How NTPC Green Can Script A New Green Story With Revived Norms?

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The latest move of the Union Cabinet Committee on Economic Affairs, giving India’s largest power generator—NTPC Limited—more teeth to allocate its internal funds to its green energy arm, NTPC Green Energy Limited (NGEL), is likely to boost the energy transition roadmap of the power behemoth. This comes at a time when NTPC aims to achieve 60 GW of renewable energy by 2032.

Incorporated in 2022, NTPC Green has now become a key part of the NTPC Group, boosting its green portfolio under one umbrella. Even the journey of NTPC now seems interesting when seen from a green lens. The whole NTPC Group added a total of 3,972 MW of new energy capacities in 2024–25, and surprisingly, it was renewables that drove the growth in the last fiscal. The conglomerate added 3,312 MW out of the 3,972 MW of cumulative power from renewable energy alone.

New Additions Inclined to RE

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If we look at the details furnished by NTPC, the majority of the new additions last year were from renewables alone. This comprises 335 MW of green capacities added by NTPC alone, and 678 MW from NTPC Renewable Energy Limited, a subsidiary of NTPC Green. On the other hand, with the acquisition of Ayana Renewable, the firm was able to get 2,123 MW of additions under its energy basket.

After being listed on the Indian stock exchange last year and broadening its procurement of a good chunk of publicly raised funds, the firm has also reported robust annual growth. The firm was able to raise around USD 1.2 billion after the issue of its IPO last year. The firm needed funding and more teeth to spur the renewable growth and handle financial issues more rationally to compete with private players.

A latest report from IISD based on the renewable energy rise through NTPC said, 'NTPC has traditionally trailed private companies in adding renewable energy capacity. Experts suggested that private companies have taken the lead in deploying renewables in India due to their ability to tap low-cost international capital at more competitive rates than domestic financial sources (allowing them to bid at lower tariffs in competitive auctions), and NTPC’s earlier risk-averse approach in making investments into emerging technologies."

Growth Under NGEL Tag

NTPC, which was earlier working with private players to boost its renewable portfolio, is now working through NGEL to enhance its green growth. While NTPC Green is overseeing the whole gamut of renewable energy growth for the firm, NTPC Renewable Energy is focusing on the project development part of the group.

“NGEL's generation performance has been… impressive, producing 6,828 million units in FY25, representing a growth of 20% from the 5,712 million units generated in the previous year. Despite some weather-related challenges, NGEL's stations delivered a commendable Capacity Utilization Factor of 24.07%,” Jaikumar Srinivasan, Director (Finance) for NTPC Green, recently told his investors.

He also added, “The financial metrics are equally robust. NGEL's total income for FY25 surged by 21% to ₹2,466 crore, compared to ₹2,038 crore last year. Total EBITDA also rose significantly by 19% in FY25 to ₹2,172 crore, compared to ₹1,819 crore in the previous financial year. NGEL’s operating EBITDA margin has improved to 90.04% in Q4 FY25 as compared to 85.96% in Q4 FY24, underscoring the robust profitability of our renewable business.”

What Can We Expect

With the latest decision, we can expect NTPC to have more teeth to allocate internal funds to NTPC Green and its subsidiaries for renewable projects. This becomes more significant as the group looks ahead to add more green projects under its ambit.

The approval is likely to pave the way for more focus on operational aspects, with less bureaucratic burden to get funds approved for the firm’s renewable projects. The new move is also likely to empower the parent body, NTPC, to invest more liberally in NGEL and its subsidiaries, expediting green growth for the group. The move is expected to bypass many prerequisite approval requirements, enabling players to move ahead in several renewable energy projects and international operations smoothly. It also boosts the credibility of NTPC Green and its subsidiaries among investors.