Govt plans to invite bids for Cheyuur project by Jul

The government plans to invite bids for a 4,000MW coal-based power project at Cheyuur in Tamil Nadu by July in the hope of restarting its so-called ultra mega power project (UMPP) scheme, which has been weighed down by ecological concerns and local resistance.

Power secretary P. Umashankar said environmental studies for the Cheyuur project are expected to be completed by April. “We expect to start the award process by June-July,” he said.

The project will rely on imported coal, whose price, including freight charges, are prone to fluctuations. It will thus be crucial for companies to secure coal supplies to bid for the project, as movement in international coal prices would impact input cost.

The Congress-led United Progressive Alliance government wants to set up 16 UMPPs, or power projects that produce at least 4,000MW each, to meet the needs of the world’s second fastest growing major economy after China. India has a power generation capacity of 169,000MW and expects to add 62,374MW by 2012.

Nine UMPPs were originally planned, but only four have been awarded—at Mundra in Gujarat, Sasan in Madhya Pradesh, Krishnapatnam in Andhra Pradesh and Tilaiya in Jharkhand. Two projects, at Girye in Maharashtra and Tadri in Karnataka, had to be abandoned due to local resistance. The bidding process of two others, located near coal mines at Bedabahal in Orissa and Surguja in Chhattisgarh, has been delayed.

Power Finance Corp. Ltd, the nodal agency for awarding UMPPs, extended the deadline for companies to respond to the request for qualification (RFQ) for the Orissa project for a fifth time on 31 January. The new deadline for submission of RFQ applications for the Orissa project is 31 March, and 8 March for the Chhattisgarh project.

“The RFQ deadline for the Orissa project has already been extended till 31 March. We are working with the MoEF (ministry of environment and forests) to find a solution,” said Umashankar.

The power ministry is working with MoEF on a compromise that would allow coal mining to fuel the Orissa project—in an exception to the government’s so-called “no go” policy for coal miners.

In June 2009, MoEF and coal ministry announced “go” and “no-go” areas for coal miners to protect best quality forests.

Mint reported on 26 November that MoEF is ready for a compromise to allow coal mining to fuel the Orissa UMPP.

UMPPs follow a competitive tariff-based bidding in which a special purpose vehicle (SPV) is set up to reduce risk perception and increase investor confidence. This SPV takes care of regulatory requirements such as land acquisition and environmental clearances and transfers these to the winning bidder. Each project requires an investment of around R

s.

20,000 crore.

“After the award of the first three projects, the whole process has taken enormously long,” said Anish De, chief executive at Mercados EMI Asia, an energy consulting firm. “The drive which was there for the earlier UMPP award process needs to be brought back.”

Source: Govt plans to invite bids for Cheyuur project by Jul - Home - livemint.com

RPower to increase capacity of its mega projects by 50%

RELIANCE Power, the flagship company of the Anil Ambani group, plans to expand four large coal-fired power projects by 50% to generate an additional 8,000 MW of power, which may be sold at more attractive merchant rates, company sources said. 

The company will scale up three ultra mega power projects of 4,000 MW each at Sasan, Krishnapatnam, and Tilaiya. Similarly, it will expand the Chitrangi plant in Madhya Pradesh, for which Reliance Power plans to use coal from mines dedicated to the Sasan project. 

The company has already applied for environment clearance for additional 1980 MW in Sasan and plans to seek approvals for the rest. 

A company spokesman said Reliance Power would seize opportunities to maximise value from its existing resources, but he declined comment of specific expansion plans. "It is our constant endeavour to optimise the utilisation of our existing resources like land, water and fuel linkages across all our projects to create and enhance the value for our stakeholders," the spokesman said. 

In the Chitrangi project, Reliance Power has tied up power purchase agreements (PPAs) for 1,241 MW out of its 4,000 MW capacity. The balance as well as the planned additional capacity of 2,000 MW each at Chitrangi and the three UMPPs would be available for sale at market-driven price, which analysts say are more than double the rates agreed in the PPAs. 

Another official of Reliance Power said that since these projects have all approval and basic infrastructure, such as land, is already in place, it would be much easier to increase generation in the shortest period. "Had we started for a fresh projects with similar size, it would have taken much longer time,” he said. 

The company aims to commission the first unit of 660 MW in Sasan in November 2012 and one new unit every subsequent quarter. The entire project of 6,000 MW in Sasan will be fully commissioned by December 2014. Similarly, the first unit of 660 MW in Krishnapatnam will be commissioned in September 2013 and it will be fully commissioned by December 2015. 

As per the new plan, each of these four power projects (three UMPPs and Chitrangi) will have nine turbines of 660 MW each, the official said. 

In November 2010, the company placed orders worth $8.2 billion with Shanghai Electric Corporation for buying 42 super critical turbine of 660 MW each, each turbine costing around $200 million. Of this, 36 turbine will be installed in these four projects.

Source: Article Window