NHPC Limited (NSE:NHPC) has become the largest organisation for hydropower development in India, with capabilities to undertake all the activities from conceptualization to commissioning in relation to setting up of hydro projects. NHPC Limited has also diversified in the field of Solar & Wind power.1

NHPC Limited presently has an installation base of 7071.2 MW from 24 power stations on ownership basis including projects taken up in Joint Venture. Considering the impediments faced during execution of these projects such as unfavourable geological conditions, difficult law and order problems, inaccessible and remote locations, the achievement so far is commendable. The generation performance of these stations has been outstanding.

NHPC is presently engaged in the construction of 5 projects aggregating to a total installed capacity of 4924 MW which includes 2 hydro electric projects viz., 2000 MW Subansiri Lower HEP and 800 MW Parbati-II HEP being executed on ownership basis and 3 projects being executed through Subsidiary/ JV Companies viz., 500 MW Teesta-VI HE Project, 1000 MW Pakal Dul HE Project & 624 MW Kiru HE Project. In addition, 14 Projects with aggregate capacity of 8326 MW are under clearance stage which includes 9 Schemes of NHPC’s own and 5 in JV mode. Further, 2 projects with aggregate capacity of 1130 MW are in S&I stage.

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Industry Overview

India is one of the fastest developing economies in the world. The existence and development of adequate infrastructure is essential for sustained growth of the Indian economy. Power is one of the most critical infrastructural component for the economic growth and welfare of nation. India’s power sector is one of the most diversified in the world. Power sector comprises generation, transmission and distribution utilities. Sources of power generation range from conventional sources such as coal, lignite, natural gas, oil, hydro and nuclear power to viable non-conventional sources such as wind, solar and agricultural and domestic waste. 2

Electricity demand in the country has increased rapidly over the years and is expected to rise further in future. The Government of India’s focus on attaining ‘Power for all’ has accelerated the capacity addition programme in the country to meet the increasing demand for electricity by adding to installed generation capacity. Indian power sector is undergoing a significant change that has redefined the outlook of the industry. The total installed capacity of all the power stations in India as on March 31, 2020 was 3,70,106 MW with the contribution of 2,30,600 MW, 45,699 MW (including 4,785 MW Pumped Storage Scheme), 87,027 MW and 6,780 MW from Thermal, Hydro, Renewable Energy Sources and Nuclear power respectively. The total electricity generation from conventional sources in the country during the financial year 2019-20 was 1,252.61 billion units as compared to 1,249.33 billion units during the previous financial year, registering a growth of 0.26% .

Hydropower Potential in India

Water is one of the nature’s invaluable renewable gifts, which can be harnessed for least cost power generation. The company's country has an enormous hydro power potential and ranks amongst the topmost nations in the world for possessing feasible hydropower capacity, of which most of the capacity is yet to be tapped. The re-assessment study of the hydroelectric potential of the country was done by the Central Electricity Authority (CEA) in 1987. According to it, the hydropower potential in terms of installed capacity is estimated at 1,48,701 MW, comprising 1,45,320 MW potential capacity from hydro-electric schemes having capacity of above 25 MW. Therefore, the outlook of India’s hydropower generation looks promising with expected pace of industrialization in the country and Government of India’s mission to provide 24x7 electricity to all. NHPC has a prominent role to play in tapping the hydropower potential of the country.

Measures Taken by Government

Government of India has taken various initiatives to achieve inclusive growth in Power Sector by providing cleaner and affordable power for all. One of such initiatives is the new hydro policy, wherein the Government of India has approved a slew of measures, which inter alia include declaration of large hydropower projects i.e. projects with capacity of more than 25 MW as renewable energy source. Provisions of Hydro Purchase Obligations (HPO) have been notified as a separate entity within Non–solar Renewable Purchase Obligation (RPO), which require Distribution Companies (DISCOMs) to buy a fixed amount of Hydro energy to cut reliance on fossil fuels, etc. Tariff rationalization measures have also been notified which allow developers to determine tariff by back loading of tariff after increasing project life to 40 years. In addition to above, budgetary support shall also be extended for flood moderation component of hydro project and cost of enabling infrastructure i.e. roads/bridges.

