what? The change in the percentage and also...
Combination of change in percentage. And more really, it is dependent because most of the money we have realized in the current half year and quarter.
Understood. And what was that number for INR 249 crores, which you said for fixed charge and the recovery?
Fixed charge and the recovery, I told, for the half year -- current half year, it is INR 441 crores as compared to INR 497 crores in the corresponding half of the previous year. Quarter, it is -- current quarter, INR 249 crores versus INR 271 crores in the corresponding quarter of the previous year.
And why is this fixed charge in the recoveries -- what plans have contributed to this?
That one detail, you may obtain from [indiscernible].
Okay. My second question is largely, do you foresee any such under recovery to continue on account of coal shortage in the current quarter as well? Or have things normalized for NTPC?
We expect that whatever is this incentive, we have accounted in H2. We expect in the quarter. We expect that by the year-end, most of this will be recovered.
Okay, okay. Excellent.
Yes, it will be minimal. These are mainly -- these have occurred mainly because of extended overhauls at some of our stations due to COVID.
Okay.
And sir -- I'm Director, Operations.
Yes, yes. Please, please.
Due to coal assets, there will not be any standard recovery. We have still maintained a 69% PLF as in the last quarter. We have touched more than a [ billion ] generation on the month of days. As our Director of Finance has said, as of now, the coal portion has become normal and the coal stocks are improving in a daily basis. We won't [ forfeit ] a loss in the ratio. And for the under recovery, due to the extended rollout already approved in the CRC for the [indiscernible]. And so at the end of the year, all this will be recovered.
Understood. And the Delhi PPA, which was to be relinquished, any plan? What's happening there?
[ Ajay ], would you just comment on this?
Yes. Delay discounts have written to us for relinquishment of the PPA. But the MOP policy that the government of India has issued in March '21 provides that they have to approach the regulatory commission. And once the regulatory commission, following the due process, checking the resource adequacy and the adequacy of our availability, then they will permit them to relinquish. And then after 6 months, that becomes applicable. So we understand that they have approached the DRC for relinquishment of power from Dadri.
Have you moved to tie this up with something else? Or we're waiting for the process to complete?
We are waiting for the process to complete.
That's very helpful. My last question is on the...
Only one certain request from the DISCOM seeking to reallocate, get this power reallocated to them. This relinquish, whatever is proposed to be relinquished some of the discounts have approached to get that reallocated to them.
Okay. That's super. And lastly, now that you have a separate renewable subsidiary, you already have some bit of experience with you. Is there a thought process to increase the aggression in winning new bids? Or should we expect status for renewable projects?
Yes. Mohit.
I think that's really subjective question you're asking. I don't know what it actually means. I think we have been fairly aggressive in winning the risk. So it has to be a call based on the overall picture, though we are making money.
The next question is from the line of Aniket Mittal from [ SBI Mutual Fund ].
My first question is on the renewable front. I think we've got a 6.3-gigawatt pipeline right now under construction. So if you could help me with the time line in terms of how does this 6.3 gigawatts phase out over the next few years?
Out of the 6.3 gigawatt, close 3 gigawatt is under construction and -- which we go to take in the next 18 months or so. In fact, we already started commissioning part of that. Some of it got commissioned and started as well. There's another 3.5 gigawatts, bulk of it is under CPSU scheme in which the time line given is about [ 31 ] and another 1.5 gigawatts is likely to be commissioned by '24.
So by '24, you would essentially become a 7-gigawatt annualized portfolio?
Yes. I mean, if we account it, there's a lot.
And in terms of our outlook, what are the sort of capacities beyond this that we're looking to add or win over the next 2 years?
No. Beyond this also, the bid process is continuing. And we're also looking at other options of setting up capacity. Because now as we would have seen that there is other option by the government also by going to the exchange or tying up to the industrial customers. So all those are all fine.
Understood. My next question was actually something that an earlier participant touched on, this 25-year PPA reallocation. So apart from Delhi, we've actually seen some of the other states also looking to reallocate from the gas-based power plants, particularly the likes of, I think, Rajasthan and Punjab have been looking to do that. And in the midst of all of this is also the MBED that's coming in. So I just wanted your understanding based on your discussion with the ministry and the DISCOMs, how are things shaping up on that front, let's say, 4 years, 5 years down the line? Do you see risk costs some of these gas-based power plants being untied in nature?
