Stable policy, revenue visibility & regulated margins triggers for NTPC

As the political uncertainty settles down, investors are reviewing their assumptions about the power sector.

- DEVANGSHU DATTA

Demand here is likely to continue to grow strongly in the long-term at around 5-6 per cent CAGR (compounded annual growth rate) during the next 6-7 years.

Given policy continuity, several trends will persist.

One is large investments in renewable power where there is a target of 500GW by FY30, which will entail annual capacity growth returns and cost passroughly through of 45GW with $200 billion of investments aggregated.

Another $150-175 billion will be needed to beef up transmission distribution and storage systems. Thermal will also continue to grow steadily with 40-50GW of capacity addition (total) over the next 5 years.

The Central Electricity Regulatory Commission's (CERC's) tariff regulations for 2024-2029 have provided clarity for regulated power companies regarding their mechanisms.

Regulatory consistency will help the transition.