Extension unit of Talwandi Sabo thermal project aborted
Merinews.com

V K Gupta
07 November, 2011
The 660 MW extension unit of Talwandi Sabo thermal project has been stalled as the construction company is not willing to construct in view of coal shortage in country.

AFTER CLOSURE of unit 4 of Bhatinda Thermal Plant on the orders of pollution control board there is another shock for Punjab Government as Sterlite Energy has decided to abort the extension unit of 3X 660 (1980) MW thermal project at Talwandi Sabo.

It may be mentioned that the Punjab government had given its nod on August 25 last to Sterlite Energy to add one more unit of 660 MW to the upcoming thermal project of 1980 (3x660) MW at Talwandi Sabo in Mansa district through MOU route as per the provisions of Power Generation Policy 2010 of Punjab. Sterlite Energy bagged the 1980 MW thermal project comprising three units of 660 MW each at Talwandi Sabo through competitive bidding in 2008. The extension unit got through MOU route was to be operated on a merchant power basis, where it could sell the 85 percent of power produced in the open market.
Though the company has not given any reason for backing out - coal shortage for new projects seems to be only reason. The company cannot run the unit economically on imported coal/ blended coal and then sell the power in open market.
The Punjab State Electricity Regulatory Commission had admitted a petition filed by a retired PSEB engineer Gurnek Brar against the setting up of extension units at Talwandi Sabo and Rajpura thermal plants by Punjab government through a MoU. PSEB had carried out competitive bidding for the 3x660 MW Talwandi Sabo thermal power project and awarded it to the lowest bidder. A power purchase agreement was signed on September 1, 2008, and the PSERC approved and adopted this competitive bid rate of Rs 2.8643 per unit in January 2009.
The first unit is now expected by the end of next year in December 12 and balance two units in 2013-14. The coal linkage to new projects is a major problem that Coal India is facing due to acute coal shortage. Even the existing units are having coal shortage problem.
The running of units with 30 % blending of imported coal is a costly affair. Even NTPC unit at Jhajjar has been supplying power at Rs. 5.65 per unit which is not commercially viable. A senior PSPCL engineer said that even L & T may back out from unit allotted under MOU route at Rajpura thermal.