Yes. [ Ajay ]? Actually, there are 3, 4 questions in it. [ Ajay ], can you please answer one by one?
Even from gas stations, some of the beneficiaries have gone to their regulator for relinquishment of power from gas station processes on with the regulator. And on the MBED front, probably if we believe that whatever capacity is relinquished under the MOC effect is relinquished would get reallocated seeing the demand of power that has been recently. Other discounts may come forward for getting this reallocated. And in any case, some of it is still left out, probably then the MBED mechanism would take care of that and we'll be able to recover our costs from them.
Okay. Okay. So it's largely still being deliberated is what I understand with the MoP.
Yes.
And just one last question on the thermal front. So if I have a look right now, I think we have around 11 gigawatt of thermal capacity is under construction. Let's say to it, it's around 12, 12.2. It should come in, I believe, in the next 3 or 4 years, right? So beyond -- if I were to take a call beyond FY '24, FY '25, what sort of growth do you think can actually come in terms of capacity addition for thermal? Because if your capacities were to come after '24, '25, we've got to start [indiscernible] the next couple of years. Some sort of view on that would be very helpful.
[indiscernible].
Yes. As you aware that we are already working on almost 12,000 megawatt of capacity, which are at the various stages of construction and commissioning. This year, we have kept a target of commissioning 5,382 megawatt. And these are mostly thermal and with some amount of solar. Next year, we have a target of 6,507 megawatt; and 2023, '24, 3,224; and '24, '25, 2,900. These are based on that projects which are already under construction. As I have already told you, the stature being seriously negotiated, but we'll also keep an option that as we have committed to public decarbonization. We are being very careful and cautious about adding any kind of different kinds of deal options. We are giving a lot of trust on the renewables, but we are [ not tying ] some thermal as such, depending on the country's requirement and which way the world opinion moves. You must have noted that India has not committed anything so far above '26 regarding net-zero. We are also waiting for the government policy in this regard.We have 7 other thermal projects at different stages of FR. It is with the report and on the drawing boards depending on the country's requirement and as much as our strategy has improved progressive decarbonization. We work on them.
[Operator Instructions] The next question is from the line of Deepesh Agarwal from UTI AMC.
My first question is to understand the time line for the appointment of independent directors. It seems the existing independent directors have retired. So what is the thought on increasing the proportion of independent director?
Actually, in case of government companies, independent directors are appointed by the government of India. We understand that the Ministry of Power has already forwarded appointment of some of the independent directors. And that is pending with the other branch of the government of India, and we expect that this will be cleared soon.
Okay. Second question is, since you have not won a recent distribution license bid, so what is the thought process? Or what are the future bidding pipelines out there? And secondly, if you can also touch upon the expiration on the EV charging business?
I'm DK Patel. Actually, we are looking for different options. Secondly, we want that to have submitted our bid for both the -- as well as the [ GPN annex ]. But we're looking for various options where -- and searching for whatever there is feasibility, it depends, we'll go for distribution business. Thank you.
Okay. And on EV charging?
Recharging also, EV charging.
Yes.
Yes. Mohit [indiscernible] on the exit.
Yes. So on the EV charging side, this is being handled by our subsidiary, NTPC Vidyut Vyapar Nigam. We already have, as on date, about 140 public charging stations operational across various cities. We've also been allocated another 200 charging stations across cities under the same scheme. So these are in pipeline over the next 1.5 years. Beyond that, we're also supplying chargers along with the box services wherever we are providing, but that's an on demand.
[Foreign Language]
Pardon?
Sorry, I guess there was some disturbance from someone else on the line.
Yes. Okay. So I think this Mumbai, Pune EV also...
Yes. Yes. And apart from that, we are also looking at putting up chargers on highways, and we have already submitted a bid for one of the highways, Mumbai.
Okay. And last, bookkeeping question. Can you help us with the gross block of the operational renewable portfolio? And what is the EBITDA from this?
