NHPC Limited, the country’s largest hydropower generation company with a portfolio of more than 7 GW, has adapted suitably to the new normal of COVID times. While ensuring that its operational projects continue to run efficiently during the pandemic, it has also adopted digital work practices to ensure timely delivery on its upcoming projects. In a recent interview, Abhay Kumar Singh, chairman and managing director, NHPC Limited, spoke about the capacity addition plans, strategies and initiatives being implemented in the COVID-19 scenario, as well as the sector outlook. Excerpts…
What are the challenges that the hydropower segment is facing owing to the COVID-19 crisis?
To contain the spread of COVID-19 in the country, the government imposed tight restrictions on the movement of people and mandated social distancing. At the same time, the Ministry of Home Affairs issued guidelines that essential services should continue, with the power sector being classified as one. NHPC Limited, including its subsidiary, has 24 power stations, which have a power generation capacity of 7,071 MW. During these COVID times, our strong and dedicated team of managers, engineers and workers at project sites have been taking a lot of care and precautions to ensure that operations continue 24×7. During the COVID lockdown situation, and especially the 9PM9MIN initiative, hydropower stations demonstrated their capabilities in providing stability to the grid. Although we have had only 35-40 per cent workforce available at the project sites, they have shown commitment to keep running the machines to full capacity. There has been no spillage of water from our reservoirs. Overall, there has been no impact of COVID on NHPC as far as generation is concerned.
However, at some under-construction projects, work had to be stopped for almost two months. It has, however, been resumed now while adhering to the guidelines issued by the government. Workers who had been residing in the local site areas have been able to resume work on these projects. Apart from this, there were some supply chain difficulties faced in securing input materials such as steel, cement and spare parts. However, supply has improved gradually. Overall, the impact of COVID on hydropower projects has been limited.
Do you expect there to be any impact of COVID on NHPC’s project execution schedules?
Yes definitely, there will be some impact on execution schedules although it will not be very significant. For multi-year hydro projects, an impact of three to four months on the execution time frame cannot be considered significant. We can overcome such delays by increasing resources. Hence, we are still sticking to the original commissioning schedules and wherever additional resources need to be deployed for further accelerating progress, these are being taken up.
What are your top priorities for the company at present?
We currently have three under-construction projects – Lower Subansiri (2,000 MW), Parbati II (800 MW) and Teesta VI (500 MW) in Sikkim – which were recently taken over by NHPC through the National Company Law Tribunal (NCLT) route. Civil works for these projects have been awarded and we are only waiting to mobilise people to the project sites so that these projects can be completed on schedule. Further, we are in the process of tendering for other projects as well. Amidst the COVID lockdown period, we have not faced any challenges and have continued with the tendering process through our e-office and e-tendering. We have awarded works worth around Rs 30 billion and another Rs 15 billion worth of projects are likely to be awarded by June 30, 2020. Even if the COVID period persists for another one to two months, we do not expect to have any problem owing to it.
What are NHPC’s capacity addition targets for this fiscal? Does the company need to recalibrate its investments and capex plans in light of the pandemic?
We are targeting to complete the 2,000 MW Subansiri project by 2022-23 and the 800 MW Parbati II project by 2021- 22. We also have joint venture (JU) projects in Jammu & Kashmir – the 1,000 MW Pakaldul and the 624 MW Kiru projects – which have been awarded. We want to ensure that progress on these projects continues in a proper way so that they are commissioned by 2024-25.
We have planned a capex of around Rs 40 billion for the current financial year. Last year, our capex was around Rs 38 billion, which was fully achieved. So capex is also not an issue.
How do you evaluate the stimulus package announced for the power sector?
NHPC has dues of around Rs 35 billion, mostly from Jammu & Kashmir and Uttar Pradesh. Post the announcement of the discom package, REC Limited and the Power Finance Corporation have already started talking to the discoms of different states. This package will definitely help discoms/generators a lot. Power is an essential service so the government has given priority to the sector to ensure that it continues to work smoothly. It is a good decision by the government to give support to discoms/generators.
What are the other projects in the pipeline, including solar power?
We are working on setting up around 4,000 MW of renewable energy projects with Telangana, Odisha, Uttar Pradesh and Rajasthan. We have already issued letters of award to developers for interstate transmission systems for grid-connected photovoltaic projects aggregating 1,600 MW of installed capacity. For the remaining capacity, we are expecting to sign MoUs with state governments very soon. We have already done the paperwork for estimates, the tendering process, etc. We are also looking to engage a consultant to explore the blending of hydropower with wind and solar. We are also working on the 2,880 MW Dibang multipurpose hydro project, which is the largest in the country and entails an investment of around Rs 300 billion. Pre-investment board work has been done and the land award for the project has been issued, so the land for it will be available shortly. We have invited tenders for the diversion tunnel for the project and tendering for other packages will also be taken up. NHPC is also exploring hydropower project opportunities in Nepal and Bhutan, besides JV projects with the Assam, Jammu & Kashmir and Uttarakhand governments. NHPC is eyeing pumped storage projects as well. The government is very supportive for the development of hydropower projects, especially pumped storage plants.
How is NHPC using digital technologies to manage operations during the COVID crisis?
We are now 100 per cent doing work through e-office and all the monitoring is being done digitally, on a real-time basis. The COVID situation has taught us how to work through e-office and, in fact, the efficiency of our people who are working from home has increased and we have been able to do a lot more during this period.
What is your outlook for the recovery of the sector?
While hydro projects enjoy must-run status, thermal projects have been largely impacted owing to lower generation and stoppage of machines during this period. However, a number of industries such as the railways have resumed operations and with this, power demand is also seeing an increasing trend. Hence, with the revival in demand, power projects that have already been commissioned should be able to come back on track. For new projects, things should improve as well, as their construction work has not been kept on hold. The power sector as a whole has not been affected much so far. There were some issues of recovery of dues of power generators, which also should see an improvement. Power comes under essential services of the economy. Hence, going forward, if the government announces more sectoral relief measures, it would address the power sector’s concerns.