Further, to reduce the incidence of time and cost overruns of hydropower projects, Ministry of Power has issued guidelines for compliance, which include provision of sunset date, scheduling, dispute resolution, enhanced delegation, adoption of international best practices, timely claim settlement and incentive to labour for achieving project milestones in time.

As a payment security mechanism, a provision has been made in PPAs to provide Letter of Credit (LC) by DISCOM to generating companies. However, LCs are not being provided by DISCOMs having large outstanding dues. Ministry of Power vide its order has re-emphasized the need for maintenance of adequate LC as a payment security mechanism. National Load Dispatch Center (NLDC)/ Regional Load Dispatch Center (RLDC) were directed to schedule power to DISCOMs only after intimation by Generating Companies (GENCOs) that LCs for desired quantum of power has been opened by DISCOMs. LC for shorter duration i.e. one week / fortnight was also permitted. In case of difficulty, even payment of advance through electronic mode for one day purchase of electricity was also granted.


The company is one of India’s leading hydropower generating companies and is having more than fifteen percent of the total hydro installed capacity of the Country. The company’s priority is to provide affordable and reliable power and to support Country’s rapidly developing economy. Presently, Company is engaged in the construction of five hydro-electric projects aggregating to a total installed capacity of 4,924 MW which includes 2 hydro-electric projects i.e. Subansiri Lower H.E. Project (2,000 MW) and Parbati-II H.E. Project (800 MW) being executed on standalone basis and 3 hydro-electric projects i.e. Teesta-VI H.E. Project (500 MW), Pakal Dul H.E. Project (1,000 MW) and Kiru H.E. Project (624 MW) being executed through Subsidiaries/JV Companies. Further, projects having aggregate installed capacity of 8,211 MW are under clearance/approval stage and one project with installed capacity of 449 MW is in Survey & Investigation stage. NHPC is diversifying its portfolio by taking different renewable energy projects besides venturing into Power Trading Business. NHPC has already commissioned one project each of wind and solar energy. Details of projects under clearance/ approval stage and renewable energy projects are given in the Directors’ Report.

The company has taken initiatives to streamline the processes by adopting new technologies in the areas of engineering for its sustainable growth. NHPC has also applied the contemporary practices to reduce construction time, delays as well as cost overrun. Presently, operations of all power stations of the Company are either semi or fully automated. Construction supervision, post-commissioning monitoring and hurdle free operations are ensured by use of information technology. Many power stations are equipped with advanced distributed control systems along with SCADA systems. NHPC is also looking forward for remote operation of some of its power stations. During the year 2019-20, remote controlled operation of its two Power Stations i.e. Teesta Low Dam-III Power Station and Teesta Low Dam-IV Power Station was carried out from Regional Office, Siliguri.

Financial Overview

The principal source of income of the company is from sale of power to bulk customers comprising, mainly of electricity utilities owned by State Governments/ Private Distribution Companies pursuant to long-term Power Purchase Agreements. The rate of electricity are determined Power Station wise by the Central Electricity Regulatory Commission (CERC). The CERC vide its notification no. L-1/236/2018/CERC dated March 07, 2019 has issued Tariff Regulations for the tariff period 2019-24 and subsequent amendments from time to time. Pending approval of tariff for the period 2019-24 by Central Electricity Regulatory Commission (CERC), sales in respect of the Power Stations have been recognized provisionally as per ibid tariff notification except in case of Teesta Low Dam- IV Power Station in respect of which sale has been recognised as per tariff notified by CERC for the period 2014-19 and taking into account provision towards truing up of capital cost of the Power Stations in line with CERC tariff regulations 2019-24.

Total income in Fiscal 2020 increased by 7.55% to Rs 9,771.59 crore from Rs 9,085.96 crore in Fiscal 2019, primarily due to increase in generation in Fiscal 2020, increase in Dividend Income from Subsidiaries, increase in Revenue from Power – Trading, increase in Revenue from Project Management and Consultancy works partially offset by decrease in Late Payment Surcharge, decrease in interest on investment/FDRs, decrease in sales pertaining to previous years and decrease in Operating Lease Income.