I think this -- will give you separately these figures.
The next question is from the line of Ajinkya Bhat from Macquarie.
So two questions from my side. Number one, we recently read in media articles that you have issued an expression of interest for getting 15 gigawatts [ of capacity from the ] modules, domestically manufactured modules over the course of next few years. So if you could just highlight, so what is the thought process around it? Is it mainly to secure reliable supply? Or do you expect material cost advantages against imported modules going down the line? If you could throw some light on that.
So yes, we have done that. I think you already answered the question yourself because that's exactly the intent that we need to not only tie up on a long-term basis, we have a better visibility as we are bidding for various projects. And it will also help us take care of new issues regarding volatility and all those things, so that basically.
Okay. Any time lines on when do you think you would issue this kind of tender? And then would more such tenders be issued in the future, considering that you have a very large ambition, and right now, it's only 15 gigawatts of tenders that you are issuing?
So I think we need to also look at 15 gigawatt will broadly cater for about next 3 years or so. So if we do anything beyond that right now, it doesn't make sense because nobody is willing to give a much longer -- some of our contractors. So it has to be done on a regular basis. But right now, this is what we think.
Okay. Okay. And second question is if you could just talk about a little bit about your broader energy transition strategy. I see that beyond renewables, you have several pilot projects going on, right? There is carbon dioxide to methanol with L&T, there is hybrid and production [ bid technique ]. And there is 1 gigawatt hour of battery storage center, which has been issued. Now my question is, is the thought process that if you are able to commercialize all these assets, could the existing thermal project of NTPC be shielded from any sort of thermal PPA relinquishment from discount? Because then you can basically repurpose those projects to produce hydrogen or methanol and essentially, supply energy in alternate form to a different set of customers. Is that the focus this year?
I'll answer the specific question on CO2 to methanol. As you have rightly [ covered ] that we have already started actual implementation of the CO2 to ethanol project in one of our projects. And we expect to get the project on stream by December '22, that is our target. Now this is an R&D project going from lab to the land at the prototype level. And we will be trying to reduce the cost of the methanol. We are also experimenting with using the same methanol for refining in our boiler in place of LDO.That has two purposes. First of all, we can go for carbon capturing to reduce the carbon footprint from our coal-fired power stations. At the same time, we'll update the requirement of LDO and reuse our own CO2 converted through green hydrogen into LDO equivalent of things. Now going forward, if methanol becomes successful and we can reduce the prices, methanol can use progressively more into border firing for which we are also discussing with manufacturers like [indiscernible] and others to get into further results more into it. We are also in touch with worldwide institutes in this regard, and beyond methanol also with ammonia firing and other possibilities. Coming to the issue of relinquishing PPA, I don't see there are much of a link into this. We are not rather hesitant about the PPA or relinquishing of PPA. Our commercial development are very squarely and strongly positioned about this. But coming to the option of the methanol, if it becomes viable, yes, definitely, that will definitely increase -- reduce the carbon footprint overall and help us in decarbonizing. Also, this, itself, can create another revenue for NTPC to venture into the chemical industry by tracking the methanol to get into other kinds of things like mixing with petrol and all these things. Thank you.
The next question is from the line of Rohit from Antique Stock Broking.
Sir, my first question is on the -- there was a meeting in the month of September, the power ministry chaired an action plan for ramping investments, which has lowered the hurdle IRR from 10% to 8%. What is the context here there? I mean is this because of the competitive intensity or the aging of model process? Why was this contemplated as such?
I think you need to see the context. That was a reference made by some of the other PSUs. As far as NTPC is concerned, we are a marketer company, and there are no restrictions on NTPC taking investment this year. So on the field other PSUs are having directives from the government as to maintain whatever levels of hurdle rate. So from that context, we are not aware what decision has been taken. This was a point which we'll discuss. As far as we know, there is no decision access on the government side. And in any case, like I mentioned, it's not going to affect [indiscernible].
Sure, sir. My second question is on this monetization views, which have come up a few days starting this time where you have discussed that you are looking at the monetization, but you haven't...
Your voice is very low. Please make it louder.
