NTPC Limited (NTPC) Q3 FY23 Earnings Concall Transcript

NTPC Limited (NSE:NTPC) Q3 FY23 Earnings Concall dated Jan. 28, 2023.

Corporate Participants:

Jaikumar Srinivasan — Director of Finance

Mohit Bhargava — Chief Executive Officer, RE Limited

Ujjwal Kanti Bhattacharya — Director, Projects

Analysts:

Mohit Kumar — DAM Capital — Analyst

Sumit Kishore — Axis Capital — Analyst

Nikhil Abhyankar — DAM Capital — Analyst

Abhineet Anand — Emkay Global Financial Services — Analyst

Anupam Goswami — BOB Capital — Analyst

Apoorva Bahadur — Goldman Sachs — Analyst

Girish Achhipalia — Morgan Stanley — Analyst

Anuj Upadhyay — HDFC Securities — Analyst

Dhruv Muchhal — HDFC Mutual Fund — Analyst

Puneet Gulati — HSBC — Analyst

Presentation:

Operator

Ladies and gentlemen, good day, and welcome to the Q3 FY ’23 Earnings Conference Call of NTPC Limited, hosted by DAM Capital. [Operator Instructions].

I now hand the conference over to Mr. Mohit Kumar from DAM Capital. Thank you. And over to you, Mr. Kumar.

Mohit Kumar — DAM Capital — Analyst

Yes. Thank you, Michel. On behalf of DAM Capital, I welcome you all to the Q3 FY ’23 Earnings Conference Call of NTPC. We have with us the senior management of NTPC, represented by Mr. Jaikumar Srinivasan, Director, Finance; Mr. Dillip Kumar Patel, Director, Human Resources; Mr. Ramesh Babu V., Director, Operations; Mr. Chandan Kumar Mondol, Director, Commercial; and Mr. Ujjwal Kanti Bhattacharya, Director, Projects.

With this, I would like to hand over the call to Mr. Srinivasan for his opening remarks, and then we can have a Q&A session. Over to you, sir.

Jaikumar Srinivasan — Director of Finance

Yes. Am I sufficiently audible?

Mohit Kumar — DAM Capital — Analyst

Yes, sir.

Jaikumar Srinivasan — Director of Finance

Yes. Very good evening to all the participants. I am Jaikumar Srinivasan, Director, Finance. Welcome all of you to the Q3 FY ’23 Earnings Conference Call of NTPC Limited. I have with me Shri Dillip Kumar Patel, Director, Human Resources; Ramesh Babu, Director, Operations; Shri Chandan Kumar Mondol, Director, Commercial; and Shri Ujjwal Kanti Bhattacharya, Director, Projects. I have with me other key members of the NTPC team as well.

Today, the company has announced the unaudited financial results and key performance highlights for the third quarter and 9 months ended 31st December 2022. The same have already been uploaded on both the stock exchanges. NTPC has completed yet another remarkable quarter with very strong operational and financial performance. We have made significant progress on various strategic initiatives as well that we’ll share with you. Operational highlights for Q3 and 9 months FY ’23 are as under.

During Q3 FY ’23, NTPC has added 630 megawatt of commercial capacity to its portfolio from renewable sources. As on 31st December 2022, the commercial capacity of NTPC stands at 58,269 megawatt on stand-alone basis and 70,884 megawatts for the group as a whole. NTPC Group generated 295 billion units in 9 months FY ’23 as compared to 265 billion units in 9 months FY ’22, an increase of around 11%. NTPC stand-alone gross generation in 9 months FY ’23 is 255 billion units as compared to 227 billion units in the corresponding previous period, registering an increase of around 12%. During the 9 months FY ’23, average PLF of NTPC coal station was 74.45% as against the national average of 63.27% thereby maintaining a spread of over 11%.

For 9 months FY ’23, 5 coal stations of NTPC which is Korba, Singrauli, Vindhyachal, Rihand and Talcher were among the top 10 performing stations in the country in terms of PLF. During 9 months FY ’23, there has been an improvement in scheduling by the beneficiary, thereby reducing the backing down from 76.28 billion units in 9 months FY ’22 to 72.38 billion units, a reduction by around 4 billion units.

I now share the status of the fuel supply. Coal supply during 9 months FY ’23 improved to 166 million metric tonnes, including 11.59 million metric tonne of imported coal from 148 million metric tonne, including 1.4 million metric tonne of imported coal in 9 months of the corresponding previous year. During 9 months FY ’23, materialization of coal against ACQ, which is an annual contractor quantity has improved to 98.2% as against 97.80% in the corresponding previous period. NTPC’s own coal production, captive coal production during 9-month FY ’23 was 14.55 million metric tonnes, with around 51% growth as against 9.65 million metric tonne in 9 months FY ’22.

Cumulative expenditure of INR8,933 crores has been incurred on the development of coal mines till 31st December 2022. NTPC Limited dispatched its first coal rig from its Talaipalli coal mines to NTPC Lara Super Thermal Power project in Chhattisgarh on 22nd November 2022. The commencement of rate loading sales away for way forward for Talaipalli mines to dispatch coal in efficient and smooth manner to meet the coal requirement of 1,600 megawatt Lara station.

Now I’ll update on the various other financial highlights. Total income for Q3 FY ’23 is INR42,149 crores as against corresponding quarter of previous year total income of INR31,161 crores, registering an increase of 35.26%. On 9-month basis, there is an increase of 39.6% in the total income. That is from INR89,315 crores in 9 months FY ’22 to INR1,24,685 crores. Profit after tax, PAT for Q3 FY ’23 is INR4,476 crores as against INR4,246 crores in the corresponding quarter of previous year, registering an increase of 5.42%. On a 9-month basis, PAT is INR11,524 crores as against INR10,664 crores in the 9 months FY ’22, registering an increase of 8.07%.

