NLC India sees large opportunity in net-zero transition efforts

NLC India Limited (NLCIL), a Navratna Central Public Sector Enterprise headquartered at Neyveli, Tamil Nadu, is one among few large firms that are both vertically integrated as well as successfully diversified into an optimal mix of thermal and renewable energy generation. It has set an ambitious target to expand its cumulative power generation capacity to 17,171 MW by 2030 from 6,061 MW now.

In an exclusive interview with Bizz Buzz, its Chairman & Managing Director Prasanna Kumar Motupalli reveals the company’s Rs82,760-crore capital expenditure plans up to FY 2029-30. NLCIL has lined up various projects including expansion of its existing mines & power plants, and setting up of greenfield mines, along with wind & solar power plants across the country.

Let us know about NLCIL performance in the power and mining sectors during last three years...

For over six glorious decades, NLC India Ltd has been a forerunner amongst the public sector enterprises in the country, both in the mining and energy sectors, contributing to a lion's share in lignite production and a significant share in thermal and renewable energy generation. In the power sector, NLCIL and its subsidiary company has generated 30.08 billion units (BU) in FY23, which is the highest since inception.

In the mining sector, NLCIL producing 10.03 million tonnes of coal during the year, the highest quantity since inception. Despite the constraints on availability of land, the company has excavated 2.354 crore tonnes of lignite in FY23. Our corporate plan envisages establishing a mining capacity of 84.1 million tonnes per annum (MTPA) by 2030. The revenue collection during FY23 crossed Rs 14,600 crore. While the target for capital expenditure was Rs 2,920 crore, the company has achieved Rs 3,010 crore.

NLC India has forayed into renewable portfolios like solar and wind? What are the future plans?

NLCIL has forayed into the renewable energy (RE) sector as early as 2013. It was the first CPSU to install 1 GW of RE capacity in the country. Presently, the company is operating 1,370-MW of solar power plants across India and 51-MW wind power plant in Tamil Nadu.

NLC India Limited has incorporated two wholly owned subsidiaries NLC India Renewables Limited (NIRL) and NLC India Green Energy Limited (NIGEL). NIRL was incorporated to transfer the existing renewable assets into its fold under asset monetisation programme of Government of India. NIGEL was incorporated for focusing on new RE projects of NLCIL. Currently, the RE projects to the tune of 2 GW are under implementation and it is expected through NIGEL 5 GW capacity will be achieved by 2030.

Is there any progress in green hydrogen and battery energy storage systems?

Actions are underway for commissioning a pilot scale Green Hydrogen project at Neyveli utilising 4-MW solar PV capacity already available. We are in discussion with various technology providers to set up a green hydrogen generating facility in Neyveli with a 4-MW solar power project. The company is entering into the green hydrogen economy, which is the need of the hour.

We are in the process of procuring Proton exchange membrane (PEM) electrolysers. As a power generating company, we already have experience of hydrogen generation by conventional means in our power plants. So, we will be using that experience in making this plant. Being so much in a primitive state, our actions are very limited to pilot scale ventures, only upon technology getting proven, we wish to scale it up to production levels.

As far as the battery energy storage systems (BESS) are concerned, NLCIL has installed an 8MWh (megawatt hour) battery storage system in Andaman for smoothening the power output from the existing 20 MW solar power project. Plans are there for increasing the BESS capacity at Andaman and as calculated in the optimal power mix 2030 version 2 report of CEA, large scale grid connected BESS projects are expected in the years to come.

Could you comment on net-zero targets and commitments?

Net Zero targets are being declared by companies who are basically energy consumers. As we are energy generators our approach towards net-zero targets will be entirely different. With RE generation targets through Renewable Purchase Obligation (RPO) and Renewable Generation Obligation (RGO) being implemented, this will guide our pathway to have our trajectory towards green energy targets.

In the process of just transition, care needs to be taken in ensuring the right mix of Renewable energy and the conventional energy generation mix. There will be certain hard to abate sectors in the net-zero transition, those sectors may take little longer for onboarding to the net-zero targets, until a viable alternative is identified and implemented.

National Electricity Plan Vol I projects 52 per cent of the electricity being supplied by conventional sources during 2030, which depicts that coal/ lignite is set to play a major role since then also. Currently, we are taking care in all our processes to be sustainable and embrace the Just Transition in a most smooth manner. We see a large opportunity waiting in net-zero transition and our plan is to capitalise that. However, every care is being taken in ensuring sustainability in all our current actions. Only that will help in enabling a smooth and successful adoption of net-zero targets.

What are the updates on NLCIL's construction M-sand project?

NLCIL proposes to extract construction grade sand from its mines overburden dump. LOA issued for setting up a pilot plant in Mine-IA [2.62 Lcum (0.42 MTPA)], It is planned to set up a pilot plant in Mine-I [6.25 Lcum (1.0 MTPA)]. The tendering activities are under progress. This initiative is based on promoting sustainable practices under the mentorship of the Ministry of Coal for maximising the utilisation of natural resources and minimising the impact on river ecosystems.

NLCIL and IIT Chennai made extensive study for conversion of overburdened sandstone into IS 383: 2016 M-sand and found it suitable for construction. NLCIL will produce about 2.62 Lakh cubic meters of M-sand from overburden annually under build own- operate (BOO) business model from Lignite Mine-IA. In this regard, a contract was awarded on 31.03.2023 for establishing an M-sand plant. The company plans to establish similar plants at Lignite Mine-I and Lignite Mine-II.

What is the present status on Lignite-to-Methanol and Coal-to-Methanol and other Coal gasification projects?

The project is part of NLC's diversification plan. The company is setting up a Lignite-to-Methanol plant of capacity 1,200 TPD (tonne per day) (0.40 MTPA) at a capital cost of about Rs 4,400 crore. The project is expected to be commissioned in 2027. Tenders have been floated for two blocks and few companies have evinced interest and have participated. The project will be developed in four blocks.

We are also expecting any Central government’s promotional scheme such as PLI for gasification projects. We are also considering scaling up the capacity further based on the business scenarios evolving in future.