Voice is not clear. Can you speak louder?
Yes, sir. My question is on the monetization part, INR 15,000 crore NEEPCO, MBED and PTC are in the monetization. Is there any time line to it? Are you looking for a time line for the monetization?
Yes, yes. The time line has been indicated in the next 2 years and we will [indiscernible] whatever these companies you mentioned -- this. Regarding monetization, we are going ahead. We are working on that.
We'll move on to the next question. That is from the line of Sumit Kishore from Axis Bank.
My first question is in relation to overdue receivable position. Could you please tell us what is the overdue receivable as you have the drop table position as of September? And has the cash been realized against the bill discounting, which was done in FY '21?
Yes. Second question, first. Whatever, wherever we are doing bill discounting, we are receiving the payments by the discounts in time. And the total receivable position, this 13,702 crores total bill discount, total letters position.
And overdue?
Overdue is around INR 4,000 crores, INR 5,000 stores.
[ INR 4,500 crores ]?
Just a moment. If you want the exact number, let me just give you. It is INR 6,045 crores.
Okay. And my second question is over the next 5 years, how many existing operational coal-based capacity is likely to be phased out? I mean over time, like you did for Badarpur and one on [indiscernible]?
It is 110 megawatt. There is no much capacity on the full 4 units of standard.
So that will be about 440 megawatt?
Yes.
Okay. And my last question is, what was the fixed charge under recovery on account of fuel in first half of the year and second quarter of the years?
Zero.
Zero?
Yes.
Yes. Yes. In the [ existing ] team, how many gigawatt can come up for NTPC is renewable? And so far, how much has come under PSU scheme out of the pipeline of 6.3 gigawatt?
Can you come again?
Yes. How many gigawatts have come to NTPC under the PSU scheme in renewable so far? And what is the prospect there over a 2- to 3-year perspective?
So level -- under the CPSU scheme, there have been two rounds submitted so far. In the first round, out of around 2,100 megawatt, NTPC had got about 1,700 megawatts. And in the second tranche, out of 5,000 megawatts, we have got 1,990 megawatts. So that capacity with NTPC has won under the CPSU. The projects are expected to start getting commissioned sometime in the last quarter of the fiscal. That is what we expect.
Okay. And going forward, I mean, how -- what is the size of the CPSU scheme there because you seem to be very successful here?
What's the kind of -- I didn't get what you're talking about.
Yes. What is the kind of size of project opportunities that are left to be tendered out in the CPSU scheme over a 2-year time frame?
Yes. So MNRE has taken approval for overall, 12 gigawatts under the CPSU scheme, out of which 7 gigawatts have been tendered out. So that gives another 5 gigawatts to be traded out maybe after a year or so. So we are not sure on that. That's still pending out of that.
The next question is from the line of Apoorva Bahadur from Investec.
Sir, again, going back to this renewable capacity addition theme. So I understand that we will be roughly [ 7-odd gigawatts ] by FY '24 given the current pipeline. But in order to meet our target of 60-odd gigawatts by '22, what would be an ideal -- what are we targeting by '24, '25?
I think when you said 7 gigawatts is actually right now consisting of the under construction and the big one. So that doesn't -- that might get expanded by a few if we are winning the bid with shorter time line. So our broad target was to do about 15 gigawatts by 2025, which is what we hope to do.
Okay. Sir, secondly, on this storage EOI that we have sought interest for 1 gigawatt as acting capacity. I wanted to know how do we intend to use this? I mean this speaks to other renewable plants or how -- basically, how will we offer this to states? And what will be the costing structure?
Yes. So this is an EOI. So we don't intend to finalize other spaces. What we plan to do is that we have got a good response, we've got a good understanding of what kind of bids and capacities people are looking to offer. So we are in the process of finalizing the RFP for various capacities cost rate. These are broadly to take care not only of the tenders with SECI or other agencies might bring out either on RTC basis or storage purchase basis. This is also to take care of other opportunities available to NTPC, which could be to meet the requirements of the grid or affiliate services, which is also being -- which is also under the [indiscernible]. So we have to take that final call on where exactly we will to look at it, but most of them could be linked to the capacity.