Total income of the group for 9 months FY ’23 is INR1,33,231 crores as again corresponding previous period of total income of INR97,270 crores, registering an increase of 36.97%. PAT of the group for 9 months FY ’23 is INR12,250 crores as against corresponding previous period PAT of INR11,761 crores, registering an increase of 4.16%. During 9 months FY ’23, our joint ventures and subsidiaries have earned a profit of INR1,771 crores as compared to INR2,225 crores in the corresponding period of previous year. During 9 months FY ’23, we have received dividend income of INR1,046 crores from our subsidiaries and joint venture companies as against INR1,142 crores received during 9 months FY ’22.

The regulated equity as on 31st December 2022 stands at INR75,449 crores on a stand-alone basis. As regards to fund mobilization, NTPC has issued unsecured debentures aggregating to INR500 crores at the rate of 7.44% per annum on 16th December 2022 with a tenure of around 10 years. Average cost of borrowing as on 9-month FY ’23 was 6.32% as compared to 5.95% in 9 months FY ’22. NTPC Renewable Energy Limited has signed a green term loan agreement of INR1,325 crores with Union Bank of India, which includes secured loan of INR825 crores, an unsecured loan of INR500 crores at very competitive rates. The secured loans has been tied up for a tenure of 20 years, longest-ever tenor from any domestic lender with NTPC. The unsecured loan is of 5 years tenure with bullet repayment and can be used for any under-construction projects of NTPC Renewable Energy Limited.

As regards capital expenditure in 9 months FY ’23, we have incurred a group capex of INR26,058 crores as compared to INR25,064 crores in the corresponding previous period. The capital outlay of NTPC on stand-alone basis has been estimated at INR22,454 crores for financial year. I would like to list on a few other highlights. Towards achieving the country’s net-zero energy target by 2070, NTPC plans to have a foray into nuclear power. For this, NTPC plans to execute nuclear power capacity addition through pressurized heavy water reactors through ASHVINI, a joint venture between NTPC and Nuclear Power Corporation of India.

Additionally, nuclear power — additionally, nuclear capacity additions through implementation of small modular reactors in pressurized water reactors with government to government agreement is also being contemplated. NTPC is also looking for making fuel tie-up with Uranium Corporation of India Limited to ensure requisite fuel availability. The modalities for asset transfer of 2 pressurized heavy water reactors, PWHR project, which is Chutka 2×700 megawatt in MP and Mahi Banswara 4×700 megawatt in Rajasthan from NPCIL to ASHVINI, the joint venture company are in progress.

NTPC holds a strong commitment towards renewable energy. NTPC has added more than 1.3 gigawatt of renewable capacity in financial year ’23 till December 2022. The company has also forayed into a variety of business areas, including e-mobility, green hydrogen solutions and Waste to Wealth. NTPC Group has [Technical Issues] 3,154 megawatt of RE projects under EPC mode as at 31st December ’22. Presently, 4,718 megawatt of RE projects, including ongoing projects of NTPCREL are under construction. Further bids for 340-megawatt capacity RE projects have been won, which will be awarded soon. Plans for development of another 24 gigawatt ultra-mega renewable energy power parts are in various stages.

Carbon capture utilization storage, CCUS is one of the key component of India’s CO2 mitigation strategy to facilitate the transition towards a low-carbon energy economy and onwards to net-zero emission levels. To achieve this goal, NTPC research wing NETRA, an Council of Scientific and Industrial Research, Central Building Research Institute, Roorkee, have rolled out an R&D project for development of carbon-negative carbonated aggregate, which can be used in building, road and other construction activities. As part of this study, CO2 captured from flue gas, fly ash and other industrial waste will be converted into CO2 sequestered engineered aggregates, also called as carbonated or mineralized aggregate.

Upon development, carbonated aggregate is expected to become a viable alternative to natural aggregates and thereby conserve ecology and environment. Amongst the several MOUs signed by NTPC and its subsidiary a few are being highlighted here. NTPC Renewable Energy Limited has signed a Memorandum of Understanding with National Institute of Wind Energy for strategic collaboration in developing onshore and offshore wind power projects in India. The MoU shall help in building long-term partnerships with NIWE and shall develop the capabilities of NTPCREL in a longer term for assessment identification and studies for development of onshore and offshore wind projects.

The MOU shall also be helpful in identification of new wind sites for further development. NTPC Green Energy Limited, NGEL signed an MOU with Gridco Orissa for the development of large-scale ground solar, floating solar and pumps storage project in the state aggregating to 3,000 megawatts. To facilitate the transition towards a low carbon energy economy and subsequently net-zero emission, NTPC and GE Power Limited, signed an agreement for partnering on research, development and engineering of technologies that will enable NTPC to reduce the amount of coal fired in their units and gradually replace it by co-firing of alternative fuel biomass. Both companies will jointly explore the pathway to reduce CO2 emissions from Tanda thermal power plant and further implement across the NTPC projects in India.

NTPC has signed a nonbinding MOU with Tecnimont Private Limited, an Indian subsidiary of Maire Tecnimont Group, Italy. The objective of the MOU is to jointly evaluate and explore the possibility to develop a commercial scale green methanol production facility at NTPC project. The green methanol project involves carbon capturing from NTPC power plants and converting it into greenfield. Green methanol has a wide range of applications, including serving as a base material for the chemical industry, storing renewable electricity and even a transportation — as a transportation fuel. This project, along with pilot skill green methanol project under execution aligns NTPC’s commitment to sustainable and renewable energy and will significantly contribute to India’s energy transition.

