With over thirty years in the power sector, Suresh Kumar Narang, CEO, Nabha Power Ltd, has witnessed India’s energy evolution first-hand. In an exclusive interaction with INFRASTRUCTURE TODAY’s Manish Pant, he explains that as the country ramps up investment in clean energy technologies through a calibrated strategy, thermal power will remain a vital link in the energy transition. Few understand this better than Narang, whose recommendations on tariff-based competitive bidding have long been embedded in the national policy framework.
Since commissioning in 2014, how have Rajpura’s design attributes and commercial agreements contributed to reliable and affordable power delivery?
Punjab was facing acute power shortages from early 2000 due to the rise in agricultural demand and industrial growth. Under the Case 2 bidding framework, PSPCL (Punjab State Power Corporation Ltd) secured land, coal, water and approvals, then tendered the project. L&T won the bid in 2009, signed a 25-year power PPA (power purchase agreement) in 2010 and commissioned the plant on schedule. We adopted supercritical technology through a joint venture with Japan’s MHI (Mitsubishi Heavy Industries) and built the turbines and boilers at our manufacturing facility at Hazira, Gujarat. Over 90 per cent of the plant was delivered using L&T’s in-house EPC (engineering, manufacturing, and construction) expertise.
Over the years, we have built a robust talent pool of power plant engineers. We recruited industry veterans and fresh engineers, training them in supercritical technology while instilling the L&T culture and value system, as exemplified by L&T Group Chairman SN Subrahmanyan, Nabha Power Ltd Chairman DK Sen and the board members. This ensured operational rigour from day one. We are contractually required to maintain 85 per cent annual availability of the plant. We have never dropped below that and reached 95.4 per cent last year, which is among the highest in the country.
Amid coal shortages and surging demand, how have you sustained high operational performance in terms of plant availability factor and plant load factor?
Coal sourcing remains a challenge in India. Many private plants struggle due to inadequate linkages. As part of our agreement, we have around 5.2 million tonnes of annual coal linkage, but that doesn’t fully meet our requirement, especially when targeting high availability and load factors. We have bridged the gap with alternate coal sources, such as commercial coal, flexi coal transferred from PSPCL’s quota, and imported coal on a need basis. A dedicated fuel team coordinates closely with Coal India, monitors loading at their sites, and works closely with Indian Railways to ensure uninterrupted delivery. Coal quality is critical. Our teams continuously engage with field officers to secure better grades within the existing framework. Materialisation from Coal India averages around 80-90 per cent, and we manage the remainder through approved mechanisms under a regulatory committee. Importantly, domestic output has improved, and we haven’t used imported coal in the last three years, helping contain generation costs for PSPCL.
You have faced disputes with PSPCL, including some requiring Supreme Court intervention. Has this shaped your long-term strategy?
We have always upheld the sanctity of the contracts. One long-running dispute involved coal washing regulations for coal transport beyond 1,000 km. As required, we appointed contractors to wash and re-transport coal, an additional cost recoverable under our PPA. This pass-through was contested but ultimately settled by the Supreme Court in our favour. The judgment reinforced the contractual intent and tariff framework that governs the sector. A few other issues are pending, but the bulk of the litigations are behind us. Crucially, these disputes haven’t disrupted day-to-day operations. We are Punjab’s lowest-cost power producer, and PSPCL schedules us first. Our load factor is the highest in the state for over a decade. During the four-month paddy season, we have always generated full capacity. Payments are timely, and operational relations with PSPCL are excellent.
You had earmarked around Rs.8 billion for an FGD (flue gas desulphurisation) system. Is commissioning still on track?
The government introduced new sulphur dioxide norms in 2015, mandating FGDs for thermal plants. The deadline has been extended multiple times and is now set for 2029. We began work early and awarded the order in 2019 after competitive bidding. From our standpoint, it’s a clear change in law under the PPA, and the entire cost should be recoverable. PSPCL disagreed, leading to litigation before the state regulator and the Appellate Tribunal for Electricity. The Appellate Tribunal ruled in our favour. PSPCL has since appealed to the Supreme Court. The tariff recovery formula has been finalised by the Punjab State Electricity Regulatory Commission, but it can’t be implemented until the leave is granted by the Supreme Court. We have filed urgent applications for an expedited hearing. Commissioning also requires limestone procurement, which must be jointly handled with PSPCL.
You mentioned Punjab’s consumption doubling compared to the national average. What consumer segments will drive future demand?
Last year, power demand in Punjab saw a growth of around 11 per cent, which is almost double the national average. Several factors are at play. Punjab’s relatively affluent population is driving domestic and commercial consumption, the power subsidy scheme has boosted demand, and a new industrial policy is expected to spur it further.
If this momentum holds, the state could face a shortfall. Imports from other regions are capped at about 10,000 MW. This year, the peak demand hit 17,000 MW, and by 2036 it is forecast to reach 27,000 MW. Meeting this will require new capacity additions. CEA (Central Electricity Authority) recommends a balanced approach: building some plants near coal sources or pit-heads to reduce transport costs, and others closer to demand centres to ease grid constraints. Specifically for Punjab, the report by CEA calls for 2,400 MW of new thermal capacity.
What are the prospects for putting up an additional 800 MW unit at Rajpura? What’s the commissioning outlook?
It depends on PSPCL and the Punjab government’s intent to expand capacity. Since 2015, no new thermal units have come up, even as the demand has risen. The state recently announced plans for three 800 MW units: two by PSPCL at Ropar, and one in the private sector. We have started preparatory steps, including securing terms of reference for environmental studies. Our Rajpura site can accommodate a third unit without acquiring additional land, water, or railway infrastructure, offering clear cost and time advantages. We are actively engaging with government stakeholders and awaiting a green signal from them.
