The Hindu Business Line : NTPC Kayamkulam plant remains non-operational

THE 350-mega-watt (MW) thermal power plant of the National Thermal Power Corporation (NTPC) at Kayamkulam in Kerala's Alapuzha district remains shut down for the past five months for want of takers of power.

The Kerala State Electricity Board (KSEB) had stopped lifting of thermal power right from the onset of the southwest monsoon. Following abundant rains in the catchment areas of the State's hydel projects, the KSEB has been managing with its hydel resources by drawing power from the central grid to meet the demand of around 33 million units a day.

The decision has helped the KSEB to make a substantial saving on power cost and hence, it is planning to go without thermal power as far as possible, board sources told Business Line. In fact, the Kerala Government and the NTPC, at the time of setting up of the plant, had entered into an agreement that the entire power generated here would be supplied to Kerala.

KSEB sources said that the board had to resort to such a step, as the cost of power generated by the naphtha-based thermal plant was exorbitantly high.

Meanwhile, the Tamil Nadu Electricity Board, which had agreed to lift 50 per cent of the power from Kayamkulam, had also stopped taking it, following some dispute over the transportation charges demanded by the KSEB, NTPC sources said.

Consequently, the power plant had to be shut down and if they came forward with a demand, the plant would commence power generation, they said. However, even without supplying any power, the NTPC is being paid Rs 18 crore a month by both the State Governments, under an agreement towards fixed costs.

Given this situation, there are apprehensions that the NTPC might not go ahead with the expansion of the Kayamkulam plant by 1950 MW in the next plan by shifting to liquefied natural gas (LNG) as a fuel.

The main reason for this apprehension is that the NTPC had made it clear that "unless gas is priced at around $3 (about Rs 135) per million British thermal units (mmbtu), the cost of power will soar, making it unviable for State electricity boards to purchase power." Against this, the price of LNG from the proposed terminal to be set up here by the Petronet LNG is expected to be above $4 (around Rs 180) per mmbtu, PLL sources pointed out.

Given this situation, the NTPC would have to set up its own terminal close to the plant to make available LNG at around $3 per mmbtu, they said. Therefore, the expansion of the Kayamkulam plant would depend on availability of LNG at around $3, on the one hand, and regular takers of power from the plant after its expansion, on the other.