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Country’s largest power producer NTPC may make investment in Coal India to battle massive coal shortage faced by the power industry, said its chairman Arup Roy Chowdhury in an interview with Bloomberg UTV.

“The company will add 4300 mega watt capacity by March, and has ambition to double power generation over next six-seven years,” Chowdhury added.

Recently, the power industry faced a massive coal shortage leading to shutdown of thermal plants and long hours of power cuts. Many power stations were left with stock for just four to five days, ringing the alarm bells in the corridors of power. “Power generation has been flat in the second quarter of fiscal year 2011-12 on the back of non-availability of coal. Logistics issue in Kahalgaon added to the woes,” he explained.

Below are the key takeaways from the interview:

Capacity addition

• Will be adding 4300 mw by March

• Will double capacity over next 6-7 years

• First captive mine starts generation in FY13

• Looking at getting approximately 50-75 MT coal in next 5 years

Coal shortage

• Power generation flat on non-availability of coal in Q2

• Have logistic issues in Kahalgaon

• Need co-operation of Coal India, affiliates

Cash crunch, equity raising, orders

• Do not have any dues from any state electricity boards (SEBs)

• Can make a demand to Reserve Bank of India (RBI) if any SEBs cannot pay

• Awards for second tender will start coming in a week

• Capex between Rs 26k-30k crore/year for next 5-7 yrs

• Competition in bulk tenders has ensured lower prices

• Government will not force buyback

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