Indian power company NTPC has reported its Q4 results, stating that its net profit had increased despite being offset by higher operating costs and lower volume. The company’s net profit was recorded at INR 2,260 crore ($305 million), up from INR 2,152 crore ($290 million) in the same quarter the previous year. However, the company’s operating costs rose by 12.4% YoY, to INR 22,042 crore ($2.9 billion), while its volume was down 2.5% YoY, at 64.5 billion units.
Higher operating costs and lower volume impact NTPC’s Q4 results
NTPC’s operating costs rose by 12.4% YoY in Q4 2023, to INR 22,042 crore ($2.9 billion), due to a surge in fuel costs that comprised almost 83% of the company’s expenses. Meanwhile, the company’s volume was impacted by a decrease of 2.5% YoY, as it generated 64.5 billion units in Q4 2023, compared to 66.2 billion units in the preceding quarter. NTPC’s gross power generation showed an increase of 0.9% YoY, generating 69.5 billion units in Q4 2023.
NTPC aims for 32 GW of renewable energy capacity by 2032
NTPC has set a target of having approximately 32 GW of renewable energy capacity by 2032, according to the company’s chairman and managing director, Gurdeep Singh. This would increase the percentage of renewable energy in NTPC’s overall generation mix from the present level of around 13%, to 30%. To achieve this target, the company will focus on solar and wind energy generation, and plans to commission around 2-3 GW of capacity each year, over the next decade.
NTPC to try hydrogen production for power generation
NTPC aims to explore the potential use of hydrogen as a fuel, for generating electricity, according to the company’s chairman and managing director, Gurdeep Singh. Hydrogen, being a zero-emission fuel, could be an alternate source of energy, replacing fossil fuels, thereby reducing carbon emissions from power generation. Singh stated that NTPC will conduct a feasibility study to assess the viability of using hydrogen in its power plants.
NTPC relaxes payment terms for small and medium-enterprise vendors
NTPC has announced relaxed payment terms for its small and medium-enterprise (SME) vendors, amid the economic fallout of the COVID-19 pandemic in India. As part of this initiative, SME vendors will now get payments within 30 days, instead of the previous 45-day payment cycle. Additionally, NTPC has waived off certain contract provisions, which will enable SMEs to qualify for contracts, without a performance guarantee.
Increased solar capacity usage boosts NTPC’s carbon offsetting efforts
NTPC has increased its usage of solar power for internal consumption, to power its buildings, streetlights, water supply systems, and factories, with the aim of reducing its carbon footprint. NTPC currently has a total installed capacity of nearly 66 GW, with around 8.6 GW of renewable energy capacity, including solar and wind energy, which translates to approximately 13% of its overall generation mix. With the deployment of additional solar plants, NTPC is likely to increase its generation of renewable energy, which can be used to offset its overall carbon footprint.
Despite experiencing higher operating costs and lower volume, NTPC has reported an increase in net profit in Q4 2023. The company has set an ambitious target of having approximately 32 GW of renewable energy capacity by 2032, which would represent a significant increase from its present levels. NTPC’s exploration of hydrogen as a fuel source for power generation could also lead to a significant reduction of carbon emissions from its power plants. Additionally, the company’s efforts to increase its usage of solar power will contribute to its carbon offsetting efforts. Finally, NTPC’s initiative to relax payment terms for SME vendors is expected to lend support to India’s struggling SME sector, during the ongoing COVID-19 pandemic.
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