News Detail

India's biggest power generation utility NTPC is seeking to revive its 4,000MW coalfired thermal power plant nearly four years after the INR 24,000 crore project was proposed, providing a shot in the arm for the power-starved state of Andhra Pradesh. Truncated Andhra Pradesh, which came into being on June 2 after Telangana was carved out, owns a majority of the combined state's power stations based on geographical location but it was allocated less power based on a consumption track record formula.

Though truncated Andhra Pradesh owns over 60 Percent of combined state's power generation assets of 16,465MW, it was awarded 46 Percent of capacity. Moreover, nearly 6,000MW of capacity belonging to independent power producers (IPPs) is lying idle for want of gas supplies. The state government is now contesting the contentious allocation formula by cancelling power purchase agreements signed with the distribution companies. A delegation of the senior NTPC executives met the chief minister N. Chandrababu Naidu recently seeking his support to relocate the proposed 4,000MW project from Nakkapally to Pudimadaka near Gangavaram port on the east coast.

Confirming the meeting, a senior bureaucrat, "Keeping in view the current power situation in the state and also the need for more generation to attract large industrial investments, the chief minister has sought entire power of 4,000MW for the home state." NTPC had in December 2010 agreed to supply 50% of the power produced from the proposed 4,000MW project. However, state power ministry officials are now hopeful of retaining the entire power because the ruling Telugu Desam Party shares  power at the centre as well. During his tenure as chief minister of the undivided state between 1995 and 2004, Naidu had managed to secure the entire production of 1,000MW of NTPC's first phase of coal-fired power project at Simhadri near Visakhapatnam.

Though NTPC had entered into power purchase agreements with distribution companies in 2011 for the 4,000MW project, it could not proceed further as the land allocated at Nakkapally was not found feasible for project construction. Terming NTPC's decision to revive the 4,000MW project a win-win for both AP government and NTPC, PriceWaterhouseCooper's energy, utilities and mining leader Kameswara Rao said, "It benefits the state because there is going to be considerable industrial development along the coastal area which will demand more energy requirement. It also helps NTPC because it had signed up a number of PPAs through the regulated route before the sunset clause (of competitive bidding) came in and it now has the opportunity to implement all of them."

Confirming the renewed interest to take the project forward, an NTPC spokesperson told ET, "We have already posted a senior official in the rank of general manager to supervise the project's progress and seek AP government's support for relocating the project from Nakkapally to Pudimadaka."

" The same NTPC official said the corporation is considering dropping the idea of using imported coal and instead pursue linkages from the coal assets allocated to Andhra Pradesh in neighbouring states.

Source-On Request