The Hindu Business Line : NTPC hopes to finish TN project study by Dec

The surplus power sold either to other States or to any other bulk buyer, taking advantage of the flexibility provided by the Electricity Act, 2003.

Chennai , Sept. 28

THE National Thermal Power Corporation hopes to complete all preliminary studies for its proposed project at Ennore, north of Chennai, by December.

The techno-economic clearance and feasibility reports are expected to be ready by March 2005, according to a senior official from the corporation.

It is conducting various studies covering aspects like fuel options, cost of fuel, availability of fuel and transportation cost of fuel.

These reports are expected to be ready by December end, according to Mr T. Sankaralingam, Director (Projects), National Thermal Power Corporation Ltd (NTPC).

The NTPC has engaged consultants like Crisil for the fuel options study and RITES for the transportation study. Once these reports are ready, the techno-economic feasibility will be prepared and the plant layout finalised. After that investment approval will have to be obtained. That will take another nine months and the first unit (depending upon the total size of the plant) will be ready by 2008-09.

The NTPC is executing this project jointly with the Tamil Nadu Electricity Board, for which it signed an agreement with the board in July 2002. The agreement was to set up a 1,000-MW coal-based power plant at Ennore, using the existing infrastructure facilities, with both NTPC and TNEB holding a 50 per cent stake each in the venture.

The two partners also incorporated in May 2003 a company named NTPC Tamil Nadu Energy Co Ltd to execute this project.

This project was to come up at Ennore, close to the site where Videocon was to set up a 1,050-MW coal-based project. However, after the TNEB cancelled the escrow cover granted to the Videocon project, the matter has been caught up in arbitration. The Videocon project was to use the coal handling facilities established at the Ennore Port.

The NTPC-TNEB project is expected to come up a little north of the site allocated for the Videocon project, according to Mr Sankaralingam.

NTPC, according to him, is also studying the type of fuel to be used - coal, LNG or piped gas from the Krishna-Godavari basin. Even with regard to coal, options like using domestic coal or imported coal or blending the two and the cost of doing so will be studied.

As far as gas is concerned, the cost of LNG and piped gas, if and when it is made available from the Krishna-Godavari basin, will be examined in detail.

He was talking to presspersons here after a press conference to hawk NTPC's initial public offer, which opens on October 7.

The capacity of the plant will also be decided once the studies are completed. According to Mr Sankaralingam, a capacity of 2,000 MW will be the ideal size in case LNG is the fuel for the plant.

However, the project cost would go up and thus it would be difficult for the TNEB to contribute its share of the equity. Mr Sankaralingam did not think this was an issue that would affect the project.

It may be recalled that the main purpose of TNEB getting into an agreement with the NTPC was to get all the power generated from the plant for itself.

The NTPC official said TNEB's requirements could still be met with an enhanced capacity, and the surplus power sold either to other States or to any other bulk buyer, taking advantage of the flexibility provided by the Electricity Act, 2003.

According to official sources, the Tamil Nadu Government is holding discussions with the Oil and Natural Gas Corporation for setting up an LNG (liquefied natural gas) terminal at Ennore. If this materialises, the NTPC-TNEB project could source gas from this project and the surplus gas sold to other private power projects that are now running on liquid fuel.

Another LNG project, which was bagged by a consortium led by the Aditya Birla group in a competitive bidding process, has been held up due to various reasons, including an adequate payment security mechanism. Recently, GAIL (India) Ltd expressed its intention to pick up an equity stake in this project.

The Tamil Nadu Government is hoping that at least one LNG project will materialise at Ennore as it will help in establishing a gas-based power project and also help the high-cost liquid fuel power plants being run by the private sector switch over to gas.

Experts have also suggested that TNEB could convert its coal-based plants at Ennore and North Chennai into gas-fired ones after some modifications. This suggestion was made in the light of the high landed cost of coal. However, the sources said that the Government did not want to switch all the projects to gas and would like to maintain a mix of coal- and gas-fired plants.