NVVN, our trading subsidiary, transacted 22 billion units during the 9 months FY ’23 as against 18 billion units during the 9 months FY ’22 [Phonetic], registering growth of around 24%. NTPC has been conferred with prestigious SHRM HR Excellence Awards 2022. NTPC has been awarded the winner for Excellence in Developing Leaders of Tomorrow for following the best practices to identify individuals from within the organization and develop them into leaders who will take on challenging roles in the future. ET Ascent named NTPC Limited as Star of the Industry for excellence and leadership. NTPC won the award for Dream Company to work for in area of excellence and leadership. The award harnessed NTPC’s constantly evolving talent strategy and people’s practice that are in line with business requirements and work to create a meaningful environment that fosters business excellence.

It acknowledges NTPC as a pioneer in the field of — field and an ideal location to work by supporting the business people first philosophy. NTPC has received best globally competitive power company of India in the overall power sector award at PRAKASHmay 15th Enertia Awards 2022. The award marks its contribution to the power sector that includes building a strong RE portfolio for NTPC and leading the company as a top global power sector enterprise. CMD NTPC has been restored with the CEO of the Year Award at the 24th Annual Platts Global Energy Award for his outstanding contribution to power sector.

The CEO of the year demonstrates the ability to sustain the sector amid universal headwinds while supporting the employees who propel their organization in the future. NTPC has been recently conferred with the Institute of Chartered Account of India Award for Excellence in Financial Reporting for financial year ’21-’22 in the category of public sector entities. The award showcases the best practices followed by company for comprehensive and transparent reporting of financial statements.

These were some of the key highlights I wanted to share with all the participants in this earnings conference call before we begin the question-and-answer session. Thank you so much. So we can take on the questions now.

Questions and Answers:

Operator

[Operator Instructions]. We have the first question from the line of Sumit Kishore from Axis Capital.

Sumit Kishore — Axis Capital — Analyst

My first question is regarding the fixed cost under recovery, what is the figure for 9 months FY ’23 as the corresponding number for previous year?

Jaikumar Srinivasan — Director of Finance

Yes. The fixed cost under recovery for 9 months has been INR548 crores, this is much less than the corresponding previous period, which was INR692 crores. And — but however, we are targeting that in the fourth quarter, this will be brought down significantly to a level of INR250 crores.

Sumit Kishore — Axis Capital — Analyst

Okay. You had mentioned in your opening remarks the share of profit from JVs in 9-month FY ’23, I couldn’t get the number. And could you please give the corresponding number for previous year and the reasons for the decline?

Jaikumar Srinivasan — Director of Finance

See, as far as subsidiaries are concerned, yes, there has been a 7% drop in the profits. And JV, there is a significant drop. However, the underlying reason for this is common that most of these companies are subjected to the LPS rules where their outstanding dues have been subjected to the installments. So there has been a drop as far as the late payment surcharge is concerned. So that is the reason — broad reason for that.

Sumit Kishore — Axis Capital — Analyst

Can you please give us the numbers? And also, what is the impact because of HURL, the fertilizer JV.

Jaikumar Srinivasan — Director of Finance

HURL variation would be around INR76 crores. Because the gas consumption is on higher side as compared to norms. That’s the basic reason. And NTPC’s share is 29.67%, compared to previous period, there is an adverse of around 26% [Phonetic].

Sumit Kishore — Axis Capital — Analyst

Sir, can you please repeat the number of share of profit from JVs in 9 months FY ’23 and the previous year?

Jaikumar Srinivasan — Director of Finance

You want overall or HURL?

Sumit Kishore — Axis Capital — Analyst

No, no, overall for JVs and subsidiaries.

Jaikumar Srinivasan — Director of Finance

Yes. Overall JV and subsidiary as far as subsidiary is concerned, the profit is INR1,290 crore, which was INR1,391 crore in the corresponding last year. And share of profit from joint ventures, which was INR834 crore last year, is now INR481 crores.

Sumit Kishore — Axis Capital — Analyst

Okay. So also if you could give us an update on the total under construction and development capacity which you have for RE right now and update on the UMREPPs that you have been pursuing of ’24, these are what — what is the update since you last spoke?

Jaikumar Srinivasan — Director of Finance

Yes. Let me give you a broad perspective on the whole capacities, is currently, the installed capacity is 70,884 that is as at the end of December ’22. Now it’s slightly more in January. Under construction project aggregates to 18,253, wherein, the coal projects under construction is 11,280, hydro is 2,255. I’m telling this for the group as a whole. Renewable capacity under construction is 4,718, so there is a total of 18,253 under construction. And going ahead, around 42 gigawatts is under feasibility and planning. Out of which, we are planning a 6 gigawatt from coal-based clients. RE would constitute around 36 gigawatts. So that’s out of 45 [Phonetic] gigawatt. So out of the RE around 26 gigawatt will be implemented through solar parks and balance 10 gigawatt would be under CPSU schemes.

Operator

We have the next question from the line of Nikhil Abhyankar from DAM Capital.

Nikhil Abhyankar — DAM Capital — Analyst

Congrats on a good set of numbers. So sir my — sir, can you just throw some light on the ash transportation cost of around $31 billion [Phonetic]. How much was it booked in the present quarter? And also, why is there a spike in the finance cost in Q3 over Q2?

Jaikumar Srinivasan — Director of Finance

Yes. See, there is an increase of around INR524 crores — you are talking about Q2 versus Q3, isn’t it? The increase is on the account of ERV exchange rate variation to the tune of INR421 crores. There is an increase in the cash credit of 70.48 [Phonetic], rupee term loan is INR68.14 crores and interest on foreign currency loan is close to INR29.28 crores. Interest on bond is INR28.96 [Phonetic] crores. So these are the differentials. And the increase is partly offset by a decrease in interest on foreign currency bonds by INR45.22 crores. Discount on commercial paper by INR44.33 crores. So these are the broad reasons for the comparison between Q2 and Q3.

What was your first question?

Nikhil Abhyankar — DAM Capital — Analyst

So the ash transportation cost, how much of it was booked in this quarter?

Jaikumar Srinivasan — Director of Finance

9 months, you’re asking or the quarter?

Nikhil Abhyankar — DAM Capital — Analyst

The total is around $31 billion. So how much was it booked in this quarter?

Jaikumar Srinivasan — Director of Finance

Give me a second, please. See, the net ash transportation cost last year was INR1,600 crores. If you deduct the INR270-odd crores that we received over the sale of ash, it works around INR49 [Phonetic] crores. This year, we have only spent around INR425 [Phonetic] crores in ash transportation. And generally, ash transportation is higher in Q3 because Q2 is a monsoon season, there will be less ash transportation.

Nikhil Abhyankar — DAM Capital — Analyst

Understood. And sir, also…

Operator

Sorry, Mr. Abhyankar, your voice broke. Can you please repeat your question?

Nikhil Abhyankar — DAM Capital — Analyst

Am I audible now?

Operator

Yes, please proceed.

Nikhil Abhyankar — DAM Capital — Analyst

Sir, any idea — can you throw some more light on thermal capacity ordering pipeline? Any status on 1.6 gigawatt Lara expansion?

Jaikumar Srinivasan — Director of Finance

Lara’s expansion is under NIT, you must be knowing. This is 2×800 megawatt, 1,600 megawatt capacity. And we expect to open the bid in the month of March itself and award it by April.

Nikhil Abhyankar — DAM Capital — Analyst

And sir, the pipeline for FY ’24 and ’25?

Jaikumar Srinivasan — Director of Finance

For — even for this year itself ’23-’24, we are targeting purely which will be by the December 2023. And overall, if you take FY ’23-’24 and ’24-’25, other than Talcher thermal, it will be around 6,100 megawatts total capacity.

Nikhil Abhyankar — DAM Capital — Analyst

Okay, sir. Understood. And sir, just a final question. Any status on the — just — yes, on the renewable thing, sir? Has there been any changes due to the higher prices of the modules?

Jaikumar Srinivasan — Director of Finance

I will request Mohit Bhargava, the CEO of RE Limited, to take this question.

Mohit Bhargava — Chief Executive Officer, RE Limited

Yes. But what exactly was the question?

Jaikumar Srinivasan — Director of Finance

Can you repeat your question for more clarity?

Nikhil Abhyankar — DAM Capital — Analyst

So what is the status of the renewable team, the monetization plan?

Mohit Bhargava — Chief Executive Officer, RE Limited

Monetization plan is mostly on track, it is now largely completed…

Operator

Sir, I’m sorry to interrupt. I would request you to come closer to the polycom and speak, please?

Mohit Bhargava — Chief Executive Officer, RE Limited

Monetization plan, I think it is on I think by this year in financial year end or we will conclude it.

Nikhil Abhyankar — DAM Capital — Analyst

Sir, I did not get you. Can you please repeat?

Mohit Bhargava — Chief Executive Officer, RE Limited

This monetization is on track, and we’ll be concluding it by March.

Operator

We have the next question from the line of Abhineet Anand [sic] from Emkay Global Financial Services.

Abhineet Anand — Emkay Global Financial Services — Analyst

Sir, if you can just let us know the adjusted PAT and incentive for the quarter or 9 months?

Jaikumar Srinivasan — Director of Finance

Yes. The adjusted PAT for the…

Operator

Sir, I’m sorry to interpret. Sir, your voice is echoing. [Technical Issues]. Sir, please proceed.

Jaikumar Srinivasan — Director of Finance

Yes. The adjusted PAT for Q3 financial year ’23 would be INR4,424 crores as against the reported PAT of INR4,476 crores. This compares favorably from the 9 months of the corresponding last period by — the profit would be — adjusted profit would be up by 18%.

Abhineet Anand — Emkay Global Financial Services — Analyst

And incentives, sir, can you highlight the incentive as well?

Jaikumar Srinivasan — Director of Finance

Yes. The incentive for Q3 is INR125 crores, which is the highest ever in the Q3 in the last 2, 3, 4 years. And with this, the 9 months incentive has reached to a level of INR425 crores, which is also an unprecedented level.

Abhineet Anand — Emkay Global Financial Services — Analyst

And if you can let us know for ’23, ’24, ’25, what can be the capacity you’re expecting [Phonetic] addition expected for the group?

Jaikumar Srinivasan — Director of Finance

Capacity addition?

Abhineet Anand — Emkay Global Financial Services — Analyst

Yes.

Jaikumar Srinivasan — Director of Finance

Yes. Director, Project will be answering. ’23, ’24 capacity addition expectation, ’23, ’24.

Ujjwal Kanti Bhattacharya — Director, Projects

We are expecting 5,940 total capacity in ’23, ’24.

Abhineet Anand — Emkay Global Financial Services — Analyst

And ’25, sir?

Ujjwal Kanti Bhattacharya — Director, Projects

’25 will be 4,684.

Operator

We have the next question from the line of Anupam Goswami from BOB Capital.

Anupam Goswami — BOB Capital — Analyst

Congrats on a good set of numbers. My first question on the FGD capex and the total outstanding on the FGD, where are we?

Jaikumar Srinivasan — Director of Finance

Your voice is not very clear. Can you can you repeat?

Anupam Goswami — BOB Capital — Analyst

My first question is on the FGD pipeline. Where are we and how much is required and the capex amount as well.

Jaikumar Srinivasan — Director of Finance

FGD, we have already awarded that are 62,000 megawatt capacity approximately, and there will be commission progressively. 7 units total 230 [Phonetic] have been already commissioned long ago. And there are ongoing 129 units under construction. That is 60,940 megawatt. That includes DSI at Tanda Unit 1, 2, total 6,270, the capex has awarded FGD is INR2,961 [Phonetic] crores but there might be some amount price variation. So this may go up capex wise. And we have 1,454 megawatt equivalent total 12 units under retendering. Once we complete that retendering, it will be 148 units and total cumulated capacity, 64,724 megawatts, and the capex will be of the order of INR31 crores [Phonetic] as awarded.

Anupam Goswami — BOB Capital — Analyst

Okay. We are hoping to get it commissioned by FY ’25, all 65,000?

Jaikumar Srinivasan — Director of Finance

So we have A,B,C category. We all know by this time, government has come out with this categorization. So we’ll be completing within that category limits, like for A category, it will be the deadline is December ’24, and we’ll be on track. For B category, it will be ’26 and for C category — ’25 sorry. And C category ’26. And we’ll be on track for all these units.

Anupam Goswami — BOB Capital — Analyst

Okay. Sir, my second question on the — we have seen the industry that we have crossed about 200 gigawatts fleet capacity in December, and that also in winter. So going forward in the summer time, looking at a similar level last year, we have faced a little shortage on the coal. Do you see a similar scenario coming up or forming going forward? Or where should we look at the tariff rates also going forward?

Jaikumar Srinivasan — Director of Finance

Can you repeat the question?

Anupam Goswami — BOB Capital — Analyst

Yes, sir.

Operator

Sorry to interrupt Mr. Goswami. I would request you to use your handset to ask a question.

Anupam Goswami — BOB Capital — Analyst

Am I audible now?

Operator

Yes, sir, this is much better. Please continue.

Jaikumar Srinivasan — Director of Finance

Much audible.

Anupam Goswami — BOB Capital — Analyst

We are seeing 200 gigawatts of fleet capacity crossing December. So going forward, do we envisage any coal supply shortage and that to where the tariff goes over there. Do we have any kind of risk to this coal supply?

Jaikumar Srinivasan — Director of Finance

See, in the month of April, it is likely to go to around 230 gigawatts is the fleet capacity expected. As far as NTPC is concerned, we have around 15 days stock of coal as of now. We are better than last year, and we have also some coal coming from abroad, that’s in pipeline. So we don’t see any shortage this year. And moreover, our captive mines have increased production by around 50%. So therefore, we are comfortable on coal trend.

Operator

[Operator Instructions]. We have the next question from the line of Apoorva Bahadur from Goldman Sachs.

Apoorva Bahadur — Goldman Sachs — Analyst

Sir, in your opening remarks, you briefly touched upon the company’s plan to enter into nuclear power generation. So if you could share some numbers over there, what would be the target capacity addition in the time line?

Jaikumar Srinivasan — Director of Finance

Yes. See, I said because of term repetition that we will be implementing this through a joint venture called us ASHVINI, it’s a joint venture of NTPC and nuclear power. There are 2 projects lined up, which is Chutka 2×700 megawatt in MP and Mahi Banswara, 4×700 in Rajasthan. Broadly speaking, the — if you take 2 units of 700 megawatts, the project cost would be — completion costs would be close to INR25,000 crores, which would translate to a tariff of INR7.36 per KWH. So as far as — his based question was the capacity addition.

See, as per our plan, by 2032, when we aspire to become 120,000 megawatt company, we have a target of 2,000 megawatts from nuclear. And we are confident that out of this Chutka and Mahi Banswara, we will be — definitely be completing 2,000 megawatt out of these 2 projects. And there is one more in source [Indecipherable] this is part of our fleet mode as government of India has already identified them. So these are going to be of the same vintage, same design and same category that is PHWR, which is almost indigenized and we’ll be working jointly with nuclear power proportions with JV. So I don’t see any reason not to achieve. So by 2032, we’ll have 2,000 megawatts of capacity as planned from nuclear.

Apoorva Bahadur — Goldman Sachs — Analyst

Okay, sir. So nothing beyond these 2?

Ujjwal Kanti Bhattacharya — Director, Projects

As Director of Finance already told, we have already identified 1,400 megawatt project at Chutka 2×700 and 4×700 in Mahi Banswara. So already 6 units of 700 megawatts are lined up. Now these 4,200 megawatts will be completed within 2035, that is my anticipation. And as we have already entered into this, we’ll be progressing. And as — see, it’s far too long to decide about the plan in 2050. But my anticipation will be by 2050, we’ll have around 20,000 megawatt capacity in NTPC from nuclear.

Apoorva Bahadur — Goldman Sachs — Analyst

Okay. Understood. Sir, second, I think there was this concern around nuclear, especially on the liability clause, right, post the deal happened. So has the government provided any comfort over there? Would there be any limit to NTPC liabilities over here?

Jaikumar Srinivasan — Director of Finance

See, the liability clause, we are working with government and the nuclear power proportion is already comfortable with these, we are talking to them. And I don’t think this is going to be any kind of problem for us. Problem is not with the developer alone. The problem is EPC contractors, they want a problem. They want to get some kind of shelf. In case of this fleet more, we are comfortable because we don’t have any specific EPC foreign vendors here. That’s the advantage we have.

Apoorva Bahadur — Goldman Sachs — Analyst

Okay, sir. And then typically, nuclear, I mean, these plans will be under the cost-plus model like our thermal portfolio?

Jaikumar Srinivasan — Director of Finance

It is typically prices — tariff is decided by, I mean, decommissioned by their set rules and INR7.36 per kilowatt hour, for unit which DF have said. You must be knowing this is a 68% availability factor. Now if we increase it to 80%, if we can manage to that, the tariff will come down. Other advantage is [Indecipherable]. it would be a much — it’s a single part tariff, correct?

Apoorva Bahadur — Goldman Sachs — Analyst

Sorry, sir, you’re saying something on advantage of nuclear.

Jaikumar Srinivasan — Director of Finance

Yes. I was just adding that single part tariff and a must-run plan, so it ranks high in the merit order.

Apoorva Bahadur — Goldman Sachs — Analyst

Understood, sir. Very useful. So just one, I think, maybe more a bookkeeping question. If you can share the late payment surcharge number for the quarter and 9 months. That would be very useful.

Jaikumar Srinivasan — Director of Finance

Yes, the late payment surcharge for Q3 was INR67 crores. So that makes it INR459 crores for the 9 months. Understandably, the trend of late payment surcharge all across our sector is going down because of stringent payment conditions, security mechanism and also the late payments such as rules. However, one should understand that late payment surcharge is not a main source of income. It’s incidental if these are more of a deterrent rates of recovering the financial cost. So the low trend is in one sense indicative of a better collection efficiency.

Operator

We have the next question from the line of Girish from Morgan Stanley.

Girish Achhipalia — Morgan Stanley — Analyst

I wanted to understand a little bit on the renewable side. So this 4,718 gigawatts, which we have under construction and the 36 gigawatt under feasibility and planning. I just wanted to understand what — how would the run rate pan out in the next few years? That’s the first question.

Jaikumar Srinivasan — Director of Finance

Yes. I’ll just give you a broad picture, and then I’ll hand over to the CEO of NREL. The 60-gigawatt strategy would be that 40 gigawatt would be through tariff-based competitive bidding, which would include some kind of bundling to 24 hours RTC power also. 5 gigawatt would be targeted through CPSU scheme, wherein 3.7 gigawatt is already won in the bidding process. 15 gigawatt is broadly earmarked for non-PPA wherein 5 gigawatt, we have plans for flexibilization. We have already have internal approvals of 1 gigawatt rolling non-PPA linked project. Merchant would be another 5 gigawatt plan, and we are also targeting the commercial and industrial consumers, including battery energy storage scheme, which would be 5 gigawatt client. And besides that 5 gigawatt would be broadly through the hydrogen space.

So for a little more detailing, I would request Mohit Bhargava, our CEO, to add on.

Mohit Bhargava — Chief Executive Officer, RE Limited

I think most of the points have already been told by Mr. Srinivasan. So I think you asked about run rate. Run rate would obviously — I mean, that’s a simple math. We could look at about 5 to 6 gigawatts starting some time up to 1, 1.5 years once when we hope all these issues regarding module supply and everything are sorted out. So that’s the broad thing. Otherwise, the details have already been shared by Mr. Srinivasan.

Girish Achhipalia — Morgan Stanley — Analyst

Sorry. Just wanted to check whether land is already tied up for almost 70%, 80%? Or like how comfortable we are at land right now?

Jaikumar Srinivasan — Director of Finance

So we are in the process of tying up land, Girish. It’s a continuous process. We have already tied up in Gujarat. We have some land in MP. We are in the process of tying up more in Karnataka and Rajasthan. So that’s how we are proceeding.

Girish Achhipalia — Morgan Stanley — Analyst

Just on capex, if you could help us, the total capex and then broken up into various subs, JVs and for this year and next year and also coal capex, if you can just provide that data for fiscal ’23.

Jaikumar Srinivasan — Director of Finance

Specific to RE or overall?

Girish Achhipalia — Morgan Stanley — Analyst

Overall sir, and the breakup.

Jaikumar Srinivasan — Director of Finance

Yes. So for — as I mentioned in the beginning, for the financial year ’22, ’23, the capex projection is INR23,382 [Phonetic] crores. And over the next 3 years, we have of INR26,000 crores in ’23, ’24, followed by INR22,484 crores in ’24, ’25 and INR24,957 crore. So these are broad numbers. So on an average, it would be close to INR25,000 crores per annum.

Girish Achhipalia — Morgan Stanley — Analyst

And for subs and JV, sir? And any renewable capex here, if you could provide any data around subs, JVs, renewables.

Jaikumar Srinivasan — Director of Finance

Well, I don’t have a breakup. This was on our NTPC stand-alone basis. We really don’t have a captured figure here on the renewable should be implemented through the subsidiaries. But I’ll just check whether we have a broad — okay. We’ll follow it up with that later. We’ll give you the details to you.

Operator

We have the next question from the line of Anuj Upadhyay [sic] from HDFC Securities.

Anuj Upadhyay — HDFC Securities — Analyst

This is Anuj Upadhyay from HDFC. A few bookkeeping questions, sir. One is on what has contributed to a rise in other expenses and the employee expenses for the year. And you referred to a decline in the JV and subsidiaries pocket. This is to the tune of INR400 crores to INR500 crores. Is it purely attributable to the lower — low payment surcharge income? Or is there anything else which has contributed to this?

Jaikumar Srinivasan — Director of Finance

I’ll give you account of that with regard to subsidiary, it has gone down by INR102 crores. And for JV, it has gone down by INR374 crores. Now as far as the subsidiary is concerned, out of INR102 crores decline, one of the subsidiary the THDC is INR126 [Phonetic] crores. And that’s due to LPS reduction by INR250 crores. So a significant part of — a significant contribution is because of the decline in interest, but there could be some other reasons in terms of data discounting — impact of the data discounting and accounting entry, which we had to do for discounting of receivables.

So on account of that, also, there has been some iterates. As far as JV is concerned, again, NTPC Tamil Nadu NTECL, there is a decline by INR173 crores. Again, the entry is INR237 crores due to debtor discount and decrease in surcharge by another INR100 crores. So INR337 crores is on account of adjusting totality. But out of that, NTPC share is INR168 crores. So these are the major listing. I — there could be some reduction on account of some forced outages under recovery in other subsidiaries. Meja, for instance, a INR70 crores decline is due to operational leases. And as already I had said about HURL, it has gone down to INR76 crores.

Anuj Upadhyay — HDFC Securities — Analyst

Fine, sir. And the reason for high other expenses and employee expenses for the quarter, sir.

Jaikumar Srinivasan — Director of Finance

Employee expenses?

Anuj Upadhyay — HDFC Securities — Analyst

Other expenses.

Jaikumar Srinivasan — Director of Finance

No, I think these details are already given that the increase in other expenses by INR2,674 crores. That significant reasons are being — the exchange rate variation has gone up by INR1,783 crores. Cash utilization and marketing expense were INR483 crores. R&M expenses is INR239 crores because there was more outage and more overall that we were done during this quarter. Interest to beneficiary INR69.06 crores. Electricity duty commensurate with the sales has gone up by INR55.61 crores. Stores consumption is INR40.71 crores, security expense has gone up by INR20 crores, insurance by INR16 crores, rent by INR13 crores, advertisement INR11 crores. And there is a decrease in the provision for arbitration by around INR60 crores. So net-net base is INR2,674 is the increase.

Anuj Upadhyay — HDFC Securities — Analyst

Fine, sir. And lastly, sir, can you mention how much do we plan to raise through the monetization across the renewable deal? I don’t want the percentage, but at least the quantum which we are trying to raise through this monetization plan.

Jaikumar Srinivasan — Director of Finance

No, we can’t hazard a guess, as far as the quantum is concerned, we are contemplating offloading some very minor shades up to — between 10% to 20%, depending on the response. So it would be difficult to — and it will not be appropriate also to give an expectation here when the bidding process is on within the board.

Operator

We have the next question from the line of Dhruv Muchhal from HDFC Mutual Fund.

Dhruv Muchhal — HDFC Mutual Fund — Analyst

Sir, in the note store accounts, there is a mention of ash transportation related some charges after the CRC order. So is there an impact on the financials because of this and also a recurring impact going ahead?

Jaikumar Srinivasan — Director of Finance

No. In fact, we were provisionally accounting for this under regulatory income. However, when the final orders has come from CRC, there is an accounting change that we are booking it under revenue rather than the regulatory income. So to that extent, there is a reversal in that account rate. So it has helped to improve the PBT. But the differential — the PAT would remain the same.

Dhruv Muchhal — HDFC Mutual Fund — Analyst

So it improves the cash flow collection, earlier we’re not billing to the discounts, now you are able to bill it to the discounts?

Jaikumar Srinivasan — Director of Finance

Absolutely, yes.

Dhruv Muchhal — HDFC Mutual Fund — Analyst

And sir, the second question, but it has no financial impact. The order is in line with what we are provisioning.

Jaikumar Srinivasan — Director of Finance

Order is fairly in line with our [Indecipherable].

Dhruv Muchhal — HDFC Mutual Fund — Analyst

And sir, the second question is there were some reports that the…

Jaikumar Srinivasan — Director of Finance

Added to that, that we have — the add-on is that there is a interest carrying cost on that, which we have.

Dhruv Muchhal — HDFC Mutual Fund — Analyst

Okay. Sure. And sir, the second is there were reports that the government is likely to offer you gas at probably discounted rate or some reimbursement driven rates so that you are able to operate your gas plants. I believe that is for peaking power support. So sir, is there some further development to it? This I’m asking in context because there were some earlier news that some of the discounts wanted to surrender the PPAs as they expire for the gas plants. So can there be some hope to further extension to these PPAs?

Jaikumar Srinivasan — Director of Finance

This matter is under discussion from the point of view of addressing the expected increase in the demand — but however, there are no definitive numbers, I can give at this particular point of time. But definitely, in order to cope up with the picking demand, that could be one of the alternatives. The government is asking deal to supply gas at a reasonable rate, the discussions are still going on. So hopefully, in the next 10 days it will certify.

Dhruv Muchhal — HDFC Mutual Fund — Analyst

Sure. And sir, just technically, how does this work? So for example, do you still — if you have to provide peaking support from a gas plant, do you have to run this 24/7 at some minimum load so that the peaking power can be provided or you can go from 0 to whatever levels you want? I mean, whatever the demand level is depending upon the request from discounts?

Jaikumar Srinivasan — Director of Finance

These gas plants, even now we are providing peaking power, they are normally run on peak load hours. They can immediately start go to full order in 25 minutes. So they can run for 2, 3 hours and again stop them. This in a open secure ways.

Operator

We have the next question from the line of Puneet from HSBC.

Puneet Gulati — HSBC — Analyst

Can you give some update on what all plans should we expect to commission in FY ’24?

Jaikumar Srinivasan — Director of Finance

So far as — some on power projects are concerned in FY ’24 bar 660 megawatt unit 3. North Karanpura unit 2, 660 megawatt, Telangana Unit 2, 800 megawatts and RE projects of the order of 735 megawatts, total 2,855 is the capacities in target for FY ’24.

Puneet Gulati — HSBC — Analyst

Okay. Just — and that’s what I said the target was a bigger number than…

Jaikumar Srinivasan — Director of Finance

I’ll tell you, this is the — this intimation [Phonetic] is stand-alone with RE projects only. If we go for BIPCL, which is our international project, where we have already added 660 megawatt, we’ll add another 660 megawatt in FY ’24. Then NREL is expected to bring around 2,300 megawatts. And DHTC is expected to add 1,000 megawatts. So if we take this almost 4,000 megawatt capacity addition with NTPC stand-alone. Our total capacity addition as a group will be 6,810 megawatts.

Puneet Gulati — HSBC — Analyst

Got it. And if you can share the dividend income for this year at Malkan [Phonetic] district?

Jaikumar Srinivasan — Director of Finance

Dividend income from JV for 9 months is INR710 crores and from subsidiary it is INR336 crores. And — so total is INR1,053 crores.

Puneet Gulati — HSBC — Analyst

And what is the capex spend in the 9 months on the standalone part?

Jaikumar Srinivasan — Director of Finance

Standalone of capex target was INR22,300 crore approximately, we are at 84%.

Operator

We have the next follow-up question from the line of Nikhil Abhyankar from DAM Capital.

Nikhil Abhyankar — DAM Capital — Analyst

Thanks for the opportunity again, sir. Sir, I wanted to understand whether the revision in energy charges due to great slippages affect our profits?

Jaikumar Srinivasan — Director of Finance

What was the question?

Nikhil Abhyankar — DAM Capital — Analyst

Does the revision in energy charges due to great slippages, affect our profit?

Jaikumar Srinivasan — Director of Finance

It has not done anything this year. So if it’s a generic question, whether the great slippage will reduce your energy charges. Is this what you’re saying?

Nikhil Abhyankar — DAM Capital — Analyst

Yes, sir.

Mohit Bhargava — Chief Executive Officer, RE Limited

See, it’s not — energy fares are not calibrated in the — energy fares are based on the grade that we translate the MT minus. So if there’s any dispute, the referee sample [Phonetic] is raised and whatever the referee results are, that will be taken care. So it can increase or decrease, it remain same. To that extent energy caps can be revised.

Jaikumar Srinivasan — Director of Finance

Just to add to that, the calorific content could be different in different grade of coals. But your energy — the pass-through in the tariffs is determined by the norms that is there for heat rate. So if you’re using interior — exterior grade of coal, you will be requiring more quantity of coal. So that adjustment mechanism is settlement.

Mohit Bhargava — Chief Executive Officer, RE Limited

I will clarify, great slippage has no roll in our energy charge. Our energy charge is calculated based on the GCV what we receive at our site. So there is no roll-off in grade slippage in ECR.

Nikhil Abhyankar — DAM Capital — Analyst

Okay, sir. Understood. And just to check on Tapovan Vishnugad power plant, how much have we spent? And what is the way ahead over there?

Jaikumar Srinivasan — Director of Finance

Tapovan Vishnugad, you must be aware that pursuant to government — I mean, state government order on 5th January due to subsidence, which has come out in Jaisalmer. We have stopped construction activities at the project. And we are awaiting government clearances. Meanwhile, some PLI has been filed in the Nainital High Court, and the High Court has taken cognizance and they have set the next hearing date, I think in the month of May, 22nd May. We are pursuing the government as well as the other authorities to come out of this and have an early hearing so that we can start construction. This is so far as the status of the project is concerned. And the expenditure is concerned, I think we have spent around INR5,800 crores, roughly INR6,000 crores as on date. That includes IDC, IDC everything.

Operator

We have the next follow-up question from the line of Apoorva Bahadur from Goldman Sachs.

Apoorva Bahadur — Goldman Sachs — Analyst

Sir, you provided the breakup for the renewable capacity addition plan, I apologize I missed that. Can you please repeat?

Jaikumar Srinivasan — Director of Finance

Renewable capacity addition plan, you want me to repeat?

Apoorva Bahadur — Goldman Sachs — Analyst

Yes, sir.

Mohit Bhargava — Chief Executive Officer, RE Limited

[Indecipherable] 735 NTPC and 2,300 is NREL about 3,000 megawatt of capacity.

Apoorva Bahadur — Goldman Sachs — Analyst

Right. So the remaining for that 60 gigawatts you had — I think you had validate 40 gigawatt will be bid based and the remaining will be open. So break up for that, if possible?

Jaikumar Srinivasan — Director of Finance

That’s a broader picture perspective plan that 40 gigawatts, I had mentioned that we hope to reach 60 gigawatts RE capacity by 2032. And that contribution of the 40 gigawatts coming from tariff competitive bidding. 5 gigawatts of that would be from CPSU, and 35 gigawatts through tariff-based competitive bidding. 15 gigawatt is — will not be tied up on a long-term basis. It’s more on 5 gigawatt will be merchant. 5 gigawatt, we are planning through commercial and industry consumers. And 5 gigawatt through flexibilization plan. Remaining 5 gigawatts of hydrogen fuel cells, green hydrogen blending with PNG, green methanol, et cetera.

Apoorva Bahadur — Goldman Sachs — Analyst

Okay, sir. So the flexibilization is mainly with storage?

Jaikumar Srinivasan — Director of Finance

Not audible, please?

Apoorva Bahadur — Goldman Sachs — Analyst

So the remaining 5 gigawatt of flexibilization, which you stated, that is with storage, right, with battery and pump items?

Mohit Bhargava — Chief Executive Officer, RE Limited

Flexibilization is part of the scheme which Government has noted for end [Phonetic] wherein we replace the thermal power within the day by solar power. So that is a flexibilization scale we are taking.

Jaikumar Srinivasan — Director of Finance

So wherever the thermal — variable cost are on a higher side, this is an attempt to replace that variable cost of thermal by a cheaper solar power during the daytime. Actually NTPC has been given a target by government of India. 12 gigawatt of renewable capacity to be established for flexibilization purpose, which will replace high-cost solar — thermal power plant during the daytime. So since NREL also will be participating and that we have invited, we have already initiated a process for inviting grid of around 2.5 gigawatt this year. And NREL is going to participate in that bid and RECs or bid provide a big services they are providing. So NREL — we’re expecting that under that scheme, that is not only NTPC, NTPC, NLC and other CPSUs who are having the coal capacity, they are supposed to invite bid this purpose. So this 5 gigawatt will be expected to be set up through that group.

Operator

As that was the last question for today, I would now like to hand the conference over to the management for closing comments. Over to you, sir.

Jaikumar Srinivasan — Director of Finance

Thank you very much for your participation in this conference call. I on behalf of my colleague directors and the entire team would like to thank you for your participation and very pertinent questions. And wherever there is any additional information needed as told during the meeting, we will follow it up. Thank you so much.

Operator

[Operator Closing Remarks]