Aravali Power Company Private Limited (APCPL)

Overview of APCPL Operations

 APCPL is a joint venture with NTPC Ltd holding a 50% stake, Haryana
Power Generation Company Ltd (HPGCL) 25%, and Indraprastha Power
Generation Company Ltd (IGCL) 25%.
 APCPL operates the 3x500 MW coal-based Indira Gandhi Super Thermal
Power Project.
 During FY 2023-24, APCPL achieved a total generation of 8284.82 Million
Units (MU).
 APCPL achieved a Plant Load Factor (PLF) of 62.88% and an
Availability Factor of 93.68%.

Financial Overview
 APCPL achieved a net profit of ₹496.5 in FY 2022-23 declining from
₹823 crore in FY 2021-22.
 Revenue rose significantly to ₹4,230 crore in FY 2021-22 from ₹634
crore in FY 2020-21, with a three-year CAGR of 246%.
 The company demonstrated strong financial growth, driven by
improved operational efficiency and strategic focus on revenue
generation.

Credit Risk & Financial Stability

 Counterparty Risk:
 Dependency on Haryana and Delhi discoms (92.4% of capacity) exposes
APCPL to financial instability if discoms delay payments.
 Letters of Credit and improved collection efficiency mitigate this risk.

 High Power Cost Risk:

 Landed coal costs result in a high variable tariff (₹4.09/unit in FY2023),
reducing competitiveness in the merit order dispatch.
 Regulatory mechanisms allow full recovery of fixed charges, provided
plant availability is above 85%.
 Regulatory Dependence:
 The ability to recover costs depends on meeting regulatory norms, such
as plant availability and timely FGD capex completion (due Q1 FY2025).
 Any non-compliance could lead to revenue losses or penalties.

 Liquidity and Cash Flow Risk:

 High dividend payouts (₹950 crore in FY2023 and ₹750 crore YTD
FY2024) reduce liquidity buffers despite strong cash flow generation.
 Operational Risk:
 NTPC’s technical and managerial expertise minimizes operational
disruptions and ensures regulatory compliance, reducing ERM concerns.
  Credit Risk:
 Stable financial metrics (Debt-to-EBITDA: 1.6x, Interest Coverage: 9.0x)
indicate low leverage, but ongoing FGD capex adds monitoring
requirements for cost overruns or delays.

Emissions and Regulatory Compliance

 APCPL is installing Flue Gas Desulphurisation (FGD) units to meet
emission norms set by the Ministry of Power (MoP). The project is
expected to be completed by Q1 FY2025, aligning with the revised MoP
deadline of December 2024.

Market Position and Strategic Direction

 Market Demand:
 India's electricity demand is expected to grow to 1,566 TWh by 2026-27,
driven by urbanization and industrialization.
 Thermal power will remain a major contributor, accounting for ~50% of
installed capacity by 2026-27, ensuring stable demand for APCPL.
 Competitive Landscape:
 APCPL benefits from stable revenues through long-term PPAs and NTPC’s
technical support.
 Higher coal transportation costs affect tariff competitiveness compared
to more efficient players.
 Technological Advancements:
 FGD installation by Q1 FY2025 ensures compliance with emission norms,
aligning with environmental regulations.
 Investing in digitalization and advanced process control technologies
could further enhance operational efficiency and competitiveness.
About Indira Gandhi Super Thermal Power Project
(IGSTPS)
Paramet
Details
er
Compan Aravali Power Company Pvt. Ltd. – A Joint venture of NTPC Ltd,
y HPGCL, and IPGCL
Capacit
Stage I: 1500 MW (3x500 MW) – Commissioned
y
Status Mega Power Project
Equity
NTPC (50%), HPGCL (25%), IPGCL (25%)
Sharing
Locatio Site Jharli is 35 km from Jhajjar district of Haryana and 100 km
n (approx.) from Delhi.
Haryana, Delhi, Himachal Pradesh, Jammu & Kashmir, Punjab,
Benefici
Rajasthan, Uttar Pradesh, Uttarakhand, Andhra Pradesh, Kerala,
ary
and Telangana.
Coal As on date, coal linkage made from Eastern Coalfield Ltd. &
Linkage Northern Coalfield Ltd.
Water
Make-up water from Jawahar Lal Nehru (JLN) feeder canal.
Source
Power
Through two associated 400 KV Double Circuit transmission
Evacuat
systems to Daulatabad (Haryana) and Mundka (Delhi).
ion
- Drum type subcritical boiler pressure 178 Kg/Sq cm and steam
temperature 540°C (MS) & 568°C (RH).
- KWU turbine with single reheat, having 17 stages in HP, 12x2
stages in IP, and 6x2 stages in LP.
- Closed-cycle cooling system with Natural Draft Cooling Tower.
- Water stored in two reservoirs built on 350 acres with HDPE lining;
Special
each has a storage capacity of 35 lakh cubic meters.
Feature
- 100% Dry Ash collection from ESP hoppers and disposal by High
s
Concentration Slurry Disposal system (HCSD) and dry ash system.
- Ash water recirculation system installed to re-use the ash slurry
disposal overflow water.
- RO Plant for recycling the waste water of the station to ensure
zero effluent discharge.
- The height of the chimney is 275 meters.
 Key Risks Specific to Thermal
1. Risks Mentioned in Risk Inventory

