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Anil Sasi

Targeting capacity addition of 15,000 MW to meet demand

New Delhi , Dec. 28

In a bid to promote setting up of large-sized merchant power stations, the Centre has decided to provide coal blocks and captive mines to these stations that have a capacity of over 500 MW.

Around 25 sites are being identified across the country for setting up of large merchant plants and the Centre is targeting an incremental capacity addition of around 15,000 MW from these stations over the next four years or so as an interim measure to meet power demand.

Merchant power plants

Merchant plants are power stations that do not tie up their output for a particular buyer through long-term PPAs (power purchase agreements) but instead can sell the generated electricity to any consumer on a spot basis, including distribution utilities and industrial consumers.

The Power Ministry has now called a high-level meeting of the State Power Ministers to give a fillip to these projects, where issues such as speedy land acquisition and environmental clearances to developers setting up merchant plants would be addressed, a Government official said.

Preparing reports

The Central Electricity Authority (CEA) and Power Finance Corporation (PFC) have been asked to work on preparing reports for setting up merchant power plants of 500-1000 MW size in about 25 sites. A number of coastal locations for the merchant power plants using imported coal would also be identified subsequently.

The Power Ministry, in consultations with the Coal Ministry, has already identified coal linkages that can be given to a number of such projects having capacities of over 500 MW.

"Merchant power plants would be provided coal linkage for capacity of any of the plant up to 1,000 MW. These plants may be provided coal blocks also as captive mines for capacity of any of this plant in the range of 500 - 1000 MW. Assistance would be extended in terms of land acquisition and environmental clearances and the Power Ministry will facilitate financial closure of these projects," a senior Government official said.

NTPC Ltd, the country's largest power producer, is already setting up four such merchant stations with a combined merchant capacity of 2120 MW over the next five years.

The implementation of the Electricity Act 2003 has opened up several business opportunities for power sector players, including the possibility of direct supply to large customers, retail supply, distribution and power trading.

More Stories on : Power | Policy | Infrastructure | Coal

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