flexible operation of thermal plant, reduced utilization of fuel remains the mainstay of the Company’s power portfolio.

transmission network. Your company is committed to add 10 GW of own renewable

OUTLOOK AND OPPORTUNITIES FOR THE COMPANY power capacity, select solar power developers for 15 GW
Strategic focus of the Company under National Solar Mission and also involved in bundling of
solar power with conventional power from its older plants to
Your Company is market leader in power generation and has reduce the cost of renewable power. Your Company takes
its presence in the entire power sector value chain which cognisance of the challenges of adding renewable energy
gives it a competitive edge in the market. Your Company capacity in India and will add such capacity progressively.
continues to focus on scaling up generating capacity through Further to provide impetus to green energy, GoI allotted tax
a mix of conventional and non-conventional fuel sources , free bonds of ` 5,000 crore to various CPSE’s. Your Company
efficiently running its installed capacity, developing own coal was one of the beneficiaries of allotment of tax-free bonds
mines and providing other value adding services like power which will go a long-way in reducing the cost of renewable
trading, consultancy etc. power.
The key is not to add capacity alone, but to see that the Off-take and realisation
capacity which has been added is financially viable and
also does not become stranded as has been the case with There have been concerns about the huge capacity addition
many IPP’s. As a policy, the Board of Directors of your programme undertaken by your company due to weak off-
company accord investment approval only after having 5 take and current energy and peak deficit numbers. Your
basic requirements in place viz. land, water, environment company firmly believes that the ground reality is going to be
clearance, fuel supply arrangements and power purchase different as structural reforms put in place in the distribution
agreement(s) (PPAs) . segment through UDAY will show results in coming years
and with improved financial health of the discoms and the
In-organic growth opportunities economic growth of the country, the demand will pick-up.
Your Company also scouts for acquisition of power plants at Almost, the entire output of the your company’s power
attractive valuations for adding capacity after analysing the stations has been contracted under long term PPAs. Further,
technical and financial viability of the project(s). Considering your Company produces power at a very competitive cost.
a lot of capacity of private/state developers is stranded The average tariff for financial year 2015-16 was `3.18/kWh
there is a good scope for consolidation in the sector. as against ` 3.28/kWh for the previous year. Low cost of
Recently, your company formed a Joint Venture Company power mitigates off-take risks. Your Company has, for the
with Jharkhand Bijli Vitran Nigam Limited (JBVNL) to acquire, 13th consecutive year, realised 100% of its dues and is
establish, operate, maintain, revive, refurbish, renovate and confident of maintaining its track record in future also.
modernize the performing existing units and further expand
Leveraging on strengths for delivering better future
capacity of Patratu Thermal Power Station, District Ramgarh,
performance
Jharkhand in two phases i.e. Phase-I (3X800 MW) and
Phase –II (2X800MW). Your Company derives competitive edge from its strengths
and is confident of meeting future challenges in the sector.
Government of Jharkhand issued the Notification dated 1st
April 2016 for transfer of assets of Patratu Thermal Power a. Project Management
Station to Patratu Vidyut Utpadan Nigam Limited, resulting in Your Company has adopted an integrated system for
addition of 325 MW to NTPC’s Group capacity. the planning, scheduling, monitoring and controlling of
Fuel Security approved projects under implementation. To coordinate and
synchronise all the support functions of project management
As discussed elsewhere in Management & Discussion
it relies on a three-tiered project management system known
Analysis, GoI has laid a lot of emphasis on improving coal
as the Integrated Project Management Control System which
supplies over the next five years; accordingly the Company
integrates its engineering management, contract management
expects to receive better coal supplies under its long term
and construction management control centres.
coal supply agreements. Coupled with its captive coal mines,
your Company strives to ensure long term fuel security. With Your company has successfully effected standardization,
increased supplies of domestic coal, reliance on imported bulk ordering of 660 MW and 800 MW units and Engineering
coal has also come-down thereby contributing to reduction Procurement and Construction (EPC) contracting to reduce
in cost of power. engineering time and thereby reduce project execution time.
Your Company has been allocated 10 coal blocks with Your company commissioned a 500 MW unit at Vindhyachal
estimated geological reserves of ~7 billion tonnes with before the schedule time thereby entitling it to earn
estimated mining capacity of 107 million tonnes per annum. additional return of 0.5% on equity deployed in the unit.
Your Company has opened Pakri-Barwadih coal mining b. Operational Efficiency
project from Western Pit and expects to extract coal shortly. The operating performance of NTPC has been considerably
Appointment of Mine Developer cum operator is under above the national average. During the financial year 2015-
process for three other mines. Other mines are under various 16 PLF of coal stations was 78.61% against all India PLF of
stages of development. 62.29%. Over the years, NTPC has consistently operated at
Your Company led the coal rationalisation initiative of GoI to much higher operating efficiency as compared to All India
reduce transport costs and avoid criss-cross movement of operating performance.
coal to decongest the railway network. In order to achieve cost-competitive, environment friendly,
Renewable Energy efficient & reliable power generation, the company has
In line with GoI’s mission of achieving renewable capacity of adopted following strategies:-
175 GW by 2022 and being partner in progress of nation,  Advance alert/support to stations through remote
your company is focussed on adding renewable energy to (Special Analytics & Computational services center)
its portfolio even though generation capacity based on fossil analysis of critical operation parameters, which in turn

50
Management Discussion and Analysis
(Annex- I to Directors’ Report)