Okay. Very useful, sir. Sir, also if -- correct me if I'm wrong, but right now, we are outsourcing almost all of our renewal EPC. Do we intend to shift that to in-house anytime sooner? Will that the outsource continue to be outsourced even as we grow?
So we have already started doing that. In fact, we have two small projects where it's not a full EPC, where we have gone ahead with the packaging tender mode. And that could be the way to go, depending on how we work out our numbers.
Okay. Okay. So just lastly, on the housekeeping side, if you could please share the consolidated regulated equity with us.
Consolidated would be given to you by Mr. Aditya Dar separately.
The next question is from the line of Dhruv from HDFC AMC.
Sir, one question was on the financial. Sir, if I look at the PBT after the regulatory line item, so added the regulatory line item there. And from that PBT, if I reduce the other income just to normalize for the impact of all the LPS and all the dividend income that you made. So if I look at the first half numbers, there is a decline of about 6%, 7%. And at the same time, your regulated equity on an average has grown by about 6%, 7%. So see there is some decline in the underlying performance. So is there a particular reason why this could be happening, some under -- some other under recoveries because the fixed under recoveries are similar what they were in last year?
Dhruv, we can discuss with you this separately because before PBT, I think just it consolidate -- consolidated numbers. Dhruv, I will give you separately. We can discuss this separate discussion, yes.
Yes, sir. And sir, my second question was just an observation was that if I look at the regulated equity, so this quarter, you said INR 67,800 crores. And last quarter, it was closing was INR 66,000 crores. And so the increase is about -- the increase if I gross up that, the rate of 30%. The increase -- absolute increase is about INR 4,000 or INR 5,000 -- INR 5,000-odd crores versus the capacity increase for you is about 1,500 megawatt. So the per megawatt increase in gross lot comes to about, in respect to the regulated equity, comes to only INR 3.5 crores per megawatt. So this seems a very low number in terms of the -- what I'm trying to say is the increase in capacity that you have got and the increase in regulated equity corresponding seems to be very different. Is that because the order is pending, so you're not recognizing the full regulatory? I'm just trying to understand what could be...
Dhruv, with respect to this, when we are commissioning -- when we are declaring COD of second unit, the capital cost with respect to the second units are always lower because most of the common systems are commissioned with the first unit itself. In addition to that, this TPTs has been decommissioned. So definitely, that is with respect to that has also not been available to the company now.
Got it. But -- okay, one second, but TPTs was decommissioned in Q4, right? So not in Q1?
Compared to only comparative basis, I'm telling you.
I'll add with the permission of data finance one more thing that you see when you go for COD of a project, not necessarily, we make all the expenditures at that stage. We continue to make certain expenditures, which are allowed by CSD up to the 3 years. Beyond that...
Yes, 2 years.
Two years, beyond the functioning of the stage. Some more regulated equity are expected to come for each of there [indiscernible].
Okay. So for the already commissioned project, the regulated equity will also be as you spend it, okay, got it because the second tranche basis. Perfect. Got it, sir. And sir, one last quick question is if I look at the past number for gas-based plants, this time, it was 82%, which is I've seen historically, if I see this is the lowest quarterly number that we have seen. So is it because of the high gas prices that you are not able to do that? Or is there some other reason for this?
I think Mr. Ramesh Babu will answer this question.
The gas generation was less because -- that was what they're asking, why the gas...
I was looking at the past numbers, 81.6%, if I'm not wrong.
What number?
Gas. Availability for gas basis line.
Availability, of course, we had one over I think at our [ Andhra ] station from [indiscernible]. So that was the only reason. But that last effect of [indiscernible], that will make up in the next months many [indiscernible]. And [indiscernible] gas project, but [indiscernible].
Okay. So nothing to worry here. Sorry, voice was a bit lower. Sorry, I could not hear you.
The generate was good because of the high gas cost.
Okay. I was wondering about the path, but I think I understand. Got it, sir.
Ladies and gentlemen, that was the last question. On behalf of DAM Capital Advisors, that concludes this conference call. We thank you for joining us, and you may now disconnect your lines.