State-owned hydropower company NHPC Ltd is likely to submit a proposal next month to merge two other public sector hydro companies, THDC India Ltd and North Eastern Electric Power Corp. Ltd (Neepco) with itself, said Rajeev Kumar Vishnoi, chairman and managing director of NHPC.
The merged entity is expected to have a market capitalization of around ₹70,000 crore, he said. Currently, the market cap of NHPC, the largest of the three, is ₹44,157.97 crore.
“We are likely to submit the proposal to the power ministry in June. The government plans to bring together the diverse and unique expertise of the three hydropower companies to boost the country’s hydropower sector to provide uninterrupted power when solar power is not there,” Vishnoi said.
“NHPC has the experience of working in remote areas, THDC has the expertise of building large projects and Neepco has the required expertise of working in the northeastern region. The intention is to bring all this experience under one entity.”
Power minister R.K. Singh recently said the government is considering a merger of public sector hydropower companies in a bid to improve efficiency and reduce costs.
Both THDC and Neepco are currently owned by state-run thermal power major NTPC. In March 2020, NTPC acquired the Centre’s stake in the two companies for about ₹11,500 crore under a government consolidation plan.
Initially, the ratio of share in THDC that was held by the Centre and the government of Uttar Pradesh was 75:25. However, post the stake sale, the Centre’s majority stake is now owned by NTPC.
It is anticipated that the combined capacity of the merged entity would be around 20 GW. NHPC’s total installed capacity as of 30 April, according to the company’s website, is 7.097 GW, including hydro, solar power and wind power. NHPC’s share of national hydropower stands at about 14.88% of the country’s total installed hydro capacity of 46.850 GW.
Currently, NHPC and its subsidiaries and joint ventures are engaged in the construction of 16 projects aggregating to a total installed power capacity of 10.489 GW.
THDC was set up to develop, operate and maintain the 2400 MW Tehri hydropower Complex and other hydro projects. However, it currently operates several projects.
Incorporated in 1976 to plan, construct, operate and maintain power stations in the north eastern region, Neepco operates one solar, six hydro and three thermal power stations with a combined installed capacity of 2.057 GW.
The proposal to form a mega hydropower company comes at a time when the government is looking at increasing the share of hydropower in the country’s energy mix. Currently, with 46.85 GW of installed capacity, hydropower forms 11.2% of the total installed power capacity in the country.
Further, as solar and wind power supply is intermittent, hydropower and pump storage projects are expected to provide the required power supply at night and any other time period.
The Centre also plans to boost pumped hydropower storage projects. Last month, the power ministry came up with the guidelines for pumped storage projects and said that it would support them through concessional climate finance and rationalized environment clearances.
Last year, the government issued renewable purchase obligation norms to be followed till FY2029-30, which mandated the use of hydropower by distribution companies. According to rating agency ICRA, India would have to add 18 GW of hydropower by 2030 to meet its hydropower purchase obligation.