Risk Group Risk Name Risk Description

Risk of environmental degradation and loss of biodiversity due to

Environmental inadequate environmental management and monitoring practices,
Environmental &
Degradation and resulting in non-compliance with regulations, damage to
Social Risk
Biodiversity Loss ecosystems, reputational harm, and potential legal or financial
penalties.
Inadequate and/or Risk of inadequate and/or ineffective management of ash
Environmental & Ineffective utilization due to inefficient planning, lack of market demand,
Social Risk Management of Ash insufficient coordination with end-users resulting in environmental
Utilization non-compliance, financial losses and increased ash disposal costs.
Risk of non-compliance with environmental regulations and
potential reputational damage due to excessive greenhouse gas
Excessive
Environmental & (GHG) emissions, caused by outdated or inefficient power
Greenhouse Gas
Social Risk generation technologies, resulting in regulatory penalties,
Emissions
increased operational costs, and a negative impact on
organisation's sustainability goals and public image.
Risk of degradation of coal quality during prolonged storage in
Coal Stockpile
Operational Risk stockpiles due to weather exposure (e.g., rain, heat), leading to
Deterioration
reduced plant efficiency and higher emissions.
Risk of coal prices volatility due to market fluctuations, supply
chain issues, or geopolitical factors, resulting in increased fuel
Operational Risk Coal Prices Volatility
costs, pressure on profit margins, and potential financial instability
for power generation operations.
Risk of operational disruption, cost escalations, and reduced
productivity in coal mining operations due to poor coal quality,
Coal Mining
regulatory challenges, inadequate mechanization, supply chain
Operational Risk Operational
disruptions, or safety incidents. These factors can lead to higher
Inefficiencies
fuel costs, delays in fuel supply, reduced power plant efficiency,
and potential non-compliance with environmental regulations.
Risk of inaccurate Gross Calorific Value (GCV) measurement due to
Inaccurate GCV
faulty equipment or improper sampling and analysis techniques,
Operational Risk (Gross Calorific
resulting in suboptimal energy production, financial discrepancies,
Value) Measurement
and potential contractual disputes.
Risk of operational inefficiency due to inadequate maintenance,
Power Plant
outdated technology, or suboptimal operational practices,
Operational Risk Operational
resulting in increased downtime, higher operational costs, reduced
Inefficiency
plant output.
Risk of reduced generation capacity due to the ageing of power
Reduced Generation
plants, wear and tear of equipment, outdated technology and
Operational Risk Capacity of Ageing
insufficient maintenance, resulting in decreased efficiency, higher
Power Plants
operational costs, and potential inability to meet targets
Operational Risk Inefficient Water Risk of resource wastage and regulatory non-compliance due to
Management inefficient water management caused by outdated infrastructure,
lack of water recycling systems, or inadequate monitoring
mechanisms, resulting in increased operating costs, water scarcity,
 and reputational damage.
Inadequate Risk of delays or disputes in land acquisition for new power
Resolution of Land projects due to regulatory hurdles, inadequate stakeholder
Operational Risk Acquisition for engagement, or resistance from local communities, resulting in
Power Plant project delays, increased costs, and potential cancellation of
Development planned developments.
Risk of improper coal allocation to plants due to imbalanced fuel
Improper Fuel supply, underutilization of capacity at some plants, increased
Operational Risk
Allocation to Plants reliance on emergency fuel procurement resulting in operational
inefficiencies.
Risk of spontaneous coal combustion and fire incidents due to the
Absence of real time
absence of real-time temperature monitoring, resulting in
Operational Risk monitoring for
potential safety hazards for employees, operational disruptions,
temperature of coal
financial losses, environmental damage, and reputational harm.
Risk of degradation of coal quality during prolonged storage in
Coal Stockpile
Operational Risk stockpiles due to weather exposure (e.g., rain, heat), leading to
Deterioration
reduced plant efficiency and higher emissions.
Rail and Port Risk of fuel supply delays and generation disruptions due to over-
Operational Risk Infrastructure reliance on coal transportation infrastructure (railways and ports),
Bottlenecks which may face congestion or delays.
Risk of coal prices volatility due to market fluctuations, supply
chain issues, or geopolitical factors, resulting in increased fuel
Operational Risk Coal Prices Volatility
costs, pressure on profit margins, and potential financial instability
for power generation operations.

2. Other Key Risks Associated With Thermal

Category Key Risks
Emissions (CO2, SOx, NOx, Particulate Matter, and Heavy Metals):
Environmenta
Pollution from coal combustion and handling, exceeding permissible
l & Social
limits and harming health and ecosystems.
Coal Dust: Health hazards from dust generation during coal handling
and storage.
Thermal Pollution: Discharge of heated water harming aquatic
ecosystems.
Chemical Contamination: Leaks/spills of HCl, NaOH, and chlorine during
water treatment polluting soil and water.
Spontaneous Combustion: Coal stockpile fires releasing harmful
pollutants.
Unsafe Disposal of Fly Ash: Environmental hazards from improper
disposal of fly ash.
Fuel Cost Volatility: Dependence on coal exposes the plant to
Financial
fluctuating prices and supply risks.
High Maintenance Costs: Boilers, turbines, and pollution control
systems incur significant upkeep expenses.
Emission Penalties: Non-compliance with emission limits results in fines
and costly upgrades.
Accident Mitigation Costs: Fires, explosions, and equipment failures
increase operational expenses.
Legal & Emission Standards Compliance: Strict adherence to SOx, NOx, and
Compliance particulate matter emission norms.
 Waste Management: Safe disposal of ash and FGD effluent to avoid
legal penalties.
Chemical Safety: Compliance with hazardous chemical storage and
handling regulations.
Permit Compliance: Ensuring adherence to environmental impact
assessments and safety inspections.
Environmental Non-Compliance: Legal actions and fines due to non-
compliance with environmental regulations.
Boiler Hazards: Risks of high-pressure steam explosions, overheating,
Operational
and metal fatigue.
Coal Handling Risks: Dust explosions, blockages, and equipment
failures in crushers and conveyors.
Turbine Risks: Hydrogen coolant leaks in turbo generators causing
explosion and fire hazards.
Fire Hazards: LDO tank explosions and cable gallery fires.
Chlorination Plant Risks: Toxic chlorine leaks during water treatment
operations.
Equipment Failures: Boiler explosions, generator breakdowns, and poor
maintenance-related risks.
Water Scarcity: Impact on plant operations in drought-prone regions.
Fire and Explosion Risks in Coal Storage: Due to poor management and
handling.
Coal Dependence: High reliance on coal raises sustainability concerns
Strategic
and regulatory pressure.
Community Opposition: Local resistance due to environmental and
health impacts may delay projects.
Competition from Renewables: Growing adoption of solar and wind
energy threatens the thermal sector’s market share.
Policy Shifts: Stricter environmental regulations and transition to
renewable energy threatening thermal projects' viability.
Declining Demand for Coal: Reduced demand for coal-based power due
to increasing competition from renewable energy projects.
Aging Infrastructure: Risks from degradation of boilers, turbines, and
Technology
pollution control systems.
Safety System Failures: Malfunctioning fire detection, suppression, or
manual safety responses.
Automation Failures: Malfunctions in PLC-based systems for coal
handling and boiler operations.
Outdated Technologies: Leading to inefficiencies and higher emissions.
Delays in Clean Technology Adoption: Delays in implementing
technologies like flue gas desulfurization systems.