In Fiscal 2020, 26126 MUs of electricity (excluding infirm power of 190 MUs generated by Parbati-II HE Project during FY 2019-20) was generated from installed capacity of 5551 MW as against 24430 MUs (excluding infirm power of 42 MUs generated by Parbati-II HE Project during FY 2018-19) from installed capacity of 5551 MW in Fiscal 2019. Accordingly, there was an increase of 6.94% in the number of units generated. The average selling price (after adjustment of components of earlier year sales and free power to home state) was Rs 3.52 per unit for 22,936 million units sold in Fiscal 2020 as against Rs 3.58 per unit for 21,481 million units sold in Fiscal 2019. During Fiscal 2020, the Company has earned Rs 810.00 crore towards incentives against Rs 747.65 crore in Fiscal 2019

Sale of energy increased by 4.10% to Rs 7,430.81 crore in Fiscal 2020 from Rs 7,138.24 crore in Fiscal 2019 primarily due to higher generation in Power Stations. Company’s Plant Availability Factor (PAF) in Fiscal 2020 was 84.04% as compared to 84.97% in Fiscal 2019.

During the financial year 2019-20, the company has achieved highest ever generation of 26,121 MUs, surpassing the generation target of 26,000 MUs for the ‘Excellent’ rating under MoU with Ministry of Power, Government of India. The above generation is excluding the deemed generation of 195 MUs from Nimoo Bazgo and Chutak Power Stations.

 Fiscal 2020Fiscal 2019
Units of electricity generated (in million units)2612624430
Sales of Energy7,430.817,138.24
Income from Finance Lease203.65208.28
Income from Operating Lease666.57748.61
Revenue from Contracts, Project Management and Consultancy Works27.8823.85
Revenue from Power - Trading239.4712.96
Other Operating Income167.0329.24
Revenue from operations8,735.418,161.18
Add: Other Income1036.18924.78
Total Income9,771.599,085.96

The company's profit before tax decreased by 3.65% to Rs 3,608.17 crore in Fiscal 2020 from Rs 3,744.78 crore in Fiscal 2019. Total Comprehensive Income (TCI) i.e. total profit inclusive of OCI in Fiscal 2020 was Rs 3,006.55 crore i.e. an increase of 14.84% as against Rs 2,618.14 crore in Fiscal 2019.

Recent developments

Nov 11, 2020 ; NHPC net profit down 11% to Rs 1,300 crore in September quarter. 3

State-owned hydropower major NHPC on November 11 reported a 10.8 per cent fall in consolidated net profit to Rs 1,300.40 crore in the September quarter, mainly due to lower revenues. The consolidated net profit for the year-ago period was Rs 1,457.68 crore, the company said in a BSE filing.

Total income in the September quarter declined to Rs 3,086.03 crore from Rs 3,360.35 crore in the same period last year. The company's primary source of revenue is from generation and sale of hydroelectricity.

According to NHPC, "Power supply being an essential service and their must-run status for Run-of-the-River (ROR) projects and scheduling to the extent possible by RLDCs (regional load dispatch centres) in case of ROR with pondage and storage projects." Citing these factors the company said, "No material impact of COVID-19 on the financial performance of the Group including interalia the carrying value of various current and non-current assets or the ability to service the debt of the company, is expected to arise."

However, the company said that in line with the directions of the Ministry of Power on May 15 and 16, 2020, it has given a one-time rebate of Rs 185 crore to discoms and power departments of States/ Union territories for passing on to ultimate consumers on account of COVID-19 pandemic. The said rebate has been presented as an "exceptional item" in the statement of financial results for the quarter ended June 30, 2020, it added.


  1. ^ http://www.nhpcindia.com/about-overview.htm
  2. ^ http://www.nhpcindia.com/writereaddata/images/pdf/NHPC-Annual-Report-2019-20-E.pdf
  3. ^ https://www.moneycontrol.com/news/business/earnings/nhpc-net-profit-down-11-to-rs-1300-crore-in-september-quarter-6105601.html
Created by Asif Farooqui on 2020/11/24 08:15
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