You have invited bids for 438,000 tonnes of biomass pellets. Do you see demand for biomass accelerating across thermal plants in India?
Our order is part of a larger push to address the issue of stubble burning and pollution. CAQM (Centre for Air Quality Monitoring) had directed the Delhi-NCR-based thermal plants to blend biomass pellets with coal. NTPC led the early trials, and the mandate was extended to private players like us. Last year, the minimum blending requirement was 3 per cent. This year, it’s 5 per cent. Though the supply chain is still maturing, we met last year’s target and are currently achieving around 5 per cent daily. Biomass co-firing supports decarbonisation, but it involves costs, especially efficiency loss. While pellet costs are passed through under the PPA, we have petitioned the Ministry of Power and the regulator for compensation linked to performance degradation. Those discussions are underway.
With the Ministry of New & Renewable Energy recently announcing that India now sources 50 per cent of its installed capacity from non-fossil fuels, what strategic role do you foresee for mega thermal plants like Nabha Power in the clean energy transition?
That milestone reflects installed capacity, not energy supply. Coal still generates about 74 per cent of the electricity consumed nationwide. Therefore, we have a clear role in this mix. A recent report by the Centre for Science and Environment ranked us as India’s most efficient supercritical plant, with the lowest auxiliary power consumption. That translates to lower coal use per unit, and therefore reduced emissions. We are pushing for more efficiency through variable frequency drives in key systems, increased biomass co-firing, and a captive solar project nearing commissioning. We have proposed additional floating solar on our water reservoir and remain open to pursue future technologies, such as ammonia co-firing and CCUS (carbon capture, utilisation and storage). We have planted more than 200,000 saplings on our campus, reduced diesel usage, and introduced electric vehicles on-site. These are incremental but intentional steps toward environmental responsibility without compromising reliability.
Reflecting on your four decades in the sector and your role in tariff-based competitive bidding, how do you view the evolution of generation practices in India?
I joined NTPC in 1984, starting at project sites and later moving onto commercial and consulting roles. India’s installed capacity back then was around 40,000 MW. It’s over 475,000 MW today. Thermal has powered that expansion. Unit sizes scaled from 210 MW to 500 MW, then 660 and now 800. The sector was initially state-controlled, but reforms began in the 1990s. The Electricity Act of 2003 was a turning point; it opened up generation to private players and introduced tariff-based bidding. I was part of India’s first such project at Anpara, working with NTPC Consulting, Management Consultants and legal experts to draft the commercial framework. That set the precedent for future bids.
The reforms brought in new manufacturers like L&T, GE, Toshiba and Hitachi, expanding beyond BHEL. There have been some setbacks due to stranded coal projects, inadequate coal linkages and project execution challenges and also some aggressive bids by the developers. Things have now improved after the resolution of several projects in the NCLT (National Company Law Tribunal) and lending institutions, etc. Private players are now returning, and valuations are recovering. The long-term imperative is clear: leverage domestic coal, make it cleaner, and adopt technologies suited to India’s realities. Global models, based on different fuel mixes and supply chains, aren’t easily replicable here.
Are generation companies now better at balancing cost efficiency and technology?
We have seen both extremes. In previous bidding rounds, some developers offered aggressive tariffs, without fully evaluating costs and risks. Many ran into trouble. Others took a more measured path. Prudent risk management helped them weather volatility. In the recent bidding round, around 10 GW of projects have been awarded under TBCB (tariff based competitive bidding), with pricing levels that appear reasonable when factoring in the inherent risks of developing greenfield projects. All the new projects are likely to incorporate highly efficient ultra-supercritical technology, which would also lead to a lowering of carbon emissions.
As a graduate of Punjab Engineering College and participant in executive education programmes at LBS and Harvard, how do you see the CEO’s role evolving globally?
While the Harvard programme was conducted by Harvard Business School professors at L&T’s campus, the senior executive programme was at the London Business School campus. L&T has a comprehensive seven-step leadership programme, and international exposure is the key component of this framework. In today’s environment, the power-sector CEO must be deeply attuned to global megatrends and shifts in the energy landscape, while also balancing sustainability.
Whether it’s supply chain disruptions, regulatory changes or technological pivots, agility is vital. India is investing in renewables, green hydrogen, small modular reactors, and boosting domestic manufacturing in the renewable sector. The transition must be well-paced. Thermal will continue playing a key role until storage and grid technologies mature. Energy independence is non-negotiable. Other countries that heavily rely on the import of coal and oil to meet their power needs have faced enormous challenges due to geopolitical volatility. India has rightly chosen to leverage its domestic coal reserves for energy security. CEOs in this space must guide their organisations toward self-reliance and sustainability. It’s no longer just about operating plants; it’s about anticipating
what’s next!
Nabha Power Ltd: Powered Up!
- Founded: Since April 2007, NPL operates a 2×700 MW supercritical thermal plant at Rajpura, Punjab.
- Operationalisation: Delivering reliable baseload power across the region from February 2014.
- Market: All output supplied to Punjab to meet over 25% of the state’s demand under a long-term PPA.
- Performance: With a PLF of nearly 73% in FY2024-25, it outperformed the national coal average of 68.44%.
- Cost-Competitiveness: Ranked top on the merit order, it offers Punjab’s most cost-efficient thermal electricity.
- Technology: Smart controls, digitalisation, and lean operations drive sector-leading performance.
- Accolades: In July 2025, CSE named it India’s most efficient supercritical plant, with the lowest auxiliary consumption.