Sterlite Energy aborts thermal plant extension unit

Though the company has not given any reason for backing out, the coal shortage for new projects is believed to be the reason
yogindra mohan

Patiala

Sterlite Energy has aborted the extension unit of 3x660 megawatt (MW) thermal project at Talwandi Sabo by not seeking extension to the memorandum of understanding (MoU), mainly due to the coal linkage problems to new projects. Sources in Punjab State Power Corporation Limited (PSPCL) said that Punjab government had given nod on August 25 last year 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. Sources said that Sterlite Energy bagged 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 the firm could sell 85 per cent of power produced in the open market.

Though the company has not given any reason for backing out, the coal shortage for new projects is believed to be the reason. The company cannot run the unit economically on imported or blended coal and then sell the power in open market. 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 the project 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 the remaining two units are scheduled to be completed by 2014.

The coal linkage to new projects is a major problem that the Coal India is facing due to acute coal shortage. Even the existing units are having coal shortage problem. The running of units with 30 per cent 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. As per an estimate,

Punjab will face a deficit of 5361 megawatt (MW) of power by March 2012. Even the state’s Economic Survey report has pointed out that the peak unrestricted demand is about 9400 MW which is likely to rise to 11000 MW in the next two years.