NTPC - Minimum Impact Of Power Purchase Agreement Relinquishment Beyond 25 Years: ICICI Securities

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ICICI Securities Report

Ministry of Power has issued a notification which enables discoms to either continue or exit the power purchase agreement after completion of its term (beyond 25 years or as specified in the PPA) and allow flexibility to generators to sell the relinquished power in any mode after state’s/discom’s exit from PPA.

The state will have to provide six months advance notice and clear all past dues before exiting.

As per our analysis, although 16.8 gigawatt of capacity of NTPC Ltd. is older than 24 years, only two plants - Dadri Coal (840 megawatt) and Unchahar (420 megawatt) - have variable cost more than Rs 3/kilowatt-hour (as of March 2021 Merit Order Dispatch data).

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