NTPC and IOCL ink pact to invest in green energy

National Thermal Power Corporation (NTPC), India’s largest thermal power generator has come up with an innovative joint venture with IOCL. Now, Indian Oil Corporation Limited (IOCL) is India’s leading PSU refiner and for long has been the company reporting the highest revenues. IOCL is predominantly into refining of crude and the marketing of petrol and diesel through its vast network of IOC petrol pumps and fuel stations spread across the length and breadth of India. So, what exactly is this joint venture about?

On Monday 18th July, Indian Oil has signed an agreement with NTPC for the formation of a joint venture company. The joint venture will enable meeting the power requirements of upcoming projects of the various refineries of IOCL through renewable sources. In fact, Indian Oil plans to meet additional power requirement of its refineries using round-the-clock renewable energy to the extent of 650MW via the joint venture by December 2024. Here is why this could be a template for other PSUs to also explore.

The joint venture is special because both IOCL and NTPC are legacy fossil fuel companies. One way to look at the business is to say that the legacy business is already using fossil fuels and not much can be changed. However, another way to address this issue, and that is what IOCL and NTPC are doing, is to look at renewable to power the incremental output. The joint venture will work towards setting-up renewable energy-based power plants for Indian Oil Corporation Refineries and help both the companies reduce their fossil fuel footprint.

The entire project will be executed from the NTPC side by NTPC Green Energy Limited (NGEL). Incidentally, NGEL is a wholly owned subsidiary of NTPC and is a collection of the entire green energy and renewable energy portfolio of NTPC. It is NGEL that will be at the forefront and catalyse the joint venture with Indian Oil Corporation for the supply of RE-RTC power to Indian Oil Corporation. NGEL will be an umbrella company for consolidating NTPC’s total renewable energy businesses and it may even plan a IPO in the near future.