Green Energy In Focus As NLC India Plans To Invest Rs 75,000 Crore

NLC India Ltd. will invest Rs 75,000 crore till 2030 to meet its expansion plans, including diversification into green hydrogen, ammonia, and coal-to-diesel projects.

To balance its green versus conventional mining and thermal power generation activities, the company plans to increase its overall renewable capacity to 6,000 MW by 2030 from 1,421 MW at present.

"We have awarded a 300 MW solar power plant in the Barsingsar mines area in Rajasthan and tendered a 50 MW solar plant in the mined reclaimed area in Neyveli, Tamil Nadu," Prasannakumar Motupalli, chairman and managing director at NLC India (formerly Neyveli Lignite Corp.), told BQ Prime in an interview.

Diversifying Into Green Businesses

Along with increased focus on mining and conventional power generation, NLC India is setting up a 4-MW pilot project for green hydrogen generation in Neyveli and plans to produce diesel and methanol by converting lignite coal to liquid.

"We plan to bring out a tender for installing a 4-MW green hydrogen generation plant in the Neyveli area," he said. "It will use 4-MW solar power from the 10-MW solar plant within the NLC township."

The company has plans to convert lignite coal to methanol or diesel in the Neyveli area at a cost of Rs 5,000 crore.

"We have already floated the tenders and expect construction activity to start by September 2024. By 2026, the plant is expected to be commissioned," he said.

Prasanna Kumar Motupalli, chairman and managing director, NLCIL. (Source: Vijay Sartape/BQ Prime)

According to Motupalli, there is huge demand for methanol, and that has made the price very lucrative for sellers.

"There is sufficient demand for the product, and we expect the domestic market to be sufficient to meet our requirements," he said.

NLC India Ltd. initially plans to convert around 2 million metric tonnes of lignite to produce 0.4 million metric tonnes of methanol. It has industrial use and can also be used with diesel and petrol as blended fuel, he said.

Expansion Of Lignite And Coal Mine Capacity

The company has three lignite coal mines in Neyveli and one in the Barsingsar region of Rajasthan. There are two coal mines—one in South Pachwara, Jharkhand, and one in Talabira, Odisha.

The one in Odisha has already started operations, and the company has the right to sell in the market and even auction the coal, Motupalli said.

With the addition of lignite and coal, the coal mining capacity of NLC India is 52 million metric tonnes per annum.

"We plan to add one more mine in the Neyveli region, and that will increase our mining capacity by 12–15 million metric tonnes."The fourth mine will start operations in the next three to four years," Motupalli said.

Importance Of Lignite, Coal In The Future

India has lignite reserves of 46 billion metric tonnes. Of that, 80% is in Tamil Nadu. And out of that, 80% is in the Neyveli region, which is around 22–25 billion metric tonnes.

Motupalli highlighted that there is no dearth of coal reserves in the country. India has coal reserves of 146 billion metric tonnes; production is close to 1 billion per year, and that will also last over 100 years, he said.

"At present, we are producing 30 million metric tonnes of lignite per year. It will last for more than 150 years," he said.

According to Motupalli, although it is important to add renewable sources to the energy portfolio to meet the base load requirement, lignite and coal-based power generation will continue to grow for the next 20–30 years.

India has a renewable energy generation target of 500 GW by 2030. The energy requirement will be 3,000 billion units, and the capacity requirement will be 7,70,000 MW.

"So, along with renewable energy, conventional generation of lignite and coal-based power will be required for base load. Even in 2047, it is projected that 40% of our base load will be met by coal-based power generation," he said.

NLC India To Invest Rs 75,000 Crore Till 2030

The company will invest Rs 75,000 crore in expansion until 2030.

The investments will have a debt-to-equity ratio of 70:30. "Given our AAA rating, I don't think we will face any problem sourcing funds," he said.

"The equity can be funded through Rs 1,500 crore of annual profit. It is expected to increase to Rs 2,000 crore after the Ghatampur power plant gets commissioned next year and capacity additions, as well as the sale of solar power. This will further grow to Rs 2,500 crore once sales from the Talabira mines in Odisha start," he said.

Watch full video interview here: