Interview -

“DVC focussing to become sustainable and profitable”

Damodar Valley Corporation (DVC) is a government aided organization which operates several power stations in the Damodar River area of West Bengal and Jharkhand states of India. The corporation operates both thermal power stations and hydel power stations under the Ministry of Power, Govt of India. Headquartered in Kolkata, West Bengal, DVC is the first multipurpose river valley project taken up by the Govt. of India and the only GOI organization generating power through three sources- coal, water and liquid fuel.

Our Corporate Editor Abul Hasan talked to P.K Mukhopadhyay – Chairman of DVC. Following are the excerpts.

Q. It's been a spectacular turnaround for Damodar Valley Corporation (DVC) with profit of Rs 19 crore in the fourth quarter ended March 31, 2018. Any Roadmap drawn up to further boost up finances in the current fiscal?

A: DVC has turned black in Q4 of 2017-18 for the first time after 15 quarters. The total annual thermal generation in 2017-18 was 35692 Million Units which is a y-o-ygrowth of 7.14 % compared to a national growth of 3.95 %. This generation translates into an annual Plant Load Factor of 56.04 % which is the highest in 4 years. We have also achieved new milestones in short term and exchange sale which stood at 2580 MU which is a threefold growth over 2016-17. On 24.04.2018 we touched our highest instantaneous generation of 5763 MW and achieved the highest single day generation of 136.44 MU. The turnaround was possible primarily due to increase in the operational efficiency of the units by adopting best O&M practices, substantial exchange/short term sale, moderate increase in demand and consistent hard work of Team DVC.

This fiscal we are focussing on a target so that our operations become sustainable and profitable. To make it a historic turnaround, Team DVC is all set to achieve this goal. Our roadmap includes more efficiency in operations, all round cost cutting, more exchange sale, reducing our surplus power and greater efficiency in employee engagement. The holistic approach adopted by us are strategic in nature which I am sure will give positive financial results.

Q. The company is looking to set up a new unit at Durgapur in West Bengal with super-critical capacity of around 600-800 MW. Is there a plan to start process for setting up the project in the current financial year?

A: Durgapur TPS is one of the oldest projects in the DVC portfolio (36 years old). Presently only one unit of capacity 210 MW is running which we intend to phase out due to technical issues and commercial non-viability. The plan to install a super critical unit or ultra-super critical unit is at its nascent stage and several rounds of technical and commercial feasibility would have to be carried out. However, a decision in this regard will depend on the demand projections in the Indian power sector and replacement plan of DVC in the future.

Q. The company hopes to achieve around Rs 2,739 crore additional revenue over and above the Rs 15,729 crore revenue it generated in 2017-18. Are there any expansion plans being drawn up to achieve the new target?

A: We are not planning any new projects this fiscal. The basis of the projections in top line growth involves better capacity utilization, incremental sale on the exchange &short term, acquiring new consumers for our surplus power and recovery of outstanding dues.Our special focus will be to increase the capacity utilization of Raghunathpur TPS (2X600 MW) in West Bengal for which we are scouting for consumers. Our power is available at affordable rates and we are also one of the oldest players in the sector. We are gradually building internal capabilities to ensure that the growth momentum is sustained.

Q. DVC has also been retiring several old capacities to move out of high-cost power generation. Are you looking at low-cost power generation by setting up a series of new projects during the next five to seven years?

A: Refurbishment and retrofitting of machines is a natural process in any organization. Our old units have served us well and has given us profitable generation. However, due to technical obsolescence and high cost of generation we need to retire them in a phased manner. Additionally, the Government has also decided to phase out thermal units which are more than 25 years old. The base load in the country will continue to be thermal power which necessitates DVC to replace old units with supercritical units which are more efficient and have low emission rates. We have enough land and water sources to build such units. However, the most important reason is the highly competitive nature of the Indian Power sector. Only those generators who can produce and sell at the lowest cost will survive. This further adds to the reasons for retiring old and inefficient units.

Q. DVC is now looking to sell power from its Raghunathpur power plant to West Bengal State Electricity Distribution Co. Ltd (WBSEDCL). Is the company planning to sell power to many more states during the next decade?

A: The cost of generation from Raghunathpur TPS (2x600 MMW) is one of the cheapest in the country and the rate is very attractive. Therefore, we are looking forward to tie up with any interested state DISCOM from RTPS and other DVC plants